Unlocking FuelEU Maritime compliance with wind

New year, new regulation, new headache for shipping companies? FuelEU Maritime is upon us, joining its ‘sister’ carbon emission reduction measure – 2024’s EU Emissions Trading System (EU ETS) – to redefine the industry’s regulatory landscape. The demands are great, the targets ambitious and the penalties significant, but is there also opportunity within the challenge?  

Here at bound4blue we believe the answer is ‘YES’, with advanced wind assisted propulsion systems (WAPS) the key to unlocking both compliance and commercial advantage for forward-thinking shipowners and operators. 

What is FuelEU Maritime? 

In short, it’s a groundbreaking regulatory framework designed to reduce greenhouse gas (GHG) emissions from the maritime industry. Hold on, you may ponder, isn’t that the same as EU ETS? Well, no.  

EU ETS focuses on tank-to-wake emissions (fuel usage onboard), while FuelEU Maritime considers well-to-wake emissions, basically the entire fuel lifecycle. This creates a different impetus when selecting fuels – e.g. a biofuel that produces zero vessel CO2 emissions may ‘tick all the boxes’ for EU ETS, but could incur heavy penalties under FuelEU Maritime. That’s a key difference that’s worth keeping in mind. 

So, how does it work?  

FuelEU Maritime sets annual GHG intensity reduction targets for energy used by ships operating within the EU and European Economic Area (EEA). These targets are measured in grams of CO2 equivalent per megajoule (gCO2e/MJ) from a total extraction to consumption (well-to-wake) perspective. 

Starting from a baseline of 91.16 grams of CO2 per megajoule, the average well-to-wake GHG intensity in 2020, a relatively modest reduction target of 2% has been set for 2025. However, this climbs rapidly to 6% by 2030 and carries on accelerating all the way up to an 80% reduction by 2050.  

The financial penalties for non-compliance ascend in line with the targets, making it absolutely imperative for shipping companies to assess, and then adopt, compliant technologies as soon as possible. Delays in this process will, you can appreciate, be costly. 

Which brings us sailing onto wind. 

The role of wind assisted propulsion systems in compliance 

Wind assisted propulsion systems (WAPS) offer a transformative solution for the industry to meet FuelEU Maritime requirements. By harnessing a proven, free and readily available green power to reduce fuel consumption and emissions, WAPS deliver powerful compliance and bottom-line benefits. Here’s how: 

Lowering GHG intensity with the Wind Reward Factor 

One of the key advantages of WAPS lies in their ability to reduce a ship’s GHG intensity through the Wind Reward Factor (WRF).  

This device, incorporated into the calculation of emissions (GHG intensity = fwind x [WtT + TtW]), effectively relaxes targets for ships equipped with WAPS. Depending on the proportion of wind energy used for propulsion (Pwind/Pprop), the WRF ranges from 0.95 to 0.99. Put simply, this makes FuelEU Maritime compliance easier for vessels with wind assisted propulsion systems, than for those without. 

And, as Santiago Suárez, Ship Performance Manager at Lloyd’s Register, highlighted during a recent bound4blue webinar, there’s added value benefits over the long-term: 

“Users of wind assisted propulsion systems gain a double advantage under the new European regime. The initial benefit is that such solutions reduce fuel consumption and therefore the number of EU Allowances that need to be surrendered for each voyage under EU ETS. But a further reward is supplied by FuelEU Maritime, which offers up to a 5% reduction on the GHG intensity calculation of energy used onboard for those vessels where wind assisted propulsion accounts for 15% or more of the energy used for propulsion. 

“In practical terms this means that a ship burning LFO in European waters would face a penalty of roughly 52€ per ton burnt. The same ship with a WAPS installation qualifying for the maximum reward factor, would not only save those 52€ per ton but also would bank an additional 72€ per ton in surpluses.” 

When considering long-term operations, across multiple vessels within a fleet, these savings are potentially HUGE. An assessment highlighted by bound4blue CEO José Miguel Bermúdez in this compelling case study. 

➡️ Watch the full recording of the webinar ⬅️

There’s a price to pay for delay 

Although FuelEU Maritime is now firmly on the industry’s radar, many shipping companies may be considering delaying strategic compliance decisions, choosing instead to pay penalties they may deem to be ‘manageable’.  

This has the potential, for some, to be a catastrophically expensive approach. 

FuelEU Maritime penalties are not static. They escalate and compound over time, meaning that today’s small fines could turn into tomorrow’s insurmountable financial burdens. A short-term perspective carries real long-term risk. 

Furthermore, the earlier a company starts with compliance the better its understanding of fleet environmental performance and the more options it has for improvement. In the race for sustainability, those setting off today have a much better chance than a competitor – who has previously watched from the sidelines – trying to get up to speed from a standing start, without much training. 

Bearing that in mind, proactive adoption of solutions such as WAPS are an intelligent investment in long-term financial and operational stability. 

Strategic advantages of pooling and banking 

The benefits of wind assisted propulsion systems can also extend far beyond individual vessels to encompass entire fleets.  

Through FuelEU Maritime’s ‘pooling’ and ‘banking’ facility, companies can group fleets together and average collective GHG intensity reductions. This allows the superior performance of some vessels — especially those equipped with WAPS, such as bound4blue’s eSAIL® suction sails — to offset the less impressive performance of others. 

Two very clear strategic advantages can be unlocked here: 

1. Reduced immediate investment costs: Instead of outfitting every vessel with WAPS simultaneously, companies can focus on retrofitting selected ships, leveraging the pooled performance for compliance. 
2. Reinvestment opportunities: By avoiding fines through pooling, savings can be reinvested in future upgrades, creating a self-sustaining cycle of innovation and compliance. 

And let’s not forget the banking feature. This gives companies the ability to store surplus GHG intensity reductions for future use, with no expiration date, providing a buffer against unforeseen challenges and ensuring long-term compliance. 

The pathway to FuelEU Maritime compliance: what should shipowners do now?  

1. Submit a FuelEU Monitoring Plan to an accredited verifier. 
2. Begin reporting emissions data by January 2025. 
3. Verify partial reports within a month of company changes. 
4. Submit annual reports by January 2026. 
5. Obtain compliance approval by April 2026. 
6. Ensure the FuelEU Document of Compliance is onboard by June 2026. 

Conclusion: Set sail today 

FuelEU Maritime is a wake-up call for shipowners operating in Europe, and a potential sign of things to come for a global industry transitioning away from carbon-intensive fuels.  

However, too much focus on the ‘stick’ of compliance makes it easy to lose sight of the ‘carrot’ of opportunity on offer here. 

Early WAPS movers can gain strong competitive advantage, adopting environmentally friendly innovations to achieve significant bottom-line advantages – both in terms of fuel and cost efficiencies (eSAILs® can unlock double digit percentage savings), and dramatically reduced penalty costs. 

Those that choose to stand still today, paying penalties and biding time, may find themselves crippled by mounting costs in the future – making their businesses unsustainable in every sense of the word. 

Now is the time to set sail for greener, more profitable and compliant horizons. Contact us to find out more. 

About the author

Cristina Aleixendri, Chief Operations Officer and co-founder of bound4blue, holds a BSc. & MSc. in Aeronautical Engineering and an Executive MBA from IESE Business School. She has also attended several business programs at the University of Cambridge, ESADE Business School and Singularity University. Cristina has participated in more than 10 national and European projects, being the inventor of more than 5 patents in the field of wind-assisted propulsion systems and its various applications (such as hydrogen generation).