The regulation in one paragraph
From 1 January 2025, every ship ≥ 5,000 GT calling at an EU/EEA port must report the well-to-wake (WtW) GHG intensity of the energy it consumed across its EU-scope voyages and at EU berths. A target limit - 89.34 gCO₂e/MJ in 2025 - applies; beating it produces a surplus, missing it produces a deficit. The intensity cap tightens every five years, reaching 80 % below the 2020 baseline by 2050.
The penalty
The deficit is measured in MJ of energy over the limit, then converted into VLSFO-equivalent tonnes (dividing by the VLSFO LCV of 41 MJ/kg = 41,000 MJ/t). Each such tonne costs EUR 2,400:
Penalty_EUR = max(0, (GHG_attained − GHG_target)) × Energy_MJ / (41,000) × 2,400
A 200 kt/year operator using only VLSFO (GHG intensity 91.7 gCO₂e/MJ vs 89.34 limit in 2025):
Excess intensity = 2.36 gCO₂e/MJ
Energy used = 200,000 t × 41,000 MJ/t = 8.2 × 10^9 MJ
Excess emissions = 19,350 t CO₂e
VLSFO-equiv = 19,350 / (89.34 × 41 / 1000) ≈ 5,282 t
Penalty = ~EUR 12.7 million
Paid annually to the DG MOVE-administered fund, ring-fenced for maritime decarbonisation projects.
Pooling
Ships owned, time-chartered or bareboat-chartered by the same compliance entity can pool their FuelEU balances. A surplus on the LNG-fuelled ship offsets a deficit on the VLSFO ship. Requires:
- A single designated pool manager.
- Written agreement between all participating companies.
- Pool registered with the administering authority before 30 April of the verification year.
Pooling is the pragmatic route for mixed-fleet operators. One methanol retrofit can carry a pool of 5–10 conventional ships for a few years. Some operators are now offering “FuelEU-as-a-service” pools to third parties: a ship with surplus accepts deficit-bearing ships for a fee, usually 60–80 % of what the penalty would have been.
Borrowing and banking
- Borrowing: you can borrow up to 2 % of the current year’s deficit from next year’s compliance - once. This is a one-time grace mechanism, not a rolling facility.
- Banking: surpluses roll forward indefinitely. Over-comply in 2025 and carry the balance into 2030 when the target tightens.
The RFNBO multiplier
Between 1 Jan 2025 and 31 Dec 2033, 1 MJ of RFNBO energy counts as 2 MJ for the purpose of the denominator. RFNBO = Renewable Fuel of Non-Biological Origin, defined in RED II as:
- e-fuels produced from additional renewable electricity
- Meeting specific GHG-lifecycle thresholds per RED II Article 25
- Certified under a recognised voluntary scheme (ISCC-EU, RSB-EU RED, 2BSvs…)
Practical examples: e-methanol from electrolytic H₂ + captured CO₂, e-ammonia from green H₂, e-LNG.
Why it’s so valuable
Consider a ship that replaces 1 % of its energy with RFNBO:
No multiplier: new_intensity = 0.99 × 91.7 + 0.01 × 0 = 90.78 gCO₂e/MJ
With multiplier: effective WtW = 0.98 × 91.7 + 0.02 × 0 = 89.87 gCO₂e/MJ
The multiplier roughly doubles the FuelEU headline benefit for the same physical fuel quantity. Since the same fuel also reduces Cf for EU ETS, the combined per-tonne value of RFNBO is often 3–4× the commodity premium over fossil MGO.
Fine print
- Only applies to actual RFNBO energy - bio-methanol, HVO, used-cooking-oil FAME don’t qualify (they’re bio-fuels, which also get favourable treatment but WITHOUT the ×2 multiplier).
- Ends on 31 December 2033 unless renewed.
- Subject to verified certificates of sustainability.
The OPS (onshore power supply) exemption
Ships at berth must either:
- Use shore power during stays of ≥ 2 hours (from 2030 for container and passenger ships at TEN-T core ports; 2035 fleet-wide), OR
- Use a zero-emission technology (battery, fuel-cell), OR
- Be on a limited list of exemptions (safety, force majeure).
Non-compliance at berth attracts a separate penalty under Article 20 of the regulation: EUR 1.5 per kWh of energy delivered by the auxiliary engines during the non-compliant stay. For a container ship at 3 MW × 24 h = 72 MWh, that’s EUR 108,000 per non-compliant port call.
Verification
Ships issue a FuelEU Document of Compliance (DoC) each year, based on verified data. Non-issue after two consecutive years of non-compliance triggers an expulsion order - the ship may be refused EU port entry until the DoC is re-issued. That’s a far bigger commercial threat than the monetary penalty.
Where it overlaps with other regimes
| Metric | FuelEU | EU ETS | CII |
|---|---|---|---|
| Basis | WtW energy intensity | TtW CO₂ per voyage | TtW CO₂ per capacity-mile |
| Scope | EU voyages + berth | EU voyages + berth | Global |
| RFNBO bonus | ×2 until 2033 | Cf = 0 | No (same Cf as fossil) |
| Penalty | €2,400 / t VLSFO-eq | €100 / missing EUA | Corrective plan, not monetary |
A zero-Cf RFNBO wins on FuelEU and ETS but has no direct CII benefit unless burning less fuel is the side-effect (it usually is, per MJ of RFNBO → higher hull-delivered energy).
How to price your exposure
Try our FuelEU GHG Intensity calculator to compute Attained vs Target intensity for a fuel mix. FuelEU Compliance Balance converts the deficit/surplus into VLSFO-equivalent tonnes. FuelEU Penalty applies the EUR 2,400 rate. FuelEU Pooling lets you model a multi-ship pool, and FuelEU RFNBO Multiplier isolates the x2 bonus effect for investment cases.