The implementation of FuelEU has emerged as a significant challenge for the maritime industry, prompting comments from experts like Roche, who admits it has consumed much of his time. He believes that compared to the relatively straightforward EU Emissions Trading System (ETS), FuelEU poses a far more complex compliance landscape. While the ETS framework was manageable thanks to various clauses, FuelEU raises concerns about potential future liabilities, with discussions about compliance burdens highlighting the division between fuel buyers and charterers. One of the core difficulties with FuelEU lies in its intricate compliance requirements.
Unlike the ETS, which operates on a simple “emit and surrender” model, FuelEU involves various strategies such as banking, borrowing, and pooling of emissions. Roche emphasized that responsibility for these strategies typically falls on whoever purchases the fuel—this could be either shipowners or time charterers. The effectiveness of pooling strategies also hinges on the availability of low greenhouse gas (GHG) fuels like biofuels, underscoring the need for a reliable supply. Moreover, the confusion surrounding verifiers and the lack of standardized pooling agreements has further complicated compliance efforts.
Shipowners are uncertain about the need for uniform verification across multiple arrangements, which has created additional hurdles. Laybourn from Ardmore Shipping corroborates these issues, sharing concerns regarding bureaucratic delays and the administrative burden that FuelEU compliance entails. He noted that despite challenges with the ETS, the actual trading strategy has been the easiest aspect to manage. Looking ahead, Laybourn foresees even greater complexities with FuelEU.
He highlighted that unlike the ETS, accountability for compliance cannot be delegated, placing full responsibility on the International Safety Management (ISM) company. The specifics of compliance will vary among companies, depending on trading patterns and fleet makeup. Key considerations include access to biofuels and other sustainable practices, with Laybourn acknowledging the uncertainties that still surround FuelEU just months into its implementation.