FuelEU - Banking - A Strategic Tool for Compliance

The FuelEU Maritime Regulation, effective from 2025, is a landmark step toward decarbonising the shipping industry. Among its many mechanisms, banking offers shipowners a practical and strategic way to manage compliance with greenhouse gas (GHG) intensity reduction targets. By saving compliance surpluses generated in the early years, banking provides a flexible tool to offset future deficits as targets become stricter.

This article explains how banking works, why it matters, and how taking steps today can set your fleet up for success.

Understanding Banking and How It Works

Banking allows shipowners to "bank" their over-compliance when their ships perform better than the GHG intensity targets set by the regulation. These surpluses, measured in tonnes of CO? equivalent (tCO?eq), are recorded in the FuelEU database and can be used in future years to offset deficits. This ensures long-term compliance, even as targets tighten, without the immediate need for expensive retrofits or alternative fuels.

Here’s how it works in practice:

When a vessel’s actual GHG intensity (gCO?eq/MJ) is lower than the required GHG intensity, the difference is multiplied by the ship’s energy consumption. This calculation produces the surplus in tCO?eq, which can be saved indefinitely. These banked credits are tied to the vessel, even if it changes ownership, making them a valuable compliance asset.

For example, in 2025, the required GHG intensity is set at 89.34 gCO?eq/MJ. A ship operating on LNG, with an actual intensity of 80 gCO?eq/MJ, would generate a surplus. If the ship consumed 1,000 TJ of energy that year, the surplus would be:

(89.34?80) × 1,000 / 1,000 = 9.34?tCO?eq.

This surplus can be banked and later applied when compliance becomes more challenging.

The Role of Banking in Compliance Strategy

Banking is particularly valuable as GHG intensity reduction targets become stricter. From 2025, these targets decrease by 2% every two years, requiring shipowners to progressively lower their emissions. Banking surplus credits early, when compliance is easier, provides a buffer for future years when meeting targets might require costly interventions or operational sacrifices.

Consider the same LNG-fueled vessel operating from 2025 to 2034. Each year, it generates surpluses that add up to approximately 50–60 tCO?eq over the decade. By 2035, when the required GHG intensity may fall below the ship’s actual intensity (e.g., 75 gCO?eq/MJ), these banked credits can be used to offset the shortfall, ensuring continued compliance without penalties.

Why Banking Matters for Your Fleet

The strategic value of banking lies in its ability to offer flexibility in an era of increasingly stringent regulations. By banking credits early, shipowners can avoid penalties and defer investments in costly retrofits or alternative fuels. Moreover, the long-term validity of banked credits ensures that early over-compliance continues to deliver value even as targets evolve.

For LNG-powered vessels, banking is particularly advantageous. LNG’s relatively low GHG intensity compared to conventional marine fuels makes it easier for ships to generate surpluses in the early years of the regulation. These surpluses become an insurance policy for the future, allowing operators to navigate stricter targets without disruption.

ER-Marine: Your Partner in Energy Efficiency and Compliance

Banking is not just about saving surpluses—it’s about improving your fleet’s efficiency and sustainability. ER-Marine offers tailored solutions to help you reduce fuel consumption and improve energy efficiency, ensuring you generate and bank compliance surpluses while optimizing operational costs.

By investing in energy efficiency upgrades today, your fleet can:

• Reduce fuel consumption.
• Lower GHG emissions.
• Reap the benefits of surplus banking for future compliance flexibility.

As the regulatory landscape becomes more demanding, these steps not only ensure compliance but also position your operations for long-term success.

Banking in Practice: A Real-World Perspective

Imagine a shipowner managing an LNG-fueled vessel:

• In the early years (2025–2034), the vessel consistently performs better than required, generating compliance surpluses each year. These add up to a significant reserve, safely stored for future use.
• By 2035, the vessel faces tougher targets that exceed its GHG performance. Instead of paying penalties or rushing to adopt new technology, the operator draws on the banked surplus to maintain compliance seamlessly.

This approach demonstrates the long-term value of banking as both a cost-saving measure and a compliance safeguard.

Banking for the Future Starts Today

Banking is more than a regulatory mechanism—it’s a strategic opportunity to secure your fleet’s resilience against future compliance challenges. By optimizing energy efficiency now, shipowners can maximize their surplus potential, avoid penalties, and build a foundation for sustainable operations.

At ER-Marine, we specialize in guiding shipowners through these regulatory complexities. Contact us today to learn how our energy efficiency solutions can help your fleet reap the benefits of banking and prepare for a sustainable future.

The future of compliance starts now—don’t wait to bank your success.