FuelEU provides flexibility mechanisms, supports existing fleets in finding suitable compliance strategies, rewards first-movers for early investment in low—or zero-emission fuels or technologies, and helps shipowners minimise their financial exposure to FuelEU. 

Companies will be allowed the flexibility to roll over surplus compliance from one year to another or to borrow an advanced compliance surplus from the following year. This will assist the shipowner or ship operator with FuelEU compliance, particularly when elements, such as fuel availability or quality, are not within their control in a particular year.

Companies will also be allowed the flexibility to pool the compliance balance of ships that are overcompliant in any one year with those ships that are undercompliant. Pooling can be applied within or between fleets, provided the overall pool compliance is positive. The aim is to avoid technology lock-in and continue supporting the deployment of the most performant solutions, rewarding over-compliance and providing incentives for investment in more advanced technologies.

Banking

Those companies with a compliance surplus may choose to bank this surplus to the following reporting period in the FuelEU database, following approval by its verifier. This can only be done prior to the issue of the FuelEU Document of Compliance (DoC). Once the DoC is issued, all calculations and allocations of compliance balances for that reporting year are concluded. Borrowing may be applied to a ship’s greenhouse gas (GHG) Intensity requirements and the Renewable Fuel of Non-Biological Origin (RFNBO) sub-target if/when applicable.

Borrowing

For those companies with a compliance deficit, the company may borrow an advance compliance surplus of the corresponding amount from the following reporting period. However, this advanced compliance surplus must be paid back in the subsequent reporting period. This payback is calculated by multiplying the borrowed amount by 1.1 and then subtracting this from the starting point of the following year’s compliance balance. i.e. in the following reporting period, the GHG intensity limit for the year will be lowered.

The advance compliance surplus may not be borrowed:  

a) for an amount exceeding by more than 2 %, the limit set out in Article 4(2), multiplied by the energy consumption of the ship calculated in accordance with Annex I; 

b) for two consecutive reporting periods.  

Any advanced compliance surplus to be borrowed must be recorded in the FuelEU database by 30 April of the verification period. Ships participating in a pool may not also borrow an advanced compliance surplus.

If a ship which borrowed an advance compliance surplus in the previous reporting period, does not make a port call to the EU in the following reporting period, the borrowed amount will have to be paid back at 1.1 times the rate borrowed.

Pooling

Where a shipowner/operator has an over-compliant ship in any year, they may pool this surplus to assist an under-compliant ship to become (more) compliant, thereby minimising financial exposures. Pooling may be within or by contractual agreement between fleets. For a pool to be valid:

  • The total pooled compliance must be positive.
  • Ships in the pool starting with a compliance deficit must not have a greater deficit as a result of pooling.
  • Ships in the pool starting with a compliance surplus must not end with a compliance deficit.

A ship’s compliance balance may not be included in more than one pool in the same reporting period. If, after pooling, the ship still has a compliance surplus, the remaining surplus may be banked for use in the subsequent year.

Once a decision to pool has been made, the company must register the intention to pool in the FuelEU database, including the ship’s:    

  • compliance balance in a pool, 
  • the allocation of the total pool compliance balance to each individual ship, and 
  • the choice of the verifier selected for verifying that allocation.

Where the ships participating in the pool are controlled by two or more companies, the pool details registered in the FuelEU database must be validated by all the companies concerned in the pool. By 30 April of the verification period, the selected pool verifier must record in the FuelEU database the definitive composition of the pool and allocation of the total pool compliance balance to each ship.