Fuel Switch Snapshot: Costlier EU ETS compliance drives bunker prices higher

EU ETS changes from 1 January have raised estimated costs for EU–EU voyages by $103–106/mt for conventional fuels and $95–169/mt for LNG.

All bunker prices described in the text below have been adjusted for calorific contents to make them VLSFO-equivalent. They have estimated EU-EU voyage compliance costs included for Rotterdam, and nonEU-EU compliance costs included for Singapore. These account for EU ETS costs and FuelEU Maritime penalties, and the average price of compliance surpluses we have picked up from the FuelEU pooling market from the past week. 

Rotterdam’s conventional fuel prices have gained by $114–119/mt and its LNG prices have risen by $107–178/mt in the past week. Singapore’s conventional fuel prices have increased by $53–55/mt and its LNG prices have moved up by $30–65/mt over the past week.

A major chunk of the price rise has come from higher estimated EU ETS costs included in bunker fuel prices.

The EU ETS has reached its final phase of “phasing in” this year, which means a vessel sailing between two EU ports now has to pay for 100% of its emissions, up from the 70% coverage in 2025. A vessel sailing between EU and nonEU ports has to cover 50% of its emissions, up from 35%.

The EU ETS has also started penalising methane and nitrous oxide emissions from this year. This is particularly costly for LNG-capable vessels with Otto medium speed (Otto MS) engines that have high methane slip default factors.

B100 and liquefied biomethane (LBM) still have zero-carbon factors in the EU ETS. What this means is that carbon dioxide (CO2) emissions are exempted, while methane and nitrous oxide emissions have started to count towards the fuels' greenhouse gas (GHG) scores in the EU ETS.

These changes in 2026 have increased the estimated EU ETS costs on EU–EU voyages by $103/mt for HSFO and VLSFO, and by $106/mt for LSMGO.

For dual-fuel vessels, the estimated cost of complying with the EU ETS by bunkering LNG has increased by about $95–169/mt, depending on engine type and methane slip.

Estimated EU ETS costs on nonEU–EU voyages have risen by $51–53/mt for vessels running on conventional fuels and by $47–85/mt for vessels using LNG.

Liquid fuels

Rotterdam’s B100 price has jumped $136/mt higher in the past week, driven partly by higher EU ETS-linked compliance costs, but mostly by the transition from the Dutch HBE system to a new ERE system from 1 January.

As mentioned, B100 counts as zero-carbon under the EU ETS, but the inclusion of methane and nitrous oxide emissions adds an estimated $5/mt to EU-EU voyages and $3/mt to nonEU-EU voyages.

Dutch ERE tickets for advanced B100 sold in the bunker fuel market are called ZRE As and are currently valued at €150/mtCO2e, which translates to $514/mtFuel for B100 made from advanced feedstocks like palm oil methyl ester (POME). This $514/mt is about $111/mt less than the HBE ticket value for the same biofuel and has put heavy upward pressure on Rotterdam's B100 bunker price.

While B100 has become slightly less attractive, but it remains at considerable discounts to conventional fuels when we include total costs for bunkering and consuming it between EU ports. Its discount to VLSFO in Rotterdam has narrowed by $21/mt to $226/mt, and its discount to LSMGO has narrowed by $18/mt to $383/mt in the past week.

Singapore’s B100 price has increased by $8/mt over the past week. B100 is now priced at $257–391/mt premiums over VLSFO and LSMGO in Singapore, down by $46–47/mt since the last week of December.

Liquid gases

The estimated EU ETS costs of bunkering 0 gCO2e/MJ LBM in Rotterdam and consuming it between two EU ports have increased by $9/mt for dual-fuel vessels with diesel slow speed (diesel SS) engines with 0.2% methane slip, and by a significant $92/mt for vessels with Otto MS engines with 3.1% methane slip.

This has raised the effective cost of bunkering LBM in Rotterdam to about $99–343/mt, from $53–218/mt seen last week.

But even with the inclusion of methane emissions and resultant higher costs of complying with EU ETS, LBM remains the cheapest fuel option for EU–EU voyages.

Rotterdam’s LBM is now at $629–870/mt discounts to LSMGO, and $550–558/mt discounts to LNG.

In Singapore, LNG is about $40/mt costlier than VLSFO for vessels with Otto MS engines and about $78/mt cheaper than VLSFO for vessels with diesel SS engines. It is priced at $94-212/mt discounts to LSMGO, depending on the vessel’s engine type.

By Konica Bhatt

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