UECC's Early Bio-LNG Move Drives FuelEU Compliance Surplus

UECC says early move into bio-LNG has enabled the car carrier to beat FuelEU targets. Image Credit: UECC

Norwegian shipping firm United European Car Carriers (UECC) is on track to generate a significant compliance surplus under the FuelEU Maritime regulation in 2025.

This progress is driven by its increasing use of alternative marine fuels such as biofuels, bio-LNG and biomethane.

The company projects fleet-wide carbon intensity of 57 gCO2e/MJ this year, well below the FuelEU threshold of 89.3 gCO2e/MJ, UECC said in a statement on its website on Monday.

This is even lower than the 77.9 gCO2e/MJ threshold from 2035.

This puts UECC well ahead of regulatory targets and in a position to bank excess compliance under FuelEU's pooling mechanism - effectively creating a tradable surplus that can be monetised or used to eliminate FuelEU surcharges for its clients.

"The low carbon intensity of our fleet means all of our vessels are expected to gain a C rating or above with the IMO's Carbon Intensity Indicator (CII)," Masanori Nagashima, senior manager at UECC, said in the statement.

Nagashima asserts bio-LNG as extremely beneficial in cutting emissions and meeting FuelEU compliance, but noted increasing competition in the market to secure the fuel.

"While this means there is increasing competition for the fuel in shipping, our first-mover role in procuring bioLNG puts us in an advantageous position to secure future volumes of the fuel through building relationships with suppliers," Nagashima noted.

Alternative fuels accounted for nearly 42% of UECC's 16-vessel fuel mix in 2024, up from 34% in 2023.

Bio-LNG, a cleaner drop-in fuel for dual-fuel LNG ships, is central to this shift.

UECC was able to cut 107,000 tonnes of CO2 in 2024, almost double from 63,000 tonnes in 2023.

The firm is on track to reduce CO2 emissions by 155,000 tonnes.