31 January 2024 (Lloyd's List) - VESSELS fuelled by renewable hydrogen derived e-methanol can save a fleet of 10 ships up to $55m per year in FuelEU Maritime penalties if they form a pool in 2030s, according to a new report by the class society Lloyd's Register.
Vessels emitting around 10,000 tonnes of CO2 on voyages that include EU ports will pay penalties of around $217,000 each year from 2025 to 2030 if they fail to reduce GHG intensity of onboard energy by 2% compared with a 2020 baseline, or form a pool with an overachieving vessel under FuelEU rules, LR said in its report.
Non-compliance penalties rise to $411,000 in 2030-2035 and up to $770,000 in 2035-2040, according to assumptions based on a vessel emitting around 10,000 tonnes of CO2.
FuelEU rules mandate that shipping reduces greenhouse gas intensity for energy used on board a ship by 2% from 2025, 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045 and 80% from 2050. The reduction targets are all set against 2020 levels of 91.16 grams of CO2 equivalent per megajoule.
FuelEU rules require shipping companies to submit a monitoring plan by the end of August 2024 to verifiers for assessment for each of their ships, communicating their chosen method to monitor and report the amount, type and emission factor of energy used on board, LR said.
Most of the class societies, including LR, are among the accredited verifiers for both EU ETS and FuelEU.
Energy saving methods including wind-assisted propulsion are among other methods to comply with FuelEU, according to LR's report.
Vessels that use wind-assisted propulsion gain a double advantage under EU ETS, LR said, adding that lower fuel consumption cuts the ETS tax that a vessel will pay.
"A further reward is supplied by FuelEU Maritime, which offers up to a 5% reduction on the GHG intensity calculation of energy used on board for those vessels where wind assisted propulsion accounts for 15% or more of the energy used for propulsion.
"A reward factor is available for vessels with a minimum of 5% of propulsion energy from wind, offering a 1% discount on the GHG intensity calculation."
Routing is another method to reduce exposure to EU ETS, according to LR's report. A vessel sailing from Singapore to Antwerp via a Mediterranean EU port, such as Gioia Tauro, could stop instead at a non-EU transhipment hub such as Port Said East to reduce ETS tax, as it will pay for 50% of the voyage from Singapore to Port Said and 50% of the second leg between Port Said and Antwerp, according to a voyage example by LR that cites Gioia Tauro port operator Medcenter.
A vessel that sails between Singapore and Antwerp via Gioia Tauro will pay 50% of the first leg and 100% of the second leg, as Gioia Tauro is an EU port. The EU designated Port Said and Tangier as non-EU transhipment hubs to avoid carbon leakage, meaning port calls at these terminals do not count to determine the start or the end of a voyage covered by the EU ETS.
