UPDATE: Will not charge FuelEU Maritime surcharges - UECC

Norwegian shipping company United European Car Carriers (UECC) announced that it will not pass on FuelEU Maritime compliance costs to its customers.

PHOTO: UECC's LNG-capable car carrier, Auto Advance. United European Car Carriers

**This story has been updated to include comments from UECC's Daniel Gent.**

The company attributed this decision to its compliance surplus under the FuelEU Maritime framework, which is generated by its use of biofuels and liquid biomethane (LBM) across its fleet.

“We are running all vessels in our fleet with some kind of alternative fuel, be that biomethane or biofuel (B30 or B100),” UECC sustainability manager Daniel Gent told ENGINE.

Instead, the shipowner shared plans to sell its compliance surplus to third-party vessels as part of the FuelEU Maritime regulation’s pooling mechanism, but the exact number of third-party vessels that could benefit from UECC’s compliance surplus “depends on the deficit of the receiving vessels,” Gent noted.

This pooling value could help offset additional costs incurred from bunkering biofuels and LBM, which can cost significantly more than bunkering VLSFO or LNG.

For example, the ENGINE Rotterdam VLSFO benchmark was priced at $550/mt last Friday, while the B100 biofuel benchmark was priced at $1,172/mt in Rotterdam. On a VLSFO-equivalent basis, this equates to $1,219/mt.

LBM costs about $550/mt on top of the $835/mt delivered LNG was priced at in Rotterdam last Friday. That LBM premium includes a Dutch HBE rebate, without which the LBM price would have been much higher, a bunker trader told ENGINE.

Gent said UECC’s fuel purchasing plan will make it overcompliant with FuelEU Maritime in many years to come. The regulation was phased in with a 2% greenhouse gas (GHG) intensity reduction target from this year, which will become stricter from 2030 and every five years thereafter towards 2050.

“UECC is firmly on track to achieve a minimum 45% reduction in carbon intensity by 2030, surpassing the IMO target, and is also set to exceed the required FuelEU Maritime (FEUM) reduction of 31% by 2040 compared to a 2020 baseline of 91.16 grams of CO2 equivalent per megajoule [gCO2e/MJ],” Gent explained.

From this year, the UECC fleet's energy mix generates a FuelEU compliance surplus by having a lower GHG intensity than the 89.34 gCO2e/MJ FuelEU target.

Gent does not say exactly how low he expects UECC's average GHG intensity to be this year, but that its current energy mix will continue to generate a surplus into the 2030s.

The company struck a deal last year with Dutch LNG and LBM supplier Titan, expanding an existing supply agreement for mass-balanced LBM through most of 2025. It also secured an LBM stem from LBM supplier Naturgy in Spain, marking “the first physical molecule delivery of the fuel – instead of mass-balanced.” This delivery will enable UECC to expand its regional LBM suppliers beyond Titan Clean Fuels in Zeebrugge, the company noted.

Over-the-counter markets have popped up for selling and buying FuelEU compliance surpluses. Shipping companies unwilling to put low-GHG-intensity fuels on their own EU-trading vessels for various reasons can buy the surpluses of other shipping companies with overcompliant vessels.

But Gent rules out this option for UECC.

“UECC will never be in a position of needing to buy or borrow compliance units,” he said.

By Konica Bhatt

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