Concerns Raised As New Regulations Leave DoC Holders With Fuel Liabilities Risk

OceanScore, the maritime emissions consultancy, has raised concerns over the FuelEU Maritime regulation, due for implementation in 2025, suggesting it presents an accountability dilemma. 

FuelEU Maritime (Regulation (EU) 2023/1805) is a regulation implemented by the European Union (EU) to reduce greenhouse gas (GHG) emissions from the shipping sector and is part of the EU's broader efforts to achieve climate neutrality by 2050.

It states that the Document of Compliance (DoC) holder will be held accountable for fuel selection, putting them at risk of penalties, which is in contradiction to the ‘polluter pays’ principle.

The intention of FuelEU is to encourage and promote an uptake of zero and low-carbon fuels, and the adoption of sustainable technologies such as wind power to improve fuel efficiency. The regulation also promotes the use of onshore power supply (OPS) in ports to further reduce emissions.

It aims to achieve this by mandating reductions in the GHG intensity of energy used by ships above 5000 GT, with penalties for those who are non-compliant.

Responsibility for FuelEU compliance remains on the DoC holder who has operational responsibility for the ship, and is responsible for the reporting of emissions and other voyage data under the EU’s MRV regime.

Co-Managing Director of OceanScore, Albrecht Grell highlights the significant cost exposure of this decision, stating:

“... this poses the risk of significant cost exposure for the DoC holder in the event of heavy penalties due to non-compliance with carbon intensity targets, which would far exceed the financial capacity of most ship management companies. They are in no position to carry the related burdens – neither financially nor contractually”.

Grell says that the clock is ticking as the DoC holder can be struck with heavy penalties for each vessel with a compliance deficit under their remit from as early as June 2026.

“The DoC holder does not though have any influence or control over the type of bunkers used on a vessel or investments made and therefore, based on the EU’s overarching ‘polluter pays’ principle, should not be held accountable for the financial impact of those decisions”. Grell added.

In order to ensure accountability, OceanScore recommends that responsible reporting and verification procedures are put in place for every vessel affected by FuelEU. Additionally, contractual arrangements should be implemented to ensure cost accountability and assign surplus benefits to the responsible parties, be it the charterer or registered owner.

An additional FuelEU requirement for zero-emission at berth is set to become compulsory from 2030, so investment assessments should also be prepared to mitigate potential penalties and gain a competitive advantage, such as with wind-assisted propulsion.

“However, the immediate priorities for shipping companies are to familiarise themselves with the complexities of the new regulation and understand how it might impact their operations and costs. This can be done by simulating decisions in areas such as investments, vessel deployments and alternative fuel usage to decide on the optimal way forward”.

Grell continues by saying he believes it is necessary to set up a management solution to track compliance balance. Smart simulations can also be conducted to ensure there is full transparency around these processes by the time FuelEU is implemented on 1st January 2025.

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