For those of you who aren’t familiar with the topic: Since the beginning of this year, seagoing ships have had to either use less climate damaging bunker when calling at European ports or pay a fine.

The formula for calculating the amount of the penalties is set out in EU Regulation 2023/1805. The EU aims to become largely climate neutral by 2055 (check out the “Fit for 55” program).

Shipping is always about big numbers, including large quantities of fuel. Here is an admittedly simple calculation example (the regulations still contain some special features and exceptions): Assume a ship sails within Europe and burns 500 mt of marine gas oil (MGO) in one year. Starting this year, an annual fine of approximately €19,000 will be due.

From 2030, just under five years from now, the bill will increase to €70,000 per year.
From 2035 onward, it will cost the shipping company €176,000 per year.
And from 2050 onward, you’ll be paying just under €1 million per year.

For comparison: One ton of MGO currently costs approximately €630, meaning the fuel costs for 500 mt of MGO are approximately €315,000.

It’s no surprise, then, that demand for biofuels in shipping is expected to increase significantly in the coming years, new wind powered systems are being developed, and e-fuels are not off the table. Even nuclear propulsion is back on the agenda.

So, yes. The world is changing. And we help our customers to cope with this.

You can find the calculation in detail on our website: Fuel EU Penalty example calculation – Fleettracker. Enjoy!