In this article, we dive into the impact of the FuelEU and ETS legislations on the maritime sector. Together with several industry players, we look at how these regulations affect their operations and what this means for the future. In the previous article we explained the two legislations, but now we look at the practice: what opportunities and risks are observed, and how are companies preparing for what is to come? This article offers a clear overview of the key insights.   

Changing dynamics within the supply chain  

Freight forwarders see the impact of the two legislations mainly as an administrative challenge. The costs arising from ETS-allowances and FuelEU regulations are normally passed on to the customer, so these companies’ primary focus is on compliance. Nevertheless, freight forwarders are noticing a growing demand for sustainable logistics solutions, which could potentially give them a strategic position. This change toward more sustainable transportation stems from ambitions of their customers, who are increasingly striving for net-zero targets. This creates both a challenge and an opportunity for forwarders to provide transparency in their supply chains and differentiate themselves through sustainable initiatives.  

The shipping industry: making profits versus sustainability  

For shipping companies, the situation is more complex. Within the inland shipping industry, there is a strong focus on cost efficiency, with sustainable initiatives being seen, where possible, as a means of cutting costs rather than a step toward environmentally friendly change. While most shipping companies are committed to complying with regulations, the feasibility of long-term goals, such as the required 80% reduction in emissions by 2050, is being questioned. Technologies now being explored, such as battery-powered ships for shorter distances, offer a perspective for the future. However, deployment of this sustainable technology for long-haul shipping is proving more challenging because of the limited capabilities of current battery technology.  

Alternative fuels and cooperation as keys to success  

 Shipping companies recognize that the transition to alternative fuels such as Liquified Natural Gas (LNG), methanol and biofuels is essential for the future of the industry. In the short term, however, the impact of the two legislations is perceived to be relatively minor, as the price of ETS-allowances is currently low and FuelEU’s targets are still on a long timeline. For example, ships under 5.000 gross tonnage are still exempt from the regulations and the reduction target for 2025 is set at only 2%. Yet investments are already being made in sustainability technologies, particularly in improving the energy efficiency of existing ships and exploring alternative fuels. The main challenge remains the limited availability of renewable fuels, which drives up costs and delays implementation.  

Cooperation among shipping groups offers benefits, such as access to pooling mechanisms that help meet FuelEU regulatory obligations. At the same time, the industry faces barriers to cooperation with other stakeholders, such as joint investment in biofuel infrastructure. Legal and operational obstacles make it difficult to achieve joint initiatives, although there is broad support for increased cooperation, especially in large ports such as Rotterdam. Without a unified approach and standardized infrastructure – think access to shore power, for example – the long-term transition to renewable fuels remains a challenge.  

Changing relationships between ship owners and charterers  

One notable effect of the new legislations is the changing dynamics between ship owners and charterers. Traditionally, ship owners were responsible for the operational side of shipping, while charterers leased the ships for transportation. The introduction of ETS and FuelEU has created a more complex relationship, where charterers can also be held responsible for meeting sustainability goals – for example, by contributing to the cost of alternative fuels or vessel modifications. This can lead to tensions, especially if sustainability costs continue to rise and mutual agreements are unclear. 

Technological innovations as a bridge to sustainability  

As discussed earlier, technological innovations play a key role in the sustainability process of the maritime sector, particularly in complying with increasingly stringent legislation. A concrete example of such technology is Value Maritime’s Filtree-system, which uses scrubbers to reduce harmful emissions. This system allows ship owners to meet emission requirements cost-effectively. While these fuels may initially lead to higher emissions of pollutants such as sulfur, the Filtree-system effectively reduces these.   

Value Maritime sees the combination of scrubbers and carbon capture as an important technology for making shipping more sustainable. However, the integration of carbon capture is complex: the processing of captured CO₂ is done “outside” the maritime sector, while the IMO (International Maritime Organization) focuses on the emissions from ships themselves, and not the processing of CO₂ on land. This creates a challenge because current regulations do not adequately take into account this cross-chain approach. 

 To effectively integrate these technologies into the value chain, cooperation with other sectors is essential. Initiatives such as “green corridors” and joint CO₂ processing networks can play an important role here. These could provide a standardized and scalable approach to CO₂ storage and processing. Setting up collaborations between technology companies, ports and ship owners is crucial for the successful implementation of carbon capture and other sustainability technologies.  

What are the challenges and opportunities?  

Bebeka, a cooperative that jointly procures fuels worldwide and advises its members on sustainability and regulatory issues, also sees significant challenges and opportunities. Members are currently still searching for appropriate solutions in the complexity of regulations and need knowledge sharing. There is no universal approach; trade-offs are highly dependent on cost, operational feasibility, company profile and specific sailing area. This makes decision-making and implementation particularly complex. In addition, high compliance costs and limited opportunities to pass them on up the chain cause a delayed transition. This is partly because shipping often remains out of sight of consumers and therefore feels less urgency to contribute to it.   

Strategic advantage is possible for companies that position their fleets smartly and invest timely in new technologies or alternative fuels. For example, ships in the Mediterranean are more often opting for technologies such as the aforementioned scrubbers, due to stricter regulations on sulfur emissions within the SECA (Sulphur Emission Control Area). Within the palette of alternative fuels, Bebeka sees particular potential in methanol, although the transition is still early. LNG is considered a temporary solution, while e-fuels face challenges around production, cost and efficiency. The limited availability of infrastructure and the need to train personnel are major bottlenecks in this regard.  

Bebeka emphasizes that while regulations are guiding and contribute to awareness, realistic goals and the availability of alternatives are essential for effective sustainability. The transition requires cooperation, innovation and a long-term vision within the sector. 

 Renewable fuel producers also stress that the production capacity of fuels such as HVO (Hydrotreated Vegetable Oil) is not yet close to replacing current fossil diesel volumes. The market is growing rapidly, but raw materials – such as used cooking oil and waste fats – are finite. Innovations such as winter cultivation on fallow land are being explored to expand capacity without disrupting food production. Still, biofuels remain more expensive than fossil varieties, and government support remains necessary. It is clear that the future does not rest on one solution, but on a mix of technologies and fuels. In doing so, it is important to also keep in mind broader sustainability issues such as biodiversity within the supply chain.  

Conclusion: a challenging but promising transition  

The transition to a more sustainable maritime sector is a complex process, in which the balance between cost, technology and collaboration is crucial. The legislations around FuelEU and ETS may not have the devastating effects in the short term that some companies fear, but the long-term impact could be significant. The availability and cost of alternative fuels remains the major bottleneck, while the need for collaboration between different sectors and stakeholders is increasing. Companies that invest in sustainability technologies now and are willing to experiment with new fuels and partnerships can position themselves for future success. The key to success lies in finding a balance between cost control, technological innovation and collaboration to make the maritime sector sustainable in the long term.