Most essential for compliance with FuelEU Maritime is the emission factor used to determine the GHG intensity. The emission factor under FuelEU Maritime measures a fuel's lifecycle emissions (well-to-wake), which are expressed in grams of CO2 equivalent per megajoule (g CO2e/MJ). Today’s newsletter sheds light on where to find a fuel’s emission factor and how it is derived:
Where to find a fuel’s emission factor for calculations under FuelEU Maritime?
FuelEU Maritime is the first EU regulation for shipping considering not only tank-to-wake emissions, those occurring when combusting fuel onboard, but also well-to-tank emissions, caused by, for example, the production of the fuel. This required the definition of well-to-wake emissions for maritime fuels, a new set of emission factors. When calculating the penalties under FuelEU Maritime, the use of the right emission factors determines correctness.
The regulation provides default emission factors for the most commonly used fuels such as HFO or LFO under Annex II.
Less common fuel types, including biofuels, are not defined in the above-mentioned Annex II. The document instead refers to the EU’s Renewable Energy Directive (RED). Compliance of fuels with this regulation is proven by the International Sustainability & Carbon Certification (ISCC) and documented on a fuel’s Proof of Sustainability (PoS). The corresponding emission factor not mentioned in Annex II of the FuelEU Maritime regulation can, therefore, be found under Section 3 of its PoS document.
What does the Proof of Sustainability (PoS) document include?
The PoS document has three different sections beyond mentioning the supplier and recipient, those are:
General Information
Sustainability criteria
Greenhouse Gas Information
The section ‘Greenhouse Gas Information’ outlines both the well-to-wake emission factor as well as the emission factors for the underlying steps of the lifecycle. Those are:
Emissions from the extraction or cultivation of raw materials eec
These are the emissions associated with the cultivation or extraction of raw materials. It includes greenhouse gases from the application of fertilizers, energy for machinery, and irrigation. Field-level data such as fertilizer use and diesel consumption must be accounted for, along with emissions from the production of chemicals used in cultivation.
Emissions from carbon stock change caused by land-use change el
If there has been a change in land use (e.g., forest to farmland) after a specific cutoff date, emissions from the carbon stock change must be included. This is annualized over a 20-year period, using carbon stock calculations that compare the former and current land use.
Emissions from processing ep
Processing emissions include energy used for converting raw materials into fuels, such as electricity and heat consumption, and the production of intermediate goods. For example, emissions from the generation of steam or other energy sources in production facilities need to be included.
Emissions from transport and distribution etd
Emissions related to the transportation and distribution of raw materials and final products are calculated based on fuel use and distance traveled. This also includes emissions from storage.
Emissions from use of fuel eu
These emissions occur during the use phase of the fuel. In the case of renewable fuels, this typically refers to emissions from burning the fuel. This is subtracted from the total emissions to provide net emissions.
Emission saving from soil carbon accumulation esca
Emission savings from improved agricultural management, such as better tillage practices or improved crop rotation, may further reduce the emissions attributed to the cultivation phase.
Emission savings from CO2 capture and replacement eccr
This refers to the CO2 captured from processes, which replaces fossil-derived CO2 in other industries. This results in a net emission reduction.
Emission savings from CO2 capture and geological storage eccs
Emissions can be reduced by capturing and storing carbon, such as in biofuel production where CO2 is sequestered instead of released.
Emission savings from excess electricity eee
Occurring excess electricity can be fed into the grid and replace fossil-based electricity resulting in emission savings.
To derive the resulting emission factor, each fuel supply chain participant needs to provide the relevant intermediate emission factors together with a sustainability certification that outlines which option was chosen to come up with the corresponding values. Options include:
The use of total default values
The use of disaggregated default values
The use of actual values
Combination of the above
A final verification of the values by an auditor marks the end of creating a fuel’s PoS.
Challenges of the Proof of Sustainability under FuelEU Maritime
Considering the amount of reporting stakeholders, one of the main challenges with emission factors for biofuels under FuelEU Maritime is the timely delivery of the proof of sustainability, which can take up to three months. During this time, the shipping company can only work with an estimate that might change with the delivery of the PoS, resulting not only in a changed emission factor but also a compliance penalty or surplus value.
Default vs. Actual Values
Beyond the PoS, it is noteworthy that the FuelEU Maritime regulation allows for both default values and actual values to be used under specific circumstances when reporting the fuel’s emission factor.
The regulation allows the use of actual values derived from either direct measurements or laboratory testing according to applicable international standards for all emission factors except well-to-tank emission factors from fossil fuels and tank-to-wake CO2 emission factors from fossil fuels.
The well-to-wake performance of renewable and low-carbon maritime fuels should be established using default or actual and certified emission factors covering the well-to-tank and tank-to-wake emissions. For the purpose of this Regulation, only default well-to-tank emission factors and default tank-to-wake CO2 emission factors for fossil fuels should be used.
For more detailed information, refer to the full text of the FuelEU Maritime Regulation (EU) 2023/1805 on the EUR-Lex website.
Conclusion
FuelEU Maritime, its compliance and penalty, strongly rely on the correct usage of emission factors. Shipping companies can use default factors but also actual values are possible for specific types and circumstances. Getting an understanding of where to find the right emission factor and the available options is crucial for the most optimal compliance with FuelEU Maritime.
Stay tuned for more insights on navigating these complex challenges in our upcoming newsletters. If you have any questions or need further guidance on how to handle the different emission factors and options, feel free to reach out!
Best regards,
The BetterSea Team
Contact Us: info@bettersea.tech
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