The European Council has formally adopted the FuelEU Maritime Regulation. The main objective of the FuelEU Maritime initiative, as a key part of the EU’s Fit for 55 package, is to increase the demand for and consistent use of renewable and low-carbon fuels and reduce the greenhouse gas emissions from the shipping sector, while ensuring the smooth operation of maritime traffic and avoiding distortions in the internal market.

The new regulation contains the following main provisions:

• Measures to ensure that the greenhouse gas intensity of fuels used by the shipping sector will gradually decrease over time, by 2% in 2025 to as much as 80% by 2050.

• A special incentive regime to support the uptake of renewable fuels of non-biological origin (RFNBO) with a high decarbonization potential.

• An exclusion of fossil fuels from the regulation’s certification process.

• An obligation for passenger ships and containers to use on-shore power supply for all electricity needs while moored at the quayside in major EU ports as of 2030, with a view to mitigating air pollution in ports, which are often close to densely populated areas.

• A voluntary pooling mechanism, under which ships will be allowed to pool their compliance balance with one or more other ships, with the pool—as a whole—having to meet the greenhouse gas intensity limits on average.

• Time-limited exceptions for the specific treatment of the outermost regions, small islands, and areas economically highly dependent on their connectivity revenues generated from the regulation’s implementation (‘FuelEU penalties’) should be used for projects in support of the maritime sector’s decarboniZation with an enhanced transparency mechanism.

• Monitoring of the regulation’s implementation through the European Commission’s reporting and review process.

Following the formal adoption by the Council, the new regulation will be published in the EU’s official journal after the summer and will enter into force the twentieth day after this publication. The new rules will apply from 1 January 2025, apart from articles 8 and 9 which will apply from 31 August 2024.