FuelEU Maritime

Starting in 2025, the shipping industry will be subject to the FuelEU Maritime regulation, designed to reduce greenhouse gas (GHG) emissions by encouraging the use of renewable and low-carbon fuels. Vessels that exceed the carbon intensity targets for their fuel mix will face compliance deficits. Those who adopt alternative fuels will generate a compliance surplus.

This creates a unique trading opportunity for vessels using low-carbon fuels.

 

The Compliance Challenge

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Under the new regulation, the entity responsible for compliance with the FuelEU Maritime Regulation is the same entity responsible for the International Safety Management Code (ISM Company), often the DOC-holder. However, it's in the interest of all stakeholders that those selecting and paying for the fuel are also responsible for the surpluses or deficits resulting from that fuel. Without this alignment, there will be little incentive for the industry to transition toward cleaner fuels.

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So, how can those investing in low-carbon fuels "receive the surplus" and convert it into a tangible benefit? How can FuelEU Maritime obligations be managed efficiently and without disruption to existing commercial processes?

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Hecla’s Solution

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Hecla has launched the first digital exchange designed to facilitate the trading of compliance balances. By securitizing a verified emissions statement and storing it on a secure, immutable ledger, Hecla enables users to create a tradeable asset. These assets represent the right to an equivalent compliance balance at the end of the compliance period, allowing businesses to monetize their surplus and drive the adoption of alternative fuels in the maritime industry.

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