by Alex Routledge, CEO
In July 2023, the European Commission rolled out a new regulation to help cut greenhouse gas (GHG) emissions by 55% by 2030. This rule mandates ships to use cleaner fuels and energy, targeting not just CO2 but also methane and nitrous oxide. It sets limits on the GHG intensity of energy used by ships larger than > 5000GT, carrying passengers and cargo, and calling on European Union (EU) ports. It’s based on reported fuel consumption and emission factors of fuels on a well-to-wake basis.
Additionally, ships must connect to onshore power at major EU ports by 2030, expanding to all EU ports by 2035. Exceptions include short stays or the use of zero-emission technologies while docked.
Mechanisms for Compliance
Shipping companies should have submitted a monitoring plan by 31 August 2024 for each ship, detailing methods for tracking and reporting energy usage based on 2020 reference levels. Financial penalties will apply for exceeding energy use limits, payable in the reporting year following the data collection.
To minimize penalties and aid in the ship’s compliance, shipowners have several mechanisms:
- Pooling: Compliance can be pooled between vessels, allowing an overly compliant vessel to offset a noncompliant vessel.
- Banking: Over-compliant vessels can bank surplus compliance for future years without expiration.
- Borrowing: Owners can borrow credits from other owner/operators to limit financial exposure.
These mechanisms create a strong incentive to reduce the GHG intensity in EU waters. Deploying energy-efficient technologies (EETs), such as Armada Technologies’ Passive Air Lubrication System (PALS), can support the return on investment by enabling vessels to generate revenue through credit sales.
Armada’s PALS reduces drag between a ship’s hull and the surrounding seawater, thereby enhancing fuel efficiency and cutting GHG emissions. Unlike traditional systems that rely on high-energy compressors, Armada’s PALS uses the ship’s own forward motion of the ship to draw air, creating an air-water mixture that is injected into the vessel’s boundary layer, significantly reducing drag and fuel consumption.
Johann van de Merwe, CFO of Armada Technologies, explains the impact of PALS on fuel savings and GHG emissions. “Under the same working assumptions that Armada’s PALS will be able to flatten the operating curve as an energy efficiency technology, generating ongoing fuel savings of 8 – 12%, the amount of GHG emissions upon which levies will be charged will be 8 – 12% lower. For vessels using heavy fuel oil (HFO), this may result in lowering levies by about € 10 – 15k per annum when operating in EU waters.”
In the face of the upcoming FuelEU Maritime regulations, the choices ship owners make today will define their tomorrow. Armada’s PALS not only assists in compliance but also turns regulatory challenges into opportunities. By significantly reducing energy consumption and GHG emissions, you’re not just adhering to standards—you’re setting new ones. Imagine achieving substantial savings while creating additional revenue through the sale of borrowed credits. This is more than optimization; it’s a genuine transformation of your operations.
