Focus in Maritime Decarbonization: The Current Regulations and Challenges at a Glance
Maritime decarbonization regulations for 2025 are forcing the global shipping industry to adapt quickly, ushering in new fuel requirements, carbon reporting frameworks, and compliance challenges.
In the following article, VPS highlights the increasing complexity that ship owners and operators face regarding maritime decarbonization, explaining the current legislative requirements and their challenges.
From the initial implementation of the International Maritime Organisation (IMO) MARPOL Annex VI, which came into force on 19 May 2005, shipping has witnessed numerous levels of legislation introduced with which vessels must comply.
Decarbonisation targets are driven mainly by the IMO and its initial strategy for reducing the carbon intensity of international shipping (to reduce CO2 emissions across international shipping by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008) and that total annual GHG emissions from international shipping should be reduced by at least 50% by 2050 compared to 2008.
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In 2023, IMO introduced a revision to its decarbonization strategy, stating that the carbon intensity of ships needs to decline through further improvement of the energy efficiency of new ships. Also, there is a need to strengthen the energy efficiency design requirements for ships, leading to a reduction in the carbon intensity of vessels and supporting the reduction of CO2 emissions by at least 40% by 2030 compared to 2008. Also, the uptake of zero or near-zero GHG emission technologies, fuels, and/or energy sources to increase and represent at least 5%, striving for 10%, of the energy used by international shipping by 2030 and GHG emissions from international shipping to reach net zero by or around 2050.
This strategy revision introduced Indicative Checkpoints to monitor the progress of reducing the total annual GHG emissions from international shipping by at least 20%, striving for 30% by 2030, compared to 2008, and by at least 70%, striving for 80%, by 2040, compared to 2008.
The IMO GHG strategy is supported by:
#1 CII – Carbon Intensity Index, which determines the annual reduction factor needed to continuously improve a ship’s operational carbon intensity within a specific rating level. The ratings go from an inferior performance level, E, to the significant superior level, A. Measuring the CO₂ emitted per cargo-carrying capacity per nautical mile, CII incorporates speed optimization, biofouling management, and alternative fuel usage.
It becomes more difficult for a ship to improve its CII rating each year, but the best-performing vessels are likely to trade at a premium.
Since 2024, the CII must be calculated and reported to the Data Collection System Verifier along with the previous year’s aggregated DCS data. This must include any correction factors or voyage adjustments. The DCS and CII submission deadline is no later than 31 March each year.
The attained annual operational CII and the environmental rating (A to E) are noted on the DCS Statement of Compliance (SoC), which must be kept on board for five years.
If the ship’s energy efficiency management plan (SEEMP) Part III has a D rating for three consecutive years or one E rating, it must be updated with a corrective action plan and verified before the SoC can be issued. The corrective action plan should analyze why the required CII was not achieved and include a revised implementation plan.
It is worth noting at this point that the use of low-carbon fuels such as LNG, bio-LNG, Biofuels, and Methanol offers immediate emissions reductions, which will significantly assist vessels in improving their CII ratings and complying with tightening regulations.
#2 EEDI – Energy Efficiency Design Ship Index relates to new vessels built after 2013. This index sets a baseline for CO₂ emissions based on ship type and size. It is calculated as the amount of CO₂ emitted per ton of cargo transported per nautical mile, emphasizing fuel efficiency and environmental performance. Considerations are hull design, waste heat recovery, and reductions in electricity consumption.
#3 EEXI – Energy Efficiency The existing ship index was introduced on 1st January 2023 for vessels over 400 GT. EEXI indicates a ship’s energy efficiency compared to a baseline. The attained EEXI is then compared to a required Energy Efficiency Existing Ship Index based on an applicable reduction factor expressed as a percentage relative to the Energy Efficiency Design Index (EEDI) baseline. EEXI considers power limitations, wind assistance, and propeller optimization. Ships struggling with EEXI are likely to face difficulties with CII compliance.
The EU’s GHG strategy is driven mainly through
#1 Fit for 55 – Which includes many decarbonization components:
#2 EU ETS – The EU Emissions Trading System is a cap-and-trade mechanism designed to reduce greenhouse gas (GHG) emissions. EU ETS is a carbon tax/trading scheme. Under this system, companies must purchase permits (EU Allowances, EUAs) that grant them the right to emit a specified amount of GHGs. One EUA allows emission of 1mt of CO2-equivalent, which needs to be surrendered to a vessel’s administering authority to cover emissions from voyages to and from, plus between European Ports and port stays.
For 2024 – 2026, the EU ETS is a tank-to-wake-based regulation covering 100% of intra-European routes and 50% of emissions from extra-European routes to and from EU calls in neighboring non-EU countries. Over the same period, emissions from maritime transportation carried out by ships of 5,000 gross tons and above will be included, but from 2027, this will be lowered to 400 gross tons and above.
The EU ETS will be extended to cover methane (CH₄) and nitrous oxides (N₂O), not only CO₂. However, until 2026, CO2 is the only greenhouse gas to which the obligations apply.
The VPS Emsys system can measure NOx (NO + NO2), CO2, SO2, CO, CH4, H20, NH3, and O2 via its unique and innovative cascade laser detection system to provide accurate real-time emissions monitoring. Data is transferred ship-to-shore through onboard IAS systems or direct network connection, also known as Emsys ShorLink.
Accurate emissions data is critical under CII, EU ETS, and FuelEU Maritime regulations. The VPS Emsys system efficiently streamlines a vessel’s reporting processes and minimizes the risk of costly errors. Vessels will gain full transparency into their emissions profile, so no guesswork is required, and actionable insights for operational adjustments are achieved.
The EU ETS implementation is occurring in phases. Shipping companies will be required to surrender allowances for their verified annual emissions as follows:
- 2024: 40%.
- 2025: 70%.
- 2026: 100%
#3 Fuel EU Maritime which became effective on 1st January 2025, is an EU initiative aimed at promoting the adoption of sustainable fuels and alternative energy sources, with a progressively tightening cap on the greenhouse gas intensity of fuels used, hence reducing greenhouse gas (GHG) emissions from ships operating within EU ports and waters. It limits the GHG intensity of energy ships’ use of >5,000 GT transporting cargo or passengers for commercial purposes in the EU/EEA.
The requirements start with a 2% reduction in GHG intensity from 2025 to 2029, relative to the average GHG intensity in 2020. This reduction target then increases to 6% from 2030 to 2034 and accelerates from 2035 to achieve an 80% reduction by 2050. Shipowners are presented with several flexibility mechanisms to achieve compliance, including banking, borrowing, and pooling, and penalty payments.
To help comply with Fuel EU Maritime, vessel operators have a few options:
- Borrowing – Compliance deficits can borrow from the next reporting period, but this is not applicable for more than two consecutive periods. A 10% surcharge is added to the borrowed amount, which is not applicable if the amount exceeds 2% of the GHG intensity limit.
- Banking – A compliance surplus can be credited to the balance of the next period, but this isn’t available after the FuelEU compliance document has been issued.
- Pooling – This allows ships to merge their GHG and RFNBO compliance balances to meet requirements. A separate pool exists for GHG and Renewable Fuel of Non-Biological Origin (RFNBO).
The Alternative Fuels Infrastructure Regulation (AFIR) further supports the above EU strategies, which require EU ports to develop shore power and introduce bunkering infrastructure for low-to-zero fuels.
Staying compliant isn’t just about meeting a set of numbers; it involves ongoing monitoring, reporting, and strategic planning to ensure vessels remain efficient. Traditional approaches to compliance have grown more complex and data-intensive, requiring reliable measurements of fuel quality, emissions tracking, and transparent documentation to satisfy authorities and demonstrate operational excellence.
As part of the EU’s “Fit for 55,” the Renewable Energy Directive (RED) encourages using low-to-zero-carbon fuels. Regarding biofuels, it is key that fuel suppliers have their products certified by the International Sustainability and Carbon Certification (ISCC).
To monitor compliance performance, vessels must measure the following within a specific timeline.:
As the push for maritime decarbonization continues—alongside tightening carbon-reduction targets and broader interest in alternative fuels—adaptable testing and digital solutions, advanced measurement capabilities, and expert guidance are becoming more essential.
VPS concludes.
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