Argus launches first FuelEU Maritime pooling spot price and bio-LNG abatement prices
The new market has been developed by market participants to meet obligations under the FuelEU Maritime regulation, which is in its second compliance year and requires ships of above 5,000 gross tonnage operating in EU waters to progressively cut greenhouse gas emissions. The current requirement is for a 2pc reduction in emissions compared with 2020 levels, increasing by stages to 80pc by 2050. Shipowners can meet this requirement by substituting fossil fuels with low-carbon fuels such as biodiesel, LNG and bio-LNG.
Alternatively, shipowners can meet their compliance needs by buying surplus compliance from other shipowners under the FuelEU Maritime’s pooling flexibility mechanism. The mechanism allows shipowners to aggregate compliance across their fleets to meet the emissions reduction target. Any surplus compliance generated by emissions reductions in excess of the target can then be sold to shipowners who have a deficit.
The new Argus prices provide independent benchmarks for the cost of generating compliance and the price for trading it under FuelEU’s pooling mechanism. This comparison enables shipowners and charterers to optimise compliance decisions, reduce costs and monetise surplus positions.
Category: Fuels
