• Over 90% of ships met their FuelEU obligations through the pooling flexibility mechanism in 2025, with surplus prices stable throughout the year.

• Biodiesel represented 68% of renewable and low-carbon fuel used for compliance, driven by availability as a drop-in blend and an abatement cost well below the FuelEU penalty.

• The European Commission has reaffirmed FuelEU's targets and committed to supporting sustainable fuel production, a policy signal that builds confidence in the market.

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Documents of compliance for 2025 – the first compliance year for the FuelEU Maritime – have just been issued. For the shipping industry, understanding how the FuelEU is working can support strategic decision-making. For IMO Member States, what happened in the first year of FuelEU can provide valuable insights as they continue to work towards a global GHG regulation for shipping.

Data from a forthcoming European Commission report shows that over 90% of ships used pooling to meet their FuelEU obligations in 2025: by far the leading flexibility mechanism. Pooling allows ships to trade surplus compliance with other ships. Despite complexity around responsibility and the need for contracts to transfer commercial benefits between parties in many cases, this strong share for pooling shows that buyers were able to find sellers and finalize transactions before the April 2026 deadline.

The same dataset also showed less than 2% of ships using borrowing, which allows companies to defer a compliance deficit to the following year at a 10% surcharge. This low uptake likely reflected the impact of the surcharge as well as the availability of pooling.

The remaining 7% of ships made no flexibility mechanism request. Of these, roughly half met the target directly using LNG or low-carbon energy sources, and the other half paid the FuelEU penalty. The so-called penalty is in fact a flexibility mechanism that allows companies to pay to comply – similar to the Remedial Unit in the IMO Net-Zero Framework. Low uptake of this compliance option likely reflects the high price, set at 2,400 EUR per tonne of VLSFOeq (tVLSFOeq) deficit. This price is roughly equivalent to an abatement cost of 640 EUR per tonne CO2 equivalent (tCO2eq) for VLSFO, assuming the heavy fuel oil pathway in the FuelEU Annex II.

Figure 1: The figure shows the share of ships that used pooling and borrowing. The “no request” group includes ships that met the compliance target without pooling over-compliance and those that paid the FuelEU penalty.

* Breakdown of flexibility mechanisms chosen by ships from a forthcoming report that will be publicly available here.

Unlike the EU ETS, where standardized allowances are traded on regulated exchanges and surrendered through the Union Registry, FuelEU compliance units are exchanged through pools of ships, established for a full year. These pooling arrangements are made either directly within fleets and between companies or through third-party commercial platforms.

The number of third-party FuelEU service platforms has grown since 2024 – to at least 16 that we are aware of. These include strategy consultants, pure pooling brokers, and full-service platforms that combine brokering, strategic, legal, and marketplace functions. In addition, some shipowners and operators generate surplus through alternative fuel use in their own fleets and market these pools through public platforms.

The contractual framework is developing alongside the commercial one. BIMCO has published a series of contractual clauses to support the allocation of responsibility between shipowners and charterers, including a Biofuels Clause for Time Charter Parties. As is often the case in shipping, the question of who ultimately captures the benefits of surplus is not fully resolved and will continue to require attention.

To illustrate pooling compliance prices, we draw on publicly available data from OceanScore. As this reflects a single data source, it may not capture the full range of traded prices across the market, which occur across multiple platforms and often take place bilaterally or within a company's own fleet.

Data shows prices trading in a relatively narrow band throughout 2025 (Figure 2), averaging around 208 EUR/tCO2eq on the OceanScore index. This stability reflects a market that matured quickly with buyers able to find sellers, and prices remaining well below the 640 EUR/tCO₂eq penalty for VLSFO.

Figure 2: FuelEU surplus market average trade prices from the OceanScore platform, showing quarterly averages and min/max ranges. Prices remained stable around 200 EUR/tCO2eq through 2025 before falling to all-time lows of 170 EUR/tCO2eq in May 2026, following the April compliance deadline. Source: OceanScore OPX (volume-adjusted, Q1–Q4 2025, excluding May 2025).

After the pooling deadline on 30 April 2026, prices fell to an all-time low in May 2026, with OceanScore reporting around 170 EUR. The passage of the April compliance deadline likely reduced immediate pressure on buyers. In addition, the closure of the Strait of Hormuz drove higher conventional bunker fuel prices, while biodiesel was less affected.

Analysis by Ship & Bunker in May 2026 found that, with compliance costs factored in, Rotterdam B30 blends could be purchased at a 125 USD/mt discount to VLSFO for intra-EU voyages, briefly making direct blending more attractive than purchasing pooling surplus. Arbitrage opportunities rarely last long, and biofuel premiums have since risen back to pre-Hormuz levels.

To understand the fuels ships used for FuelEU compliance in 2025, we start with the required emissions reductions, or abatement. The 2025-2029 target of 89.34 gCO2eq/MJ represents a 2% reduction from the FuelEU reference value of 91.16 gCO2eq/MJ, or a 2.7% reduction relative to VLSFO, which has an emission factor of 91.74 gCO2eq/MJ. Applying the FuelEU target to 2025 EU MRV data provides an estimated 2025 required reduction of 3.22 million tCO2eq relative to an all-VLSFO fleet.

As data on fuel consumption in 2025 is not yet available, we use 2024 data from a report by the European Commission as a proxy. The data shows that in 2024, LNG accounted for 7.5% of fuel consumption for the fleet sailing to/from EEA ports. Applying a distribution of high- and low-pressure engines from 2026 Clarksons data (see also box below), this suggests that LNG could have supplied roughly one-third of the 3.22 million tCO2eq of required reductions, leaving roughly 2 million tCO2eq to be covered by other means (Figure 3, left side).

Given that over 90% of ships achieved compliance without paying the penalty or borrowing, most of the remaining abatement can be assumed to have been covered by renewable and low-carbon energy sources. Of course, if LNG use grew in 2025 driven by FuelEU incentives, the contribution from renewable and low-carbon sources would be lower.

Data from the European Commission's forthcoming FuelEU report shows that biodiesel accounted for over two-thirds of the renewable and low-carbon energy used for compliance in 2025 (Figure 3, right side). Most of this energy is likely from used cooking oil feedstock, as FuelEU excludes food and feed-based biofuel and ports offer used cooking oil blends that work in existing engines. Bio-LNG (also known as liquefied biomethane, LBM) represented the next-largest share under renewable and low-carbon fuels.

Figure 3

* Modeled compliance breakdown between LNG and renewable and low-carbon fuels. The LNG share is held constant from 2024: however, if FuelEU incentives increased LNG use in 2025, the renewable and low-carbon share would be correspondingly lower. The “Other” category includes onshore power supply, wind-assisted propulsion, biomethanol, e-fuel, and ethanol. Sources: Total emissions based on data from 2025 EU MRV. LNG consumption from a European Commission report and assumptions on high/low pressure engines from Clarksons. Reported shares of low-carbon fuels from a forthcoming European Commission report, which will be available here when published.

Looking at data from S&P (Figure 4), we see that dual-fuel vessels currently represent 6% (by deadweight tonnage - DWT) of the fleet in service, with dual-fuel methane at 5%. Including the orderbook through 2030, this share grows to 9% of the global fleet, with dual-fuel methane representing 8% of the fleet. This represents a strong move toward methane capability that can significantly expand both the LNG and bio-LNG compliance in the FuelEU market as these vessels enter service.

Methanol and ammonia make up a smaller share of the orderbook, with methanol vessels reaching 1% of fleet DWT and ammonia 0.13% of fleet DWT in 2030. While these fuels have a smaller share, they can achieve low emissions, allowing them to take part in the FuelEU compliance market.

Figure 4: Dual-fuel vessels capable of operating on ammonia, methanol, or methane as a share of the total fleet by deadweight tonnage (DWT). Only fully capable vessels are included; "alternative fuel ready" vessels designed to accommodate future conversion but not yet fully equipped are excluded. The shaded area projects fleet growth based on the current orderbook. Source: S&P Global Market Intelligence, May 2026.

In its November 2025 Sustainable Transport Investment Plan (STIP), the European Commission writes that the plan "sends a clear signal to investors that its targets are stable, and that it will support the sector throughout the transition". This strong sign of commitment to the FuelEU in the coming years is complemented by a stated commitment in the 2026 EU Maritime Industrial Strategy to consider the use of ETS revenue to support “the uptake of sustainable fuels and clean propulsion technologies.”

The Commission also plans to align monitoring, reporting and verification across EU ETS and FuelEU to reduce administrative burden. For example, the 2026 EU ETS review is expected to assess an extension of the system to smaller ships and currently excluded segments such as offshore vessels. A planned FuelEU revision in 2027 could also expand the scope of this regulation.

FuelEU is already set to expand as it enters into force in EEA members Norway and Iceland. Norway has stated that it expects entry in late 2026, while Iceland awaits parliamentary approval with no confirmed timeline.

• In 2025, the Center led the production of two reports, on Fuel Certification and Calculation Methodologies, to support implementation of the FuelEU. Both are published on the European Commission’s site for FuelEU along with other helpful information.

• Want to understand the math and concepts behind abatement price? Check out our concept note for calculating compliance cost under the IMO Net-Zero Framework.