As the maritime industry adapts to the upcoming FuelEU Maritime regulation, one area that presents unique challenges is the compliance of ships with ice class. These are essential for maintaining global trade routes that pass through colder climates. The ships are designed to handle harsh sea ice conditions, but their unique operational needs and technical characteristics also mean higher energy consumption, complicating their efforts to meet the regulation’s greenhouse gas (GHG) intensity targets.
To ensure that this regulation does not unfairly burden ice-class ships, the FuelEU Maritime regulation supports such ships and offers specific exemptions. This week, we explore these exemptions in more detail and outline how this is different from the current EU ETS. For more information on the alignment of different ice classes, please follow the HELCOM recommendation 25/7.
FuelEU Maritime Exemptions for Additional Energy Consumption of Ice Class and Sailing in Ice
Under the FuelEU Maritime regulation, some provisions allow companies operating ice-class ships to exclude additional energy consumption due to the technical characteristics of the ship and navigation in ice conditions from their compliance balance.
Technical Characteristics of Ice-Class Ships: According to Article 8(3)(n) and Annex V of the regulation, companies may request to exclude additional energy used due to the ship's ice class from the compliance balance. This provision applies specifically to ships with ice classes IA or IA Super.
Sailing in Ice Conditions: Article 3(23) defines "sailing in ice conditions" as the navigation of an ice-class ship in areas within the ice edge. The regulation permits companies to exclude the energy used during such voyages from their compliance balance. To do so, companies must provide detailed information on the vessel's ice class, the distance traveled in ice conditions, and the fuel consumed during these voyages.
Note, that EU ETS does not allow for the inclusion of the second bullet point, sailing in ice conditions, but only considers the higher energy consumption due to the physical difference of ice-class ships.
How to Calculate Adjusted Energy for Ice-Class Ships
The process of adjusting for additional energy consumption is detailed in Annex V of the regulation:
Additional Energy Due to Ice Class: For ships with ice class IA or IA Super, the additional energy consumption due to their technical characteristics is calculated as a percentage (5%) of the total energy used on all voyages (excluding additional energy due to sailing in ice conditions).
Additional Energy Due to Ice Conditions: For ships navigating through ice and ice class IC, IB, IA, or IA Super, the additional energy consumption is calculated by subtracting the energy used for open-water voyages and the adjusted energy for ice voyages from the total energy used.
Total Additional Ice Energy: The total additional energy due to ice is the sum of both the technical and operational energy (as per above) for ice-class ships, which is then allocated to the different fuel types used during the year.
Please find the exact formulas for calculating ice class exemptions in Annex V of the FuelEU Maritime regulation.
Reporting Requirements and Verification
To benefit from these exemptions, companies must ensure that they provide accurate and verifiable data, as outlined in Article 15(1)(g-h). This includes information on the ship's ice class, the distance traveled in ice conditions, and the corresponding fuel consumption. This data collection is not known from EU ETS and therefore must be established.
Next Steps for Ice-Class Ships
Responsible entities for ice-class ships need to prepare for the documentation requirements outlined in the regulation and should stay informed about any updates of the regulation as this provision is valid only until December 31, 2034.
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 apply these exemptions, feel free to reach out!
Best regards,
The BetterSea Team
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