Greek shipping companies are bracing for a collective €175m penalty under the forthcoming FuelEU Maritime regulations, but the adoption of alternative fuels could significantly mitigate these costs and even generate compliance surpluses, according to maritime solutions and data firm OceanScore.
The FuelEU Maritime regulations, set to take effect next year, aim to reduce ships’ greenhouse gas (GHG) intensity. OceanScore’s analysis, based on the average GHG intensity of past voyages, reveals that over 370 Greek-registered companies will be affected, with the crude tanker, RoPax, bulker, and containership segments bearing the brunt of the penalties.
Tankers are expected to incur €55m (32%) of the potential penalties, while RoPax vessels follow closely with €44m (25%). The top three shipping companies could face a combined penalty of €25m, with the largest company potentially paying €11.75m, translating to an average per-vessel penalty of €309,200. In contrast, the average per-vessel penalty across all companies is estimated at €84,200.
Compliance Deficit and Investment Needs
The overall Greek fleet of 2100 vessels is projected to have a negative compliance balance, or deficit, of 71,666 tonnes of very low sulphur fuel oil equivalent (VLSFOe). This deficit arises from a fleet-wide average GHG intensity of 90.81g of CO2e per megajoule (MJ) of energy, compared to the initial FuelEU hurdle rate of 89.3g CO2e/MJ—a 2% reduction from the 2022 baseline of 91.16g CO2e/MJ.
Ralf Garrn, co-Managing Director of OceanScore, emphasises that this scenario is just a starting point. “Much will depend on how companies take advantage of biofuels, low-carbon technologies, and the FuelEU pooling mechanism to minimise their exposure,” he said.
Opportunities in Alternative Fuels
Garrn highlights the potential for Greek LNG shipping operators, who are well-positioned to capitalise on FuelEU due to a high compliance surplus. The use of LNG as fuel can cut emissions by around 25%, making pooling opportunities attractive. For instance, two of the country’s largest LNG operators have respective surpluses of 82.1 tonnes and 45.2 tonnes of VLSFOe.
Biofuels, though more expensive at around €1300 per tonne of VLSFOe, offer a viable short-term solution for reducing carbon footprints. Switching to biofuels could result in savings on the current FuelEU penalty of €2400 per tonne of VLSFOe and reduced costs under the EU
Cost Savings Potential
OceanScore estimates that Greek shipping currently requires nearly 8.23m EUAs to meet its EU ETS liabilities, equating to €543m based on the current carbon price of €66 per tonne of CO2.
For example, a containership replacing heavy fuel oil (HFO) with rapeseed-based biofuel costing €1200 per tonne could achieve a total net saving of €1.3m versus the cost of paying FuelEU penalties. This would result in a beneficial financial impact of €241 per tonne in FuelEU penalty savings and €55 per tonne in EU ETS savings.
Moreover, this switch could generate a compliance surplus of 973 tonnes of VLSFOe by reducing GHG intensity to 82.44g CO2e/MJ. This surplus could be pooled externally to earn €2.3m in revenue or used to offset 43,000 tonnes of under-compliance within the internal fleet.
