FuelEU Pooling Market Participants & What You Should Consider

As the first FuelEU Maritime compliance cycle progresses, the surplus market has expanded rapidly. What began as a maritime compliance instrument has evolved into a traded commodity, and in doing so, it has attracted far more participants than the regulation or its creators appear to have anticipated.

FuelEU pooling rights and who holds them

The regulation assigns the compliance responsibility and as such the right to pool to the ISM company. However, contractual arrangements make it possible to reassign these pooling rights, for example through SHIPMAN or charter party addendums, and we are increasingly seeing structures where this right is contractually separated from any maritime company.

The possibility of such contractual frameworks has resulted in a broad spectrum of FuelEU pooling market participants. On one end, there are the expected ones, ship owners, operators, and managers, entities directly or indirectly involved in fuel procurement, voyage planning, and emissions monitoring. On the other end, there are parties far removed from shipping altogether, including brokers, fuel suppliers, commodity traders, financial intermediaries, and various consulting entities. All of these are technically able to act as sellers or buyers once pooling rights are contractually transferred to them.

A potpourri of FuelEU pooling market participants

The difference between these groups is not philosophical but practical. A ship owner, manager, or operator holds (or has direct access to) the underlying data that determines the compliance balance: fuel quantities, emission factors, voyage definitions, and verifier submissions. They can resolve data inconsistencies, respond to verifier queries, clarify voyage boundaries, correct BDN documentation, or adjust submissions if needed. In short, they are connected to the underlying compliance process. Further, operators also have the actual control over the ship's operations and are therefore able to actively counteract anything going against the plan.

Even in this expected setup, complexities already arise. In some cases, owners and operators both assume they hold pooling rights, leading to attempted double pooling of the same vessel. This is not permitted, and resolving such disputes takes time and delays compliance validation. The risk is contained, however, because the dispute occurs between entities that are, at least, connected to the vessel and the verifier.

The situation changes significantly when the seller is a broker, a fuel supplier, a commodity trader, or another non-operating party. These entities do not operationally or technically control the vessel, do not hold the operational data, are not in contact with the verifier, and cannot react if the compliance balance changes due to data revisions or verifier challenges. Their role is purely commercial. The transaction becomes one where the buyer pays now and waits for compliance to materialise in April of the following year, hoping that the vessel’s operations, bunkering, and monitoring and verification process proceeds without issue. If the compliance balance is revised, questioned, or rejected by the verifier, the seller has no lever to resolve it. At best, the buyer may rely on contractual indemnification likely resulting from a liability chain from surplus generator over seller to buyer.

This is the core distinction. With an owner or operator, the surplus being purchased is grounded in operational control and data transparency. With an intermediary seller, the surplus is contingent on processes and decisions to which neither the seller nor the buyer is connected. The value of the transaction is therefore dependent on the integrity of a chain of responsibility that neither party manages. The further the seller is from the vessel, the greater the counterparty and execution risk. You may pay for compliance but purchase exposure instead.

What does this mean for FuelEU pooling?

The above does not imply that intermediaries are acting in bad faith, nor that such transactions cannot be completed successfully. They can, and some will. As long as pooling rights can be transferred contractually, the market will continue to accommodate a wide range of sellers. The question for buyers is whether they want to take the risk of a seller that is not connected to the data and operational decisions that determine whether the surplus they are purchasing will ultimately exist and hold true by verification end of March of the following year. This is why transparency both on data as well as on the seller is key. Surplus trading is not only a financial decision. It is a compliance decision. And in compliance, proximity to data and control matters.

BetterSea's FuelEU Maritime Platform transparently connects you to sellers, pointing out the seller's industry role, the data availability and accuracy, and it provides you with a streamlined, end-to-end post-trade process. Trade surplus with reduced risks, no additional intermediaries, and the transparency you need to make the right decision.

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Stay tuned for more insights on navigating maritime decarbonisation compliance in our upcoming newsletters. If you have any questions or need further guidance, feel free to reach out!

Best regards,

The BetterSea Team

Contact Us: info@bettersea.tech

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