FuelEU
DNV updates Emissions Connect to help mitigate FuelEU Maritime challenges and risks
New update include users being able to gain an overview of the GHG intensity of vessels in a fleet, the cumulative compliance balance and penalty cost per vessel, where applicable.
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1 month agoon
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AdminClassification society DNV on Thursday (5 September) has unveiled an upgrade to its emissions data verification and data management platform, Emissions Connect, which will enable the maritime sector to handle the commercial challenges and risks that come with the implementation of FuelEU Maritime.
The update comes at a crucial time as the industry is grappling with the requirements that take effect from 1 January 2025.
Emissions Connect was first launched in 2023 to support the industry with the operational impact of multiple regulatory requirements and decarbonization trajectories. Specifically it helps the industry manage and control Carbon Intensity Indicator (CII) performance, manage the commercial obligations arising from the European Union’s (EU’s) Emissions Trading System (ETS) and now also the implicatons of FuelEU Maritime.
Pål Lande, Product Line Director, DNV Maritime, said: “The introduction of new regulation to drive decarbonization is creating a complex environment for organizations across the shipping sector. To assist companies in dealing with this change, we are pleased to be offering a solution that will help them manage the commercial impact of these new rules and collaborate across the supply chain. Accurate and verified data is crucial to instil trust and ensure effective collaboration within this complex environment.”
FuelEU Maritime sets limits on the greenhouse gas (GHG) intensity of fuels used by ships calling at EU ports and progressively reduces these levels towards 2050.
The regulation covers well-to-wake emissions from the entire fuel life cycle and requires ship managers to submit a monitoring plan, report emissions data annually and have their compliance balance verified. GHG intensity which is too high can lead to a negative balance, which, if not compensated in a pool with other ships, will trigger a penalty that the shipping company must pay to the national authorities.
To manage these challenges, the new update allows users to:
- Gain an overview of the GHG intensity of vessels in a fleet, the cumulative compliance balance and penalty cost per vessel, where applicable
- Evaluate different vessel pool set-ups by creating different fleets to explore the most suitable options for FuelEU Maritime management
- Track an individual ship’s performance by viewing basic vessel data, information on the GHG intensity of energy within the scope of FuelEU Maritime, and the compliance balance and corresponding penalty cost, if applicable
- Create verified emissions statements on voyage and custom period level
Built on the Veracity Data Workbench that supports customers with a strong emissions data management solution, Emissions Connect offers a high-quality emissions data baseline that is digitally verified.
High-quality emissions data provided by the shipowner is verified by DNV and shared with customers for self-service in settlement of transactions or other purposes such as reporting, exporting and secure sharing with partners and third parties, including banks and insurance companies adhering to the Poseidon Principles.
Note: Read more about Emissions connect here.
Photo credit: DNV
Published: 6 September, 2024
FuelEU
OceanScore calculates EUR 175 mil potential costs for Greek shipping with FuelEU Maritime
Greek shipping companies are set to face a total bill of over EUR 175 million in penalties incurred under FuelEU Maritime but can also capitalise on the use of alternative bunker fuels, says firm.
Published
1 month agoon
September 12, 2024By
AdminGreek shipping companies are set to face a total bill of over EUR 175 million in penalties incurred under FuelEU Maritime after it takes effect next year but can also capitalise on the use of alternative bunker fuels both to curb their financial exposure and generate compliance surpluses, according to Hamburg-based technology platform OceanScore on Tuesday (10 September).
The maritime solutions and data firm has calculated the prospective FuelEU exposure for over 370 Greek-registered companies based on the average GHG intensity of their past voyages.
Based on these calculations, OceanScore has determined the crude tanker, RoPax, bulker and containership segments would be hardest hit, with tankers accounting for EUR 55 million (32%) and RoPax EUR 44m (25%) of potential penalties.
It has determined the top three shipping companies would be looking at a combined penalty of EUR 25m, with the largest company facing the highest overall penalty of EUR 11.75 million and an average per-vessel penalty of EUR 309,200, versus an average per-vessel penalty across all companies of EUR 84,200. The second and third largest players would each have total penalties of around EUR 6.5m.
Investments needed to offset compliance deficit
The overall Greek fleet of 2100 vessels would be left with a negative compliance balance, or deficit, of 71,666 tonnes of VLSFOe, according to OceanScore.
This is derived from a Greek fleet-wide average GHG intensity of 90.81g of CO2e per megajoule (MJ) of energy versus the initial FuelEU hurdle rate of 89.3g CO2e/MJ - a 2% reduction on the 2022 baseline of 91.16g CO2e/MJ that is the initial target from 2025-30 under the regulation.
However, OceanScore’s co-Managing Director Ralf Garrn, said: “This should only be considered the starting point for Greek shipping and not the final scenario as much will depend on how companies take advantage of biofuels, low-carbon technologies and the FuelEU pooling mechanism to minimise their exposure.
“Vessels with a very high penalty structure will also gain the greatest beneficial effects from fuel switching with biofuels to reduce their penalties and can even convert these into opportunities by creating compliance surpluses that can generate revenue through pooling.”
LNG well-positioned to benefit
He highlighted Greek LNG shipping operators as being especially well-positioned to capitalise on FuelEU due to a high compliance surplus that makes pooling opportunities attractive, given the use of LNG as fuel can cut emissions by around 25%. For example, two of the country’s largest LNG operators have respective surpluses of 82.1 tonnes and 45.2 tonnes of VLSFOe.
Garrn said the use of widely compatible biofuels probably represents the easiest option for most shipping companies to cut their carbon footprint in the short term. However, these are more expensive - at around EUR 1300 per tonne of VLSFOe - than fossil fuels, while they also have a lower calorific value so a higher volume is required.
He explained that switching to biofuels to curb CO2 emissions would result both in savings on the current FuelEU penalty of EUR 2400 per tonne of VLSFOe as well as reduced costs under the EU Emissions Trading System (EU ETS) due to the need to buy fewer EU Allowances (EUAs), or carbon credits.
OceanScore has calculated that Greek shipping presently has a requirement to purchase nearly 8.23m EUAs to meet its EU ETS liabilities, which would equate to EUR 543 million based on the current carbon price of EUR 66 per tonne of CO2.
High potential for cost savings
The company cites the example of a containership that could achieve a total net saving of EUR 1.3m versus the cost of paying FuelEU penalties by replacing HFO with rapeseed-based biofuel costing EUR 1200 per tonne. It estimates this would give a beneficial financial impact of EUR 241 per tonne in FuelEU penalty savings and EUR 55 per tonne in EU ETS savings.
Furthermore, this could generate a compliance surplus of 973 tonnes of VLSFOe by reducing GHG intensity to 82.44g CO2e/MJ, which could be pooled externally to earn EUR 2.3 million in revenue or used to offset 43,000 tonnes of under-compliance in the internal fleet.
OceanScore has now launched its FuelEU Planner - the first in a suite of solutions set to be rolled out over the next year - that enables shipping companies to simulate different operational and investment scenarios to assess their commercial impact in relation to FuelEU compliance.
“This tool is designed to facilitate optimal decision-making by providing visibility on potential cost-saving opportunities as an alternative to simply paying penalties as we help the industry navigate the significant complexity of this regulation,” Garrn concluded.
Photo credit: OceanScore
Published: 12 September, 2024
FuelEU
EmissionLink highlights smaller ship operators struggle with FuelEU compliance
Industry leaders are rapidly positioning themselves to thrive under the new rules, while smaller companies risk falling behind, facing steep penalties and potential loss of market share, says firm.
Published
1 month agoon
September 2, 2024By
AdminEmissionLink, a member of Columbia Group, on Friday (30 August) said industry leaders are rapidly positioning themselves to thrive under the upcoming FuelEU Maritime Regulation, while smaller companies risk falling behind, facing steep penalties and potential loss of market share.
This warning comes ahead of the 31 August deadline for shipping companies to prepare and submit their FuelEU Maritime Monitoring Plans.
EmissionLink said there are concerns that while industry leaders are investing in low-carbon technologies, optimising their operations, and ensuring compliance strategies are in place, some companies, particularly smaller operators, are clinging to outdated practices and also face limited resources, lacking the expertise and financial capability to understand the compliance and submit their plans.
“A significant number of shipowners and operators have yet to submit their FuelEU Monitoring Plans, citing complexity of the compliance and the lack of clear guidance and inconsistent support from regulators about the correct steps to take,” warned Philippos Ioulianou, Columbia Group Director of Energy and Renewables.
“Although there is some leeway to do this by the start of next year, we expect there to be a huge rush later in the year, so the earlier companies get their plans submitted and verified, the better.”
Columbia Group is an active member of ship management trade association InterManager, and, on behalf of its members, InterManager has taken part in extensive discussion with the EU in relation to FuelEU and EU-ETS.
InterManager members have stressed to the EU the need for it to employ a ‘polluter pays’ approach to environmental legislation. The association points out that, in effect, ship managers are the facility managers and not the factory owners.
Ship managers are not responsible for decisions in relation to the origin of the fuel, its supply, or procurement decisions, or the technical specification of the ships they manage, Columbia says.
However, they are responsible for checking that the fuel delivered to the vessels conforms to the specifications ordered by owners or charterers and are also responsible for ensuring the fuel is handled properly onboard the vessel and, where different qualities are on the vessel, for ensuring the right fuel is burned at the right times. This is in line with the obligations placed on ship managers under the ISM Code.
Ship managers are therefore also concerned that the proposed FuelEU legislation makes them the responsible party and have warned that, as the ruleset currently stands, there is a high risk of litigation once the scheme is implemented.
To help ship owners and operators navigate the challenges posed by the new FuelEU Maritime Regulation, EmissionLink was launched by Columbia Group as a one-stop shop platform using AI to streamline processes and ensure compliance with the evolving regulatory landscape including FuelEU requirements and the EU Emissions Trading Scheme (ETS).
The platform offers transparency in managing the fuel life cycle and helps companies collect, clean, analyse, and forecast emissions data so clients can create long-term green strategies and reduce their emissions.
The FuelEU Maritime Regulation, a key component of the EU's "Fit for 55" package, is set to reshape the shipping industry by enforcing strict greenhouse gas (GHG) intensity reductions. Starting in January 2025, all ships of 5,000 gross tonnage (GT) and above will be required to significantly lower their GHG emissions, with incremental targets leading to an 80% reduction by 2050.
The regulation requires companies to submit detailed Monitoring Plans that outline how they will measure and report their GHG intensity. This includes tracking 100% of energy used on voyages between EU ports and 50% on voyages between EU and non-EU ports. Failure to comply by the deadline could result in severe financial penalties and operational setbacks, putting lagging companies at a significant disadvantage.
“The FuelEU Maritime Regulation creates new challenges that require foresight and agility and shipowners must be ready to steer through the challenges ahead,” said Mr Ioulianou. “Non-compliance isn’t just a financial risk—it’s a strategic risk. As the industry moves toward greener practices, those who lag behind will find it harder to compete, not just in terms of meeting regulations, but in maintaining market share.”
Photo credit: william william on Unsplash
Published: 2 September, 2024
FuelEU
Updated ClassNK FAQs on FuelEU Maritime include bio bunker fuel
ClassNK goes into detail on preparation of FuelEU Monitoring Plan and benefits from the use of biofuels on international voyages between an EU port and a non-EU port.
Published
2 months agoon
August 29, 2024By
AdminClassification society ClassNK on Wednesday (28 August) said it has released its third edition of FAQs on the FuelEU Maritime.
FuelEU Maritime, an EU regulation aimed at promoting the decarbonisation of fuels used on board ships, has entered into force and will apply to all ships above 5,000 gross tonnage calling at EU ports from January 1, 2025.
In this edition, ClassNK highlighted preparation of the FuelEU Monitoring Plan and the benefits from the use of biofuels on international voyages between an EU port and a non-EU port.
ClassNK also answered on how to calculate greenhouse gas (GHG) intensity when biofuels are used.
Note: The third edition of FAQs on the FuelEU Maritime is available here.
Photo credit: ClassNK
Published: 29 August, 2024
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