SCOPE AND EXEMPTIONS There are exemptions until 2030, it must be stressed, for ferries to/from European small islands and for passenger ships that perform a public service.


Furthermore, only trips between or within EU ports are fully assessed for compliance. Voyages emissions to or from a port outside Europe will only be accounted for compliance to the tune of half the journey.


Trading mechanisms also allow owners to mitigate excess/lower emissions by buying/selling allowance from/to other ships. In addition, an owner can pool with other ships that are compliant or even borrow from the next year’s allowance (only once). The owner can even bank his ship’s compliant performance for future years, when his ship may not be able to run on a compliant fuel anymore.


Such mechanisms open up a number of commercial opportunities for owners of vessels able to run on the less carbon intensive fuels.


The most ambitious part of this new law, however, is in its holistic approach to emissions of the fuels.


Most regulations account for vessel emissions on a Tank-to-Wake (TtW) basis. That is to say the emissions resulting from fuel used onboard ship, including propulsion, energy generation, and auxiliary systems.


FEUM, meanwhile, looks at carbon intensity of the fuel on a Well-to-Wake (WtW) basis. This means the entire process of the fuel’s production, transportation, and use on the ship are assessed for GHG emissions.


140 130 120 110 100 90 80 70 60 50 40 HFO LFO


MDO LNG 1.7% Meth. Slip


LNG 3.1% Meth. Slip


Methanol (grey)


Ammonia (Grey)


B20 UCO


Graph B: Gradual compliance and different fuel GHG intensity compliance in gCO2 Source: Bureau Veritas


eq/MJ


A direct consequence of this shift is that some fuels that might have been perceived as viable green alternatives under a TtW basis are now becoming non-compliant. That is the case for methanol or Ammonia that are sourced in an unsustainable manner (Graph B).


140 130 120 110 100 90 80 70 60 50 40


2025 2030 2035 2040


Penalty Chart: Source: Bureau Veritas 31 | ADMISI - The Ghost In The Machine | Q1 Edition 2025


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