As shipping companies work on their strategies for compliance with FuelEU Maritime, they are considering different models for trading compliance surpluses and pooling. Two primary options arose: marketplaces, driven by all individual marketplace participants, and super pools, structured around centralized management by a single provider.
Today, we look at the key categories for consideration and the main differences between these models, focusing on structure, transparency, and participant autonomy. By understanding these contrasts, companies can make informed decisions about the best fit for their compliance strategy.
Pooling Structure and Flexibility
Open Marketplace: An open marketplace supports independent participation for both surplus and deficit companies. Each entity maintains control over its participation, with options to join various pools based on their compliance needs. This open structure supports a participant-driven pooling experience, offering flexibility and independence in navigating compliance with FuelEU Maritime.
Super Pool: The super pool is typically a closed, centralized structure managed by one provider who aggregates and manages surplus on behalf of all participants. This centralization limits participant-driven decisions, as users must rely on the provider to structure and operate the pool. This model may appeal to companies seeking an all-in-one option, but it offers strongly limited flexibility for participants to independently navigate their compliance strategies due to its centrally controlled setup.
Financial and Transactional Transparency
Open Marketplace: In an open marketplace, transactions take place with full transparency on pricing and verified data. Each participant manages their own costs with a clear and transparent view of surplus pricing, often supplemented by streamlined financial setups for added security. This transparency gives participants direct control over their compliance budget.
Super Pool: In a super pool, the provider often manages and invoices participants based on aggregate balances and monthly adjustments. While this approach can simplify budgeting, the lack of visibility into granular costs can lead to blurred pricing where participants rely on the provider’s calculations rather than on itemized, participant-specific invoices. Further, the participants gain no transparency on the surplus market value as pricing is centrally controlled by a single provider.
Risk Management and Liability
Open Marketplace: With an open marketplace, risk management is built into the model through participant-individual streamlined financial and risk mechanisms, allowing participants to understand their share of liabilities and financial risks. By structuring liability on a per-participant basis, the model distributes risk proportionally across contributors, enhancing transparency in risk allocation. A marketplace’s exposure to a large number of surplus generators and deficit holders forming several pools independently also allows for a faster speed of reaction and a higher probability of resolution if risk is identified.
Super Pool: In contrast, a super pool typically assigns full compliance responsibility to the provider, introducing a “trust me” element where participants rely heavily on the provider’s assurances for managing risks. This structure may appeal to those looking for an all-inclusive service, but it can also mean that participants have limited control over compliance monitoring, realignment, and cost transparency, which some may see as an increased risk.
Operational Autonomy for Participants
Open Marketplace: Participants in an open marketplace can enter pools independently, making it easier to choose participation based on operational and compliance needs. This autonomy allows companies to customize their approach to FuelEU compliance, aligning pool involvement with their specific goals.
Super Pool: The super pool model is largely provider-controlled, meaning that decisions about pool membership, surplus generation, and other operational aspects are centralized or undergo a complex multistakeholder alignment. Participants in this model may find their operational freedom restricted, limiting the scope for independent decision-making.
Surplus Management and Monetization Potential
Open Marketplace: Surplus management in an open marketplace is participant-driven, empowering companies to actively trade surpluses in a transparent environment. This allows for the best surplus pricing as the surplus value is transparent and competitive. It further gives participants direct control over trading decisions and profits.
Super Pool: In the super pool model, surpluses are managed centrally by the provider. While this approach can simplify compliance for participants, it offers an increased risk of lower monetization or higher costs as surplus control is retained by the pooling provider.
Key Takeaways of Comparing Marketplaces and Super Pools as Options for FuelEU Maritime Pooling
While both models aim to support FuelEU Maritime compliance, they differ significantly in structure, transparency, and participant autonomy. The super pool model offers a managed, centralized service, which may appeal to companies seeking simplicity, but it requires a high level of trust in the provider’s management. Conversely, an open marketplace offers a transparent and flexible environment that gives participants greater control over their compliance and operational decisions. Ultimately, when comparing marketplaces and super pools as options for FuelEU Maritime pooling, the choice between these models depends on your company’s compliance strategy, risk tolerance, and desire for operational autonomy.
If you want to combine the best of both worlds, a fully streamlined and simple FuelEU Maritime compliance solution combined with a participant-driven, transparent, and open marketplace, book a product demo to explore BetterSea’s FuelEU Compliance Platform below!
Stay tuned for more insights on navigating these complex challenges in our upcoming newsletters. If you have any questions or need further guidance on selecting the right compliance model, feel free to reach out!
Best regards,
The BetterSea Team
Contact Us: info@bettersea.tech
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