As we approach 2025, companies preparing for FuelEU Maritime compliance will need to adapt to yet another update: the shift from AR4 (IPCC’s Fourth Assessment Report) to AR5 (IPCC’s Fifth Assessment Report) Global Warming Potentials (GWPs). This adjustment has been mentioned by the European Maritime Safety Agency (EMSA) to be implemented before the start of FuelEU Maritime in January 2025 and will affect how greenhouse gas emissions are calculated for compliance under the regulation.
This week’s newsletter sheds light on what to expect from the transition to AR5 and how it impacts emissions calculations.
What is changing from AR4 to AR5?
The Global Warming Potentials (GWPs) for greenhouse gases (GHG) were updated in the IPCC’s AR5, which includes revised values for methane (CH4) and nitrous oxide (N2O). These changes will impact the GHG emission factors used under FuelEU Maritime. Companies must be prepared to adjust their calculations and strategies accordingly if based on AR4.
In general, the updated GWPs in AR5 reflect a more accurate understanding of each gas’ impact on the environment over a 100-year period. Table 1 indicates the changes in GWP values for methane and nitrous oxide.
These values will replace the current AR4-based GWPs used to calculate emissions under FuelEU Maritime.
How does this impact GHG Intensity Calculations?
The shift to AR5 will result in higher GHG intensities for fuels with methane emissions, as the GWP of CH4 has increased. The tank-to-wake GHG emission factor is calculated as per the below-simplified formula
in case of a methane slip, the same structure is applied. Please find more detailed information in Annex II of the FuelEU Maritime regulation.
Table 2 depicts the well-to-wake GHG emission factor for different fuels considering AR4 and AR5, red values indicate an increase in emission factor from AR4 to AR5, and green values a decrease.
Implications & Changes for FuelEU Maritime Compliance
The transition to AR5 and the increase in emission factors for some of the fuels as depicted in Table 2 means:
Higher compliance costs if GHG intensities exceed regulatory limits.
Recalculated penalties or surplus under FuelEU.
Shipping companies that rely heavily on fuels like LNG should take particular note of these changes, as the updated GWPs in AR5 will have a greater impact on LNG’s emission factors. Most notable is the change for LNG Otto dual fuel medium speed engines which are compliant under AR4 but not under AR5.
Steps for shipping companies that have used AR4 before
Track EMSA and EU Announcements: Stay updated on official announcements from EMSA or the EU, as any further guidance on AR5 (or later) implementation will affect compliance calculations.
Plan for Adjusted Emission Factors in 2025: Use AR5-based calculations for compliance scenarios to prepare for regulatory requirements starting in January 2025.
Review Compliance Strategies: Reassess current compliance strategies. Consider recalculating the fleet’s GHG intensity to forecast potential impacts.
Conclusion
The transition to AR5 GWPs is an important update to consider when calculating GHG intensities for FuelEU Maritime compliance. By understanding the upcoming changes and recalculating emission factors where needed, shipping companies can proactively adjust their compliance strategies, avoid potential penalties, and manage compliance costs effectively.
BetterSea's free online FuelEU Maritime Calculator & Strategizer allows for calculating with AR4 GWP as well as with AR5 GWP values, start calculating the changes!
Stay tuned for more updates on regulatory developments in our upcoming newsletters. If you have any questions or need further guidance on how to calculate GHG intensity or emission factors under FuelEU, feel free to reach out!
Best regards,
The BetterSea Team
Contact Us: info@bettersea.tech
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