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MARITIME FUEL EMISSIONS REGULATIONS – GLOSSARY
Published: 1 May 2025
This page is part of our comprehensive Maritime Fuel Regulations section written in consultation with the law firm HFW.
Administering Authority: This is the administering authority in each EU Member State, which is responsible for administering EU ETS, and FuelEU. Each compliance entity will be allocated an administering authority.
Advance Compliance Surplus: Under FuelEU, where a ship borrows from its Compliance Balance from the future Reporting Period (n+1), this borrowed Compliance Balance is the Advance Compliance Surplus and shall be added to the ship’s Compliance Balance in Verification Period (n+1).
AER Metric: Annual Efficiency Ratio is the metric under CII for assessing the GHG intensity of a ship and is based on GHG emissions per dead weight tonne mile. A different metric is used under FuelEU.
Attained CII: Under the CII Regulations, this is a ship’s actual annual recorded operational energy efficiency calculated according to the AER Metric and expressed on a gCO2/dwt.nm basis.
Attained EEXI: This is the ship’s energy efficiency and is compared to the Required EEXI to determine whether improvements are required.
BIMCO CII TC Clause: The CII Operations Clause for Time Charterparties 2022.
BIMCO CII VC Clause: The BIMCO CII clause for voyage charterparties 2023.
BIMCO EEXI Clause: The BIMCO EEXI clause for time charterparties 2021.
BIMCO ETS Clause: The Emission Trading Scheme Allowances Clause for Time Charter Parties 2022 published in respect of EU ETS.
BIMCO FuelEU Clause: The FuelEU Maritime Clause for Time Charter Parties 2024 published in respect of FuelEU.
BIMCO Shipman EU ETS Clause: The ETS Shipman Emission Trading Scheme Allowances Clause for Shipman 2023 published in respect of EU ETS..
BIMCO Shipman FuelEU Clause: The FuelEU Maritime Clause for Shipman 2024 published in respect of FuelEU.
BIMCO Surcharge: The Emission Scheme Surcharge Clause for Voyage Charter Parties Clause 2023 is one of the three BIMCO-published clauses for use in voyage charterparties in respect of EU ETS. This clause provides for payment of a cash equivalent sum to the EUAs as a surcharge on top of freight.
Cap and trade system: A form of emissions regulation which requires participants to pay for their emissions. The number of permits for participants to emit GHG are capped and are traded between participants. This increases costs of emissions and incentives low emission solutions. The EU ETS is a cap-and-trade system.
CII Rating: For the CII Regulations, this is an annual carbon intensity rating from ‘A’ (superior) to ‘E’ (inferior), which is produced by assessing Attained CII against the Required CII.
CII Regulations: These are the IMO’s Carbon Intensity Indicator (CII) and Energy Efficiency Existing Ship Index (EEXI), which were introduced through amendments to Revised MARPOL Annex VI.
Compliance Balance: Under FuelEU, this is the ship’s performance against the GHG Intensity Limit. The ship’s GHG Intensity during a calendar year is compared to the GHG Intensity Limit established by FuelEU to generate the Compliance Balance.
EU ETS Compliance Deadline: Under the EU ETS, this is the 30 September in the year following the Reporting Period and is the annual deadline for compliance entities to surrender EUAs to their Administering Authority.
Compliance Entity: The entity responsible for compliance with a given regulation. See also “shipping company” for the compliance entity for EU emissions regulations.
Deficit: Under FuelEU, where a ship’s GHG Intensity is above the GHG Intensity Limit, the ship’s Compliance Balance is negative, which is a compliance deficit.
EEA: The European Economic Area, covering the EU and Iceland, Liechtenstein and Norway.
Emissions: These are GHG emissions as regulated by an emissions regulation and may include CO2, CH4 or N2O emissions depending on the emissions regulation.
EPL: Engine power limitation. A method of complying with EEXI.
EUAs: Emissions allowances under the EU ETS, which permit the holder of the EUA to emit one tonne of CO2 equivalent.
EU ETS: The EU Emissions Trading System Directive (Directive 2003/87/EC), which is a cap-and-trade system, requiring participants to surrender EUAs meeting their verified emissions.
EU’s Fit for 55 Legislative Package: The set of regulations, directives, and legislative proposals covering different sectors and industries introduced by the EU to align EU policies with EU climate goals.
Flexibility Mechanism: Under FuelEU, this is a regulatory action that can be taken by a compliance entity (one of Banking, Borrowing or Pooling) and offers flexibility so that compliance with FuelEU is not restricted to generating a Surplus in a Reporting Period.
FuelEU: Regulation (EU) 2023/1805, this Regulation imposes two targets: one applicable from 1 January 2025 is for ships to meet an annual GHG Intensity Limit and a second, applicable from 1 January 2030, is for certain types of ship to connect to onshore power supply.
FuelEU Database: the electronic system on which FuelEU data and compliance information is inputting and recorded.
FuelEU DOC: FuelEU document of compliance which is issued to the shipping company by 30 June in the Verification Period, where their ship has generated a Surplus or a Deficit and a FuelEU Penalty has been paid for the Deficit.
FuelEU Penalty: This is a penalty imposed under FuelEU on ships which have a Deficit after 1 May in the Verification Period, which may be calculated according to a formulae provided in Annex IV.
gCO2eq/MJ: CO2 equivalent per megajoule, this is the metric for assessing GHG Intensity under FuelEU only.
GHG: Greenhouse gas.
GHG Intensity: The measurement of a ship’s GHG intensity on a grams of CO2 equivalent per megajoule (gCO2eq/MJ) basis for a calendar year under FuelEU.
GHG Intensity Limit: The limit on GHG Intensity of a vessel’s emissions, as set pursuant to FuelEU.
IEEC: International Energy Efficiency Certificate required under the CII Regulations.
ISM DOC Holder: The entity which, on behalf of a ship, holds the document of compliance certifying that that company complies with the requirements of the International Safety Management Code, which can be delegated to a ship manager or bareboat charterer. This entity can be mandated as the compliance entity under EU ETS (and MRV Regulation) and is the compliance entity under FuelEU.
Life Cycle Assessment: a method for assessing the GHG intensity of a fuel, which accounts for GHG across the full life cycle of the fuel, i.e. from production, delivery to consumption.
MiFID II: Markets in Financial Instruments Directive (MiFID) II, which is a legal framework for securities markets, investment intermediaries, in addition to trading venues. Entities holding EUAs, which are a financial instrument, may be regulated by MiFID II.
MOHA: Maritime operator holding account, which is a type of account for holding EUAs, and can only be opened by a compliance entity. It permits that entity to surrender EUAs to their Administering Authority.
MRV Regulation: Regulation (EU) 2015/757, the Regulation which complements EU ETS and requires shipping companies to monitor, report and verify emissions from their ships.
Physical Transport Contract: this is a contract for carriage services such as a time charter or voyage charter.
Polluter Pays Principle: a policy principle commonly adopted in emissions regulations, which seeks to impose the costs of emissions of the ultimate polluter. For EU ETS, this is identified as the commercial operator as defined therein.
Port of Call: Under EU ETS and FuelEU, this is defined as a port where the ship undertakes cargo operations or disembarks passengers. The definition excludes certain stops – such as for refuelling/obtaining suppliers, distress calls, and ship-to-ship transfers outside ports.
RED II: Directive (EU) 2018/2001, the EU Directive which promotes the use of energy from renewable sources.
Registry Regulation: Regulation (EU) No 389/201, this Regulation complements the EU ETS and contains the obligations and requirements in respect of opening MOHA’s and trading accounts. It sets out the legal nature of EUAs and the rules in respect of transfer, surrender and ownership of EUAs.
Reporting Period: For CII Regulations, EU ETS and FuelEU, this is one full calendar year from 1 January to 31 December, within which compliance entities must monitor the ship’s emissions and GHG intensity, as prescribed in each regulation.
Required CII: The specific annual operational energy efficiency that vessels must achieve under CII, which is expressed in accordance with the AER metric on a gCO2/dwt.nm basis.
Required EEXI: This is a benchmark value for EEXI for each ship, which is derived from the ship’s type and capacity.
Revised MARPOL Annex VI: The amendments to Annex VI of the IMO’s MARPOL Chapter 4, via MEPC Resolution 328(76), which incorporate the CII Regulations.
RFNBO: Renewable fuel of non-biological origin. These are sustainable, synthetic (e-)fuels, where the fuel’s feedstock is derived from sustainable, renewable sources and the energy powering the production process to transform the feedstock into fuel is also derived from renewable sources. Examples include green methanol, green ammonia or green hydrogen.
SEEMP: Ship Energy Efficiency Management Plan, a document which is kept onboard a ship and records the steps that the ship shall take in order to comply with the CII Regulations.
Shipping Company: A “shipping company” or “company” is the entity responsible for compliance with EU ETS and the MRV Regulation, which may be the ISM Doc Holder (if mandated by the registered owner) or the registered owner. A “company” is also the entity responsible for compliance with FuelEU and, by default, shall be the ISM Doc Holder.
SMF: Sustainable maritime fuel, which is fuel that shows a GHG saving compared to liquid fossil fuel, such as types of LNG, LPG, biofuel or RFNBO.
SoC: The IMO Data Collection System Statement of Compliance, where the Attained CII and CII Rating are recorded in accordance with the CII Regulations.
SPL: Shaft power limitation. A method of complying with EEXI.
Surplus: Under FuelEU, where a ship’s GHG Intensity is below the GHG Intensity Limit, the ship’s Compliance Balance is positive, which is a compliance surplus.
Sustainability and GHG Saving Criteria: Criteria established by international standards, laws and regulations or even commercial agreement for the sustainability and GHG saving of a certain fuel type.
TtW (Tank-To-Wake): an assessment of GHG intensity of a fuel, covering the period from consumption onboard a ship, when it is in the fuel tank, to the ship’s wake.
Trading Account: An account where EUAs can be held and from which EUAs can be transferred to other accounts. These accounts can be opened by any qualifying entity, i.e. they do not have to be compliance entities. However, functionality is reduced compared to a MOHA and EUAs cannot be surrendered to Administering Authorities from these accounts.
Verification Period: Under the CII Regulations, FuelEU and EU ETS, the year immediately after the Reporting Period is the verification period, during which emissions data and GHG intensity data that has been monitored and recorded by a ship for the previous Reporting Period is reported and verified by an accredited verifier under the applicable regulations and other compliance steps are taken.
Voyage Voyages are movements of a ship between ports of call
WtW (Well-to-Wake): an assessment of GHG intensity of fuel on a full Life Cycle Assessment basis.
WtT (Well-To-Tank): an assessment of GHG intensity of a fuel, covering the period from production, transport to port, and delivery onboard the ship.