FuelEU Maritime: Early Lessons From the First Year of Compliance

Marine Insurance P&I Club News — 08/08/2026

FuelEU Maritime, a regulation under the EU's "Fit for 55" climate package, applies to ships above 5,000 gross tonnage calling at EU ports regardless of flag. It sets progressively tightening greenhouse gas (GHG) intensity limits on the energy used onboard — starting with a 2% reduction in 2025 and ramping toward an 80% cut by 2050. The first compliance data is now available following the initial year of reporting against these targets for shipping companies operating in EU trade. To examine what these early results reveal, insights were drawn from Joe Bettles, Climate Policy Manager and author of the Countdown newsletter at the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (the Center). The Center recently published its analysis of the first reporting year in the article "What did we learn from the first year of FuelEU?"

FuelEU Maritime operates alongside the EU Emissions Trading System (ETS), which was extended to cover shipping emissions from 2024. While the ETS prices carbon through allowance trading, FuelEU targets the carbon intensity of the energy used, giving shipowners flexibility in how they meet reduction obligations.

Under the regulation, shipowners have several compliance options:

• Pooling mechanism: Vessels with a compliance surplus can trade it with other vessels.
• Borrowing mechanism: Companies may defer a compliance deficit to the following year, subject to a 10% surcharge.
• Low-GHG intensity fuels: Vessels meet the target directly by using fuels with reduced greenhouse gas intensity.
• Penalty payment: Shipowners can opt to pay the FuelEU penalty.

Pooling Becomes the Preferred Option

The first year of reporting shows that pooling quickly became the dominant strategy. According to European Commission data, 92% of vessels used the pooling mechanism, while only 2% relied on borrowing. The remaining vessels either paid the penalty or achieved compliance through LNG or other low-GHG energy sources.

Commenting on the findings, Joe Bettles stated: "Our insights from the first year of reporting indicate that shipping companies were able to comply with the targets, with most using the pooling mechanism. This shows that FuelEU is working as intended. As we approach the IMO's upcoming discussion on the Net-Zero Framework (NZF), FuelEU demonstrates that it is possible for the global fleet to comply with a GHG intensity regulation using existing fuels and providing incentives for the uptake of cleaner energy sources."

The IMO is developing its own Net-Zero Framework, with member states having agreed in principle on a goal to reach net-zero GHG emissions from international shipping by or around 2050. The FuelEU experience may inform how a global market-based mechanism or fuel standard could function.

A Developing Market for Compliance Surplus

The Center's analysis also reviews the various pooling platforms available to shipping companies working to meet their regulatory obligations. The price of compliance surplus averaged approximately EUR 208/tCO₂eq and remained relatively stable, suggesting that the market matured quickly, with buyers generally able to find sellers.

On the pooling market's development, Joe Bettles noted: "The prices for trading compliance surpluses remained well below the EUR 640/tCO₂eq penalty for VLSFO, making the pooling mechanism significantly more attractive than paying the penalty."

Fuel Choices Remain Central to Compliance

Fuel selection plays a critical role in compliance outcomes. Looking at fuels supplied to the FuelEU market, the Center estimates that 3.22 million tCO₂eq of reductions — relative to an all-VLSFO fleet — will be required to meet the 2% reduction target between 2025 and 2029.

Based on analysis of previous years' fuel consumption, the Center indicates that LNG may have contributed approximately one-third of the required reduction. Biofuel blends account for the remainder, with biodiesel and bio-LNG dominating the low-GHG fuel mix.

Joe Bettles highlighted how the pooling mechanism can amplify the impact of lower-GHG fuels across the broader fleet: "Although LNG is not a drop-in replacement for VLSFO, the pooling mechanism under FuelEU allows an LNG-fuelled vessel to share its over-compliance with other vessels that cannot physically use LNG. Depending on the engine type in the ship, LNG can remain compliant with the 14.5% reduction target through 2039 and can further extend its compliance through banked surplus or by using liquified biomethane."

As the GHG intensity limit tightens in subsequent years, the fuels and strategies sufficient for early compliance may need to shift. The reduction target rises to 6% in 2030, then steps up further through the 2030s, which could increase the demand for lower-carbon alternatives.

Three Early Lessons From FuelEU Maritime

Drawing on the first year of reporting, Joe Bettles and the Center identified three lessons that may also prove relevant for the IMO going forward.

1. A fuel standard for shipping can work. FuelEU's first year has created incentives for the use of alternative fuels and established a market for those who prefer to pay for emissions compliance.

2. Regulations should support a broader energy mix. Lower-maturity alternatives — including wind-assisted propulsion, e-fuels, and onshore power — still represented a limited share of the compliance landscape.

3. Policy stability and clear reduction pathways matter. Predictable reduction trajectories can reduce uncertainty for shipping companies and strengthen the business case for investing in cleaner alternatives.

Supporting Knowledge Sharing Across the Maritime Value Chain

Skuld serves as a Mission Ambassador to the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, supporting the Center's role as a platform for collaboration, knowledge sharing, and practical insight across the maritime value chain.

"The Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping is a highly valuable forum for us at Skuld. It provides access to a broad network of industry stakeholders and helps us stay close to the challenges shipowners face in meeting regulatory requirements and reducing emissions. Just as importantly, it serves as a platform for dialogue and knowledge sharing across the maritime value chain" — Matias Bøe Olsen, Decarbonisation and Transition Risk Lead, Skuld.

Source: Skuld