FuelEU implementation to be postponed in Norway and Iceland

December 30, 2024, by Sara Kosmajac

The FuelEU Maritime regulation, set to enter force January 1, 2025, will face delays in its application to Norway and Iceland due to its postponed incorporation into the European Economic Area (EEA) Agreement, the UK-based classification society Lloyd’s Register (LR) revealed.

The Norwegian Maritime Authority (NMA) elaborated that this delay occurred due to the ‘convoluted’ nature of the EEA process which involves multiple steps, but that Norway is striving to expedite the EEA Joint Committee’s decision.

“We have worked hard to ensure the new legislation enters into force in Norway on 1 January 2025. The Norwegian legislation is ready to be adopted but can only take effect following a decision by the EEA Joint Committee,” said Alf Tore Sørheim, Interim Director General of Shipping and Navigation.

As informed, the Norwegian Maritime Authority has previously urged all shipping companies covered by this legislation to adhere to the EU deadlines for creating a FuelEU monitoring plan and, in spite of the delay, the NMA still recommends to all ship owners and operators to gear up ‘ahead of time’, i.e. before the regulation is officially implemented in the country.

That said, as a direct result of the postponement, all of the ports in both Norway and Iceland will be regarded as third-country ports in a FuelEU context from January 1, 2025, until the incorporation in the EEA Agreement, the NMA said.

“This means that, during this period, only half of the energy consumed between a port of call in Norway or Iceland and a port of call in the EU will fall under the scope of FuelEU. Energy consumed on voyages within Norway or between Norway and non-EU countries during this period will remain outside the scope of FuelEU,” Marte Hustveit Hauge, Senior Adviser, Department for Legislation and International Relations at NMA, elaborated.

As per LR, FuelEU Maritime—which was given the official green light by the EU Council in 2023 after its final rules were adopted—does permit specific routes and ports in respect of the energy used on voyages performed by passenger ships (aside from cruise ships) between ports of call located on an island with fewer than 200,000 inhabitants within a Member State to be exempted.

In addition to this, passenger ships that provide maritime transport services under public service obligations or contracts on certain routes between mainland and island ports can also be exempted.

Such examples can be found in Denmark, Greece, Italy and Malta, LR shared, where exceptions for certain ports, islands and passenger ships have been granted. However, the classification society underscored that FuelEU Maritime does not permit these exemptions to apply beyond December 31, 2029.

With the regulation being just days away, Norway’s classification society DNV recently reflected on the challenges that FuelEU Maritime may bring to industry players as they recalibrate their strategies to meet all the necessary stipulations.

In its whitepaper “FuelEU Maritime – Requirements, compliance strategies, and commercial impacts”, DNV placed a particular emphasis on the matter of compliance, outlining recommendations and tactics for shipowners to navigate the upcoming new reality.

Compliance costs have been a burning issue for many maritime stakeholders, but, according to DNV, there are a number of actions that can be adopted to reduce costs without penalty.

For instance, DNV’s study unveiled that using liquefied natural gas (LNG) and bio-LNG could be the least costly compliance strategy as it offers a lower well-to-wake GHG intensity than needed during the first 10 years of the period compared to MGO-fueled vessels.

Among other recommendations, DNV also proposed to shipowners that they:

Commence preparing the organization and fleet for FuelEU Maritime and identify the most optimal compliance method;
Consider long-term fuel offtake agreements to ensure access to low GHG intensity fuels;
Look further into energy-efficiency measures to reduce fuel and compliance cost;
Include provisions for FuelEU Maritime in contractual terms and ensure access to verified emissions data.