Compliance Strategies and What They Would Cost

7 min read

What you'll take away Compare the compliance levers, fuel choices, surplus units, remedial contributions, ZNZ rewards, and build an order-of-magnitude feel for what each would cost a conventional ship.

Once the framework's numbers are fixed, compliance stops being a policy question and becomes an optimization: for this ship, this year, what is the cheapest way to square the account? The framework offers four levers, and a sensible owner treats them as a portfolio, not a choice.

Lever one: change the fuel. Lower the attained GFI directly: biofuel blends first, since they need little or no ship modification; LNG or LPG where the tonnage already exists; ZNZ fuels as availability grows. Lever two: buy surplus units from over-compliant ships. Lever three: pay: acquire remedial units at USD 100 (Tier 1) or USD 380 (Tier 2) per tCO2eq. Lever four: over-comply: run ZNZ fuel, collect Fund rewards, and sell the surplus units everyone else needs.

The tier prices discipline the whole portfolio. No abatement measure that costs more per tonne of CO2eq avoided than the tier it displaces is worth buying, because paying is always available at that price. USD 100 and USD 380 are not just penalties; they are the framework's published marginal price of carbon, and every lever gets measured against them.

An order-of-magnitude feel

Take the conventional fuel-oil ship from lesson 3 into 2028, attained GFI roughly at the 93.3 reference. Her Tier 2 band runs from 93.3 down to the 89.6 base target; her Tier 1 band from 89.6 down to the 77.4 direct compliance target. Work it per tonne of fuel, about 40,200 MJ in a tonne of fuel oil. The Tier 2 band is 3.7 g/MJ wide: about 150 kgCO2eq per tonne of fuel, costing roughly USD 57 at the 380 price. The Tier 1 band is 12.2 g/MJ wide: about 490 kgCO2eq, roughly USD 49 at the 100 price. Call it on the order of USD 105 per tonne of fuel in the first compliance year: a real number on a bunker bill, not a rounding error, but not yet a fleet-redefining one. The sting is the trajectory: both ladders descend every year, the bands widen, and the same arithmetic run in the mid-2030s produces multiples of that figure. Bureau Veritas publishes worked scenarios along these lines for tanker, container and LNG-carrier cases (BV Net-Zero Framework hub).

One tonne of fuel oil, 2028 compliance year, attained GFI ≈ 93.3 3.7 g/MJ · ≈150 kgCO2eq 12.2 g/MJ · ≈490 kgCO2eq Tier 2 · USD 57 Tier 1 · USD 49 ≈ USD 105 per tonne of fuel oil burned 0 25 50 75 100 USD Both ladders descend every year, so both bands widen and the same arithmetic grows.
The first compliance year for a conventional ship, worked per tonne of fuel: a narrow band at the painful price and a wide band at the moderate one come to roughly the same money. That is the design's early signal: start moving, rather than stop trading.

ClassNK's cost simulation of the mid-term measures reaches the conclusion the arithmetic hints at: in the early years, paying contributions or blending modest biofuel fractions is often the cheaper route for a conventional ship, but the crossover point, where serious fuel switching beats paying, moves steadily earlier as the ladders descend (ClassNK Technical Journal). The corollary for LNG tonnage is sobering: a well-to-wake intensity in the seventies buys comfortable margins in 2028 and a shrinking one every year after, because the ladder moves and the fuel does not.

Two regimes on one voyage

Ships trading to Europe already run this playbook. FuelEU Maritime is a well-to-wake GHG intensity standard with pooling flexibility, structurally a sibling of the framework, and it prices non-compliance steeply. Lloyd's Register's comparison models a hypothetical ship's penalty exposure under both regimes out to 2050 and tabulates the design differences (LR Horizons). Two concept-level takeaways survive any modelling detail. First, the regimes would stack: nothing in the approved text turns FuelEU off, so a ship on EU trades keeps two books of account over the same fuel. Second, a compliance capability built for one, GFI accounting, blend management, pooling or unit trading, supplier certification, is most of the capability needed for the other. Our Maritime Regulations, Explained course covers FuelEU itself.

The discipline to build now, while adoption is pending: a per-ship GFI projection against both ladders, refreshed yearly; a marginal cost per tCO2eq for each lever, compared honestly against the tier prices; and the habit of treating the compliance year, not the ship's life, as the decision unit. Owners who ran that loop for FuelEU found the first year cheap and the fifth expensive. The framework, if adopted, is built to the same curve.

Check yourself

1. What role do the remedial unit prices play in a compliance strategy?
2. In the early years, why might a conventional-fuelled ship pay remedial contributions rather than switch fuel?
3. A ship that beats the direct compliance target can monetize the margin how?
4. How would the Net-Zero Framework and FuelEU Maritime relate for a ship trading to Europe?
5. Why would an LNG-fuelled ship's early compliance advantage erode over time?
6. Which of these are levers a ship could actually use against a GFI deficit?

Select all that apply.

7. Compliance choices are one-off: the strategy a ship picks for 2028 stays locked in until 2035.
8. A ship ends a year with a Tier 1 deficit of 2,000 tCO2eq and no surplus units. At USD 100 per tCO2eq, what would remedying it cost?
USD