SMALLER international shipping companies risk facing steep penalties and potential market share losses as some have been observed clinging to outdated practices in the face of FuelEU compliance.
Emission Link, an emission scheme management service under the Columbia Group, warned that as the January 2025 implementation of the FuelEU Maritime Regulation approaches, industry leaders are rapidly positioning themselves to thrive under the new rules while smaller companies risk falling behind.
FuelEU Maritime Regulation requires ship owners, managers or charterers to accelerate the uptake of renewable and low-carbon fuels in maritime transport and cement the use of onshore power during port stays of more than two hours.
Philippos Ioulianou, Columbia Group director for energy and renewables. CONTRIBUTED PHOTO
Emission Link’s warning comes ahead of the August 31 deadline for shipping companies to prepare and submit their FuelEU Maritime Monitoring Plans.
The group reported that there were concerns that while industry leaders were investing in low-carbon technologies, optimizing their operations and ensuring compliance strategies were in place, some companies, particularly smaller operators, were clinging to outdated practices and also facing limited resources, lacking the expertise and financial capability to understand the compliance and submit their plans.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 the complexity of compliance and the lack of clear guidance and inconsistent support from regulators regarding the correct steps to take,” warned Philippos Ioulianou, Columbia Group director for energy and renewables.
“Although there is some leeway to do this by the start of next year, we expect therein to be a huge rush later in the year, so the earlier companies get their plans submitted and verified, the better,” Ioulianou added.
Columbia Group is an active member of the ship management trade association (InterManager), and, on behalf of its members, InterManager has taken part in extensive discussions 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.
Columbia said that ship managers were not responsible for the origin of the fuel, its supply, procurement decisions, or the technical specifications of the ships they manage.
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 aligns 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. It helps companies collect, clean, analyze and forecast emissions data so clients can create long-term green strategies and reduce their emissions.
FuelEU Maritime Regulation
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 percent reduction by 2050.
The regulation also requires companies to submit detailed Monitoring Plans that outline how they will measure and report their GHG intensity. This includes tracking 100 percent of energy used on voyages between EU ports and 50 percent 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 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,” he added.
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