Introduction

What is FuelEU Maritime?

FuelEU Maritime is an EU emissions-related regulation that will go into effect in 2025. The regulation is a technical calculation driven by the greenhouse gas (GHG) intensity of fuel consumed. This calculation generates a FuelEU Compliance Balance that can result in a penalty.

The commercial impacts (penalties) will increase exponentially on general fuel types such as HFO (estimated penalty ~$70/MT), MGO (estimated penalty ~$40/MT), and LSF (estimated penalty ~$50/MT), as the regulation moves to its different stages.

To support elements of this regulation, IMOS now includes a comprehensive FuelEU Calculation in the Voyage Estimator to help drive commercial decisions. 

The FuelEU Calculator

The FuelEU Calculator is available in the Carbon Calculator on the Estimate level to aid in commercial decision-making regarding the impact of FuelEU. The FuelEU calculation breaks down Consumption, Energy, GHG Intensities, and Compliance Balance by voyage leg, and displays voyage total Energy, Compliance Balance, and Penalty amounts.

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Example estimate worksheet

Getting Started

Step 1 – Inputting Fuel/Lube Types

To start, you’ll need to input your fuel/lube types. In the Data Center, navigate to Fuel/Lube Types (under the Vessels category).

Step 2 – Capturing the Emissions Factors

The Fuel/Lube Table under the Data Center has additional fields to capture the necessary FuelEU Factors per fuel type. Below are the default values defined by the EU in the published REGULATION (EU) 2023/1805 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL and Veson Nautical’s interpretation of the equation to calculate the WtT CO2eq and TtW CO2eq.

These values can be entered by navigating to Data Center → Fuel/Lube Type

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Optional Step – Capturing Cslip for LNG

The LNG Cslip Factor depends on the LNG Engine as defined in the table below. To capture the Cslip for LNG, the Engine Type can be configured on a vessel.

Step 4 – Configuring the Engine Type on a Vessel

Navigate to Data Center → Vessel → Details Tab. Under the Details tab, there will be a field called Engine Make/Type, which allows for the types defined by the EU to be selected on the engine. Each engine type references the default Cslip value and is included in the FuelEU Calculation.

Using the FuelEU Calculator

Accessing the FuelEU Calculator from the Carbon Calculator

To access the FuelEU Calculator, start by navigating to Estimates in the Chartering Module. Select an estimate, then from the Estimate worksheet, select Menu (…) → Analysis → Carbon Calculator.

Customizing the Calculator

Overriding the total penalty values

To override the penalty values either in EUR or your base currency (shown as USD here), you can input a new Agreed Penalty amount. If you update the Agreed Penalty (EUR) or Agreed Penalty in your base currency, the other field will auto-populate.

If you want to, you can override both fields and input a new amount for each.

Overriding the exchange rate between EUR and the voyage's base currency

If you want to override the exchange rate (e.g., you want to use yesterday’s exchange rate for your calculation), you can change it using the the Exchange Rate (EUR to [your base currency]) field.

If you change the exchange rate, Agreed Penalty calculation for your base currency will be automatically updated.

Using the Compliance Breakeven Calculation

When a voyage incurs a FuelEU penalty, it is due to a negative compliance balance.

By burning compliant fuels and/or pooling with vessels burning compliant fuels, you can reach compliance and avoid paying a FuelEU penalty. With the current price of biofuel (a compliant fuel under FuelEU), reaching compliance can be significantly less costly than the FuelEU penalty. This alternative method has surfaced as a possible way to drive costs based on the cost of compliance, not the actual cost of the FuelEU penalty.

The breakeven calculation replaces the amount of the worst non-compliant fuel (when the regulation % is the same) consumed on a voyage with the replacement fuel selected to the amount where the compliance balance is negated.

For this estimate, the system is replacing the worst non-compliant fossil fuel (HFO) with a compliant replacement fuel (B30) that has been selected as the replacement fuel. The breakeven calculation replaces the amount of energy of the non-compliant fuel with compliant fuel to an estimated zero (breakeven) compliance balance. This provides the amount of fuel that needs to be replaced the amount of replacement fuel, and drives the FuelEU Agreed Cost as -

(Replacement Fuel (MT) x Replacement Fuel Price) - (Replaced Fuel (MT) x Replaced Fuel Price)

Or, in this example,

(Cost of B30) - (Cost of HFO) = FuelEU Agreed Cost

Setting up the replacement fuel

The replacement Fuel pulls from the fuels configured in the Fuel Grades Table.

In this example, we have configured a B30 & B24 as fuel grades.

Using the calculator

On the Carbon Calculator → FuelEU Tab

1. Select Estimated Breakeven in the Override Calc dropdown

2. Choose the fuel to be used as the Replacement Fuel from the dropdown
   
   

3. Check the Use Estimated Breakeven checkbox to drive the agreed cost based on the estimated cost of compliance.

Reporting on Aggregate Values

The FuelEU Calculator also captures the following aggregate values:

• Total Energy

• Compliance Balance (MT)

• Penalty (EUR)

You can report on these aggregate values by navigating to Analytics → Report List → [your report name]. If the FuelEU Agreed Penalty fields were used to override the FuelEU Penalty amount in the FuelEU tab of the Carbon Calculator, this will be shown in the report.

Read more on how to create, edit, and run a report.

How Does the FuelEU Calculator Work?

Unlike EU ETS, which only considers emissions from Tank to Wake, FuelEU Maritime looks at the entire lifecycle of the fuel. This is known as Well-to-Wake (WtW), which includes the Well-to-Tank (WtT) phase (this covers the generated emissions from the extraction, cultivation, production, and transportation of the fuel), and the Tank-to-Wake (TtW) phase (this covers the emissions generated during the combustion of the fuel).

How does FuelEU calculate the penalty?

Using the Greenhouse Gas (GHG) Intensity Limit for the year and by calculating the GHG Intensity and Energy Used on Board during the voyage, the FuelEU Calculator determines the penalty using the equation below.

If a ship exceeds the FuelEU yearly intensity limits, there will be a penalty.

Formulas used

• GHG Intensity Limit of the year = 89.3368 (2025-2030)

• GHG Intensity of the Ship (WtW GHG Intensity) = WtT GHG Intensity + TtW GHG Intensity

  • WtT GHG Intensity = ( MT x 1,000,000 x 'WtT CO2e' x LCV ) / MJ

  • TtW GHG Intensity = ( MT x 1,000,000 x 'TtW CO2e' ) / MJ

• Total Energy (MJ) = MT x 1,000,000 x LCV

• Penalty per energy used (EUR/MJ) = 0.058

Compliance Balance and Penalty

The goal of the calculation is to drive two metrics: Compliance Balance and Penalty.

The Compliance Balance is the amount of equivalent carbon in grams (g/CO2eq). The FuelEu Calculator displays this in MT (x 1,000,000) as the unit is more intuitive.

• Compliance Balance (MT) = (GHG Intensity Limit - GHG Intensity) x Total Energy / 1,000,000

The FuelEU Penalty is the cost associated with the compliance (Compliance Balance x Energy Penalty = $)

• Negative Compliance: FuelEU Penalty. The fuel consumed during the voyage was over the compliance limit.

• Positive Compliance: No FuelEU Penalty. The fuel consumed during the voyage was compliant and created a compliance surplus.

FAQs

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