Retrospective Compliance Checks: What If Yesterday's FuelEU Compliance Becomes Today's Risk?

One of the lesser-discussed but tricky elements of the FuelEU Maritime Regulation is the power of administering states to conduct retrospective checks, reviewing and re-verifying compliance data after it has already been submitted and even accepted. This retrospective power can reach back two full compliance periods and can have significant implications.

What happens if a ship’s 2025 data is reassessed in 2027? What if that vessel was part of a pool that was declared compliant based on that data?

In today’s newsletter, BetterSea explores how this mechanism works, what the risks are, and how shipping companies can protect themselves.

The Mechanism Behind Retrospective FuelEU Compliance Checks

Under Article 17(1) of the FuelEU Maritime Regulation, administering states may revisit the data and calculations used in previous compliance submissions.

At any time, the competent authority of the administering State in respect of a company may, for any of its ships, conduct, in relation to the two previous reporting periods, additional checks of any of the following: (a) the FuelEU report that complies with this Regulation established in accordance with Articles 15 and 16; (b) the verification report established in accordance with Article 16; (c) the calculations made by the verifier in accordance with Article 16(4).

This includes emission factors, voyage scopes, and compliance balances. If a discrepancy is discovered, for example, a proof of sustainability (PoS) is found invalid, the state may retroactively reclassify a vessel’s compliance status.

The consequences of such retrospective checks could be massive, depending on how the regulations solves the below questions:

• What if one vessel in a pool was misreported and helped others reach compliance?

• What if surpluses from misreported data were banked and traded, these trades could face retroactive financial and legal uncertainty or were used in subsequent pooling causing an additional domino effect?

• What if a vessel offset its penalty through a pool later deemed invalid, the vessel’s operator may face delayed penalties and all involved stakeholders may need to reconcile financially?

Example: The Retroactive Collapse of Pool Compliance

In order to answer the above questions, the below table illustrates a retroactive check of a vessel that engaged in pooling in the corresponding, checked compliance period.

Sample Ship	CB (before pooling & add. check)	CB (after pooling & before add. check)	Revised CB (after add. check)	Revised CB (after add. check & with pooling)
Ship A	100	20 (-80)	70	-10 (-80)
Ship B	-30	0 (+30)	-30	0 (+30)
Ship C	-40	10 (+50)	-40	10 (+50)

Initially, the three ships undergo a pooling procedure compliant with the FuelEU Maritime regulation, fulfilling all applicable pooling rules. After a retrospective check by the administering state, Ship A is found to have misreported its compliance balance resulting in a 30% reduction (100 to 70). The two columns on the right side of the table depict how FuelEU Maritime handles such cases. The pool is considered to be frozen, the other vessels (Ship B and C) of the previously compliant pool are not retrospectively non-compliant, the deficit and respective penalty is only incurred on the defaulting vessel (Ship A).

Conclusion: Be Proactive not Reactive

Retrospective compliance checks may seem distant, but they present a clear regulatory risk with operational, financial, and reputational impacts. As FuelEU Maritime evolves, so does the expectation for transparent, auditable, and conservative compliance behavior. Fortunately, the regulator follows a pathway that does not make retrospective realignment of one or more pooling arrangements neccessary.

BetterSea’s FuelEU Maritime Compliance Platform with integrated marketplace provides you with a fast, streamlined, end-to-end process covering all potential compliance options, including external pooling and surplus trading. It allows you to comprehensively strategize your FuelEU and EU ETS compliance on a ship-specific level amidst volatile markets. Book a demo below!

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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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