FuelEU Maritime:

How the Regime Works and

Why Banking Rights Matter

FuelEU Maritime is a central element of the EU’s maritime decarbonisation framework and applies from 1 January 2025. Its objective is to drive the gradual transition to lower-carbon fuels by imposing a maximum greenhouse gas (GHG) intensity limit on energy used by ships calling at EU and EEA ports. As underlined in DNV’s 2024 White Paper, FuelEU is deliberately structured as a fuel-intensity standard, not a carbon trading or allowance-based regime like the EU Emissions Trading System (ETS).

What FuelEU Maritime Is - and Is Not

FuelEU Maritime applies to ships above 5,000 GT, irrespective of flag. It regulates the GHG intensity of energy on a well-to-wake basis, capturing emissions from fuel production through to onboard use. The scope includes:

• 100% of energy used on intra-EU/EEA voyages and while at berth in EU/EEA ports; and
• 50% of energy used on voyages between EU/EEA and non-EU ports.

Unlike ETS, FuelEU does not create tradable allowances or credits. Compliance is assessed annually for each vessel against a declining GHG-intensity benchmark, which becomes progressively more demanding over time. The commercial signal is therefore indirect but powerful: vessels and fuels with lower lifecycle emissions face lower compliance exposure.

Compliance Assessment and the Role of THETIS

FuelEU compliance is assessed annually using verified fuel and energy consumption data. This data is processed through the FuelEU Database within the THETIS-MRV system, which acts as the central administrative platform for reporting, verification, and compliance management.

Following verification, each vessel is assigned a FuelEU Compliance Balance, either a surplus (positive balance) or a deficit (negative balance). Where pooling is used, the formation of pools, the appointment of a common verifier, and the allocation of compliance balances between participating vessels are all recorded and administered through THETIS. Importantly, THETIS is an administrative and recording tool: it does not determine who is entitled to use a surplus or how its value is allocated. Those questions remain matters of contract.

Responsibility for Compliance

The regulatory obligation to comply with FuelEU rests with the “company”, typically the shipowner or ISM DOC holder. While commercial arrangements may pass FuelEU costs or benefits to charterers or managers, legal responsibility cannot be transferred. This distinction is particularly important where compliance outcomes depend on operational decisions made during the charter period.

Surpluses, Deficits and Flexibility Mechanisms

FuelEU provides several mechanisms to manage compliance outcomes.

Where a vessel generates a surplus, the default position under the Regulation is that it may be banked and carried forward to future years. Banking preserves flexibility and becomes increasingly valuable as FuelEU thresholds tighten.

Alternatively, surpluses may be deployed through pooling, allowing compliance balances from multiple vessels to be combined so that surpluses offset deficits within a defined pool. Pooling must result in net compliance at pool level and is subject to procedural constraints (including one pool per vessel per year). Once a surplus is allocated to a pool and recorded in THETIS, it cannot also be banked for that compliance year.

FuelEU also permits limited borrowing from future compliance years, subject to strict limits and a repayment uplift. Borrowing is designed as a safety valve, not a long-term compliance strategy.

Time Chartering and Operational Decision-Making

FuelEU introduces new complexity where vessels are operated under time charter. Many of the operational decisions that influence FuelEU compliance, such as speed, routing, fuel selection, and fuel procurement, are typically controlled by the charterer, while regulatory liability remains with the owner.

As a result, time charterparties will need to go beyond a simple obligation to “comply with FuelEU.” Parties will need to agree who controls emissions-relevant decisions, who bears the cost of compliance, and who benefits from compliance upside. For example, if a charterer elects to use more expensive, lower-emission fuels during the charter period and this results in a compliance surplus, questions arise as to whether that surplus belongs economically to the charterer, the owner, or the wider fleet. These questions are further complicated by the fact that FuelEU compliance, and the resulting surplus or deficit, is assessed annually, not voyage by voyage.

The same issues arise in reverse where a vessel ends the year with a compliance deficit. Parties must determine how the cost of covering that deficit, whether through pooling, borrowing, or penalties, is allocated, and who controls the process for addressing it. Without clear contractual provisions, there is a real risk of misaligned incentives and post-year disputes.

Banking as the Default Position

A critical commercial point is that banking is the default right under FuelEU Maritime. A vessel that generates a surplus is entitled to retain and bank that surplus unless it is contractually committed to another use.

Pooling does not override banking by operation of law. A loss or subordination of banking rights occurs only where a party has contractually agreed to place surplus into a pool or to grant another party control over its allocation. Neither THETIS nor the Regulation itself reallocates ownership or control of surplus balances; they merely record the outcomes of contractual and operational choices.

Commercial Insight

FuelEU Maritime does not create carbon credits, but it does create strategic scarcity. As compliance thresholds tighten, surplus balances will become rarer and more valuable. The most significant risk under FuelEU is therefore not regulatory uncertainty, but contractual leakage, unintentionally giving up statutory banking rights or economic upside through poorly drafted charter or pooling arrangements.

Owners and charterers who treat FuelEU as a strategic allocation issue, rather than a compliance afterthought, will be best placed as the regime matures.