Case Study X: Optimizing FuelEU Compliance Through Smart Fuel Allocation

Navigating Compliance and Optimization in FuelEU with Biofuels

With increasing FuelEU exposure and costs, vessels calling the EU must make every gram of CO₂e count. Today’s case study analyzes a practical voyage scenario involving sustainable biofuels on an EEA-in/outgoing roundtrip. We focus on optimizing FuelEU compliance through fuel allocation.

Example 1: Bio30 on EEA-In/Outgoing Roundtrip – The Need for Fuel Stream Separation

Consider a vessel that arrives at an EU port, like Hamburg, from New York. This journey involves using fossil fuels (VLSFO and MDO) on the incoming leg. For the outgoing leg, the vessel departs toward New York using Bio30. Bio30 is a blend of 30% sustainable biofuel and 70% MDO.

• Roundtrip: New York - Hamburg - New York

• Speed: 24 knots

• Duration: Approximately 6 days

• Fuel consumption (New York to Hamburg): 400 tonnes MDO + 900 tonnes VLSFO

• Fuel consumption (Hamburg to New York): 1305 tonnes Bio30 (877 tonnes MDO, 431 tonnes Bio100)

• Regulatory Scope: 50% exposure to FuelEU Maritime

  
  

Under FuelEU Maritime, compliance calculations require separate reporting of each fuel stream. This includes the bio component (e.g., UCOME or HVO) and the fossil component. The energy content of each must be disaggregated. Only the energy consumed during 50% of each voyage leg is eligible for compliance.

To do this correctly, the biofuel blend must be split into its constituents based on lower calorific values (LCV). This split allows for the allocation of sustainable biofuel energy to the 50% energy falling under the regulatory scope.

This disaggregation and allocation must comply with FuelEU guidelines. It should also be reported in the FuelEU database. The flexible allocation logic of FuelEU Maritime allows for optimization. This process assigns compliant energy (the bio portion) to the 50% energy falling under the regulatory scope. The fossil portion then carries a penalty. However, allocating MDO instead of VLSFO yields a slightly better GHG intensity.

• Total Energy under the FuelEU Scope (50%): 53M MJ

• VLSFO Consumption to consider: 0 tonnes

• Bio100 Consumption to consider: 431 tonnes

• MDO Consumption to consider: 877 tonnes

  
  

Figure 1: Optimized fuel allocation across two voyages with Bio30

The resultant FuelEU Maritime compliance costs/surplus are as follows:

• FuelEU GHG Intensity: 73.41926 g CO2e / MJ

• FuelEU Compliance Balance: 851 t CO2e

• FuelEU Surplus Value: 217,005.00 €

• FuelEU Penalty: 0.00 €

  
  

Example 2: Using Bio70 and Optimizing FuelEU Compliance Through Fuel Allocation

Now, let’s consider a similar scenario with Bio70 used on the outgoing leg. In this case, 70% of the energy used during the voyage comes from sustainable biofuel. This higher blend ratio significantly enhances the vessel's GHG intensity.

• Roundtrip: New York - Hamburg - New York

• Speed: 24 knots

• Duration: Approximately 6 days

• Fuel consumption (New York to Hamburg): 400 tonnes MDO + 900 tonnes VLSFO

• Fuel consumption (Hamburg to New York): 1377 tonnes Bio70 (376 tonnes MDO, 1,007 tonnes Bio100)

• Regulatory Scope: 50% exposure to FuelEU Maritime

  
  

In this scenario, fuel allocation is vital for maximizing compliance benefits under FuelEU Maritime. Instead of assessing each voyage separately, the overconsumption of biofuel during the outgoing leg can be reallocated to the ingoing leg. This strategy improves the ship's overall compliance status, as shown in the diagram below.

• Total Energy under the FuelEU Scope (50%): 53M MJ

• VLSFO Consumption to consider: 0 tonnes

• Bio100 Consumption to consider: 1,007 tonnes

• MDO Consumption to consider: 376 tonnes

  
  

Figure 2: Voyage-based vs Year-to-Date (YTD) based fuel allocation across two voyages with Bio70

The resulting FuelEU Maritime compliance costs/surplus are:

• FuelEU GHG Intensity: 50.26080 (62.01954) g CO2e / MJ

• FuelEU Compliance Balance: 2,091 (1,463) t CO2e

• FuelEU Surplus Value: 533,205.00 (373,065.00) €

• FuelEU Penalty: 0.00 (0.00) €

  
  

The values in parentheses indicate compliance figures if fuel allocation had not been optimized. A striking increase of around €160,000 in surplus value was achieved through optimal fuel allocation across two voyages.

Strategic Insights on Fuel Allocation

1. Disaggregation is Key: Understanding and reporting the separate fuel streams is vital for accurate compliance.

2. Leverage Higher Blend Ratios: Blending with higher percentages of sustainable biofuels like Bio70 unlocks more compliance value.

3. Optimize Fuel Allocation: Effective management of fuel allocation can significantly improve compliance outcomes across voyages.

   
   

BetterSea's FuelEU Maritime Platform assists you in finding the best compliance pathway amidst the complexities of FuelEU. Utilizing alternative fuels can be challenging, especially if they aren’t readily available at ports. Our FuelEU Pooling Marketplace offers a streamlined process for compliance. We cover all potential options, including external pooling and surplus trading. This service allows you to develop a tailored strategy for your FuelEU and EU ETS compliance, even in volatile markets.

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Stay tuned for more insights on navigating maritime decarbonization compliance in our upcoming newsletters. For any questions or further guidance, feel free to reach out!

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The BetterSea Team

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Surplus value 255€/tCO2e, Bio100 LCV 0.03720 MJ/g, Bio100 GHG Intensity 32.9 gCO2e/MJ, Numbers have been rounded.