FuelEU Maritime's greenhouse gas intensity reduction requirement is scheduled to increase from 2% in 2025 to 6% from 2030.

The introduction of a proposed IMO carbon regime could result in a €136,000 ($152,200) carbon bill for a 76,000-dwt Panamax voyage from South America to Europe by 2030, equivalent to 16% of hire, according to an analysis by Argyris Zafeiropoulos of Resilience & Compliance Advisory

The model uses a Panamax

A transatlantic trip with delivery on the east coast of South America is modelled using a Panamax fixed at $35,000 per day.  It assumes a 66,000-tonne grain cargo travelling from Santos to Rotterdam at a speed of 12.5 knots, with fuel consumption of around 21 tonnes per day. This results in an estimated hire period of 26 days and fuel consumption of 400 tonnes.

 Existing European rules 

 Under existing European rules, the carbon bill would be around €66,000 ($73,900), comprising approximately €55,000 ($61,600) for EU Emissions Trading Scheme permits and a €11,000 ($12,300) FuelEU Maritime penalty. This equates to approximately €1.01 ($1.13) per tonne of cargo, €2,600 ($2,910) per day, or 8% of the hire cost. 

 The proposed IMO Net-Zero Framework

Under the proposed IMO Net-Zero Framework, the model is expected to incur approximately €29,000 ($32,500) in IMO-related expenditure by 2028. This would increase the total cost of a voyage to Rotterdam to around €96,000 ($107,400), equating to €1.45 ($1.62) per tonne and around 12% of the total cost of the voyage.  This figure could increase to €136,000 ($152,200) by 2030, equating to €2.06 ($2.31) per tonne, or 16% of the hire cost. FuelEU Maritime's requirement to reduce greenhouse gas intensity is set to increase from 2% in 2025 to 6% in 2030. The impact would extend beyond European trades. For example, on a Santos-to-Qingdao fronthaul route, which is not subject to European carbon costs, the model estimates expenditure of €61,000 ($68,300) in 2028 and €106,000 ($118,600) in 2030.  

The draft IMO framework

The draft IMO framework combines a global standard for the greenhouse gas intensity of marine fuels with an emissions-pricing mechanism. The initial price of remedial units is set at $100 per tonne of CO2-equivalent for Tier 1 deficits and $380 for Tier 2 deficits between 2028 and 2030.  These provisions are not final. MEPC 85 is scheduled to take place from 30 November to 3 December, with the extraordinary session due to resume on 4 December to consider the framework, subject to confirmation. Existing BIMCO clauses allocate EU ETS allowances to charterers and provide a surcharge mechanism for FuelEU Maritime compliance. According to the analysis, responsibility for future IMO remedial unit costs may need to be addressed explicitly in charter parties

Related: BIMCO adopts biofuel clause to support transition to low-carbon fuels

Ships purchase remedial units to offset their deficit

On the other hand, ships purchase remedial units to offset their deficit; the money is invested in the IMO Net-Zero Fund, which incentivises zero- and near-zero-emission (ZNZ) fuels and facilitates a 'just and equitable transition'. The two rates are fixed for the first period (2028–2030), but the base/direct gap, reward levels and trajectory beyond 2030 are still being negotiated — which is why the adoption vote keeps being postponed.

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Source: Agencies

#Resilience & Compliance Advisory #BIMCO #IMO Net-Zero Framework #MEPC 85 #FuelEU Maritime #Argyris Zafeiropoulos #CO2-equivalent #Rotterdam