What does the Fit for 55 package mean for wine shipping?

In 2025, significant changes to legislation will have an impact on our shipping customers who call at European Union ports. 

The EU has set an ambitious agenda of measures to meet the environmental goals of the Paris Agreement. The European Commission's Fit for 55 package is a key part of this. It sets out a 55% reduction in European net greenhouse gas emissions by 2030, compared to 1990 levels. Fit for 55 is expected to have a significant impact on maritime shipping from 2025, driving forward a shift to more sustainable shipping fuels. Here’s what you need to know.

What changes will the Fit for 55 proposals bring?

The EU’s commitments to achieving its climate goals and ensuring a sustainable future are captured in the Fit for 55 regulatory package. The Fit for 55 package aims to make all sectors of the EU’s economy fit to meet the 55% reduction in greenhouse gas emissions target by 2030, and to make the EU climate-neutral by 2050. The package incorporates major regulations including:

• EU ETS (Emission Trading System) regulations
• FuelEU Maritime regulations

Emission Trading System

The EU is legally committed to reducing its greenhouse gas emissions by at least 55% by 2030. Since 2024, the EU Emissions Trading System (ETS), has been part of this drive, whereby ship operators need to buy emission allowances issued by the EU to cover their verified emissions each year. 

In practice, this means that there will be a cap on the total amount of greenhouse gas emissions allowed. Under the ETS, shipping companies can trade or buy emission allowances. Companies that do not surrender allowances may be liable for an excess emissions fine, at 100€ per tonne of CO2 not accounted for.  This system is being phased in gradually, until 2026. 

From January 1st 2025, vessel operators will need to surrender allowances for 70% of their emissions reported in 2025, up from 40% in 2024. Then from 2026 onwards, 100% of emissions need to be covered.

FuelEU Maritime Regulations

From January 1st 2025, the FuelEU Maritime regulations will come into force. It incentivises the use of lower emission fuels for vessels and the decarbonization of maritime shipping. It requires vessels to reduce the intensity of the greenhouse gas emissions of their fuels by 2% in 2025, compared to the 2020 baseline. Shipping companies will need to comply with the requirements, which will progressively become stricter every 5 years. The cost of compliance will therefore also increase. 

From 2025, these Fit for 55 regulations mean that commercial vessels of 5,000 gross tonnage and above must use less carbon-intensive fuels when calling at EU ports. This regulation requires vessels to reduce the greenhouse gas (GHG) intensity of the fuel they use at the following intervals:

• 2% decrease by 2025 
• 6% decrease by 2030
• 14.5% decrease by 2035
• 31% decrease by 2040 
• 62% decrease by 2045 
• 80% decrease by 2050 

By 2050, carbon intensity should therefore be 80% of the carbon intensity of the EU's fleet in 2020, which was 91.16 gCO2e/MJ. This mechanism will bring about significant reductions in the carbon footprint of maritime shipping. 

In practice, this means that vessels will need to use progressively more sustainable fuels and technologies to comply with the regulations. The regulations will also require vessels to use an on-shore power supply, which is designed to tackle air pollution. This applies from 2030 for TENT-T ports (trans-European transport network), and 2035 for all other ports. 

To help our customers make informed decisions, we have created a carbon emissions reporting tool that enables you to calculate the emissions associated with your shipments.

What are the implications of the Fit for 55 package for shipping?

The wine, beer and spirits industry will need to adapt to the new regulations, but Hillebrand Gori is here to help shipping companies and importers understand and embrace these changes. Broadly, the Fit for 55 package has several likely implications for maritime shipping:

• Expansion of the ETS system, covering maritime shipping.
• Significant reductions in greenhouse gas emissions.
• Phasing out of fossil fuels, including a shift to renewable fuels.
• Supply chain changes, such as route and sourcing changes to lower-carbon options to avoid additional costs. 

Importers can also expect additional costs associated with the Fit for 55 package, including:

• A 75% increase on the current EU ETS surcharges from January 2025, due to the increase in emissions covered (from 40% in 2024, to 70% in 2025).
• The EU ETS price will continue to be adjusted every quarter after 1st Jan 2025, based on the EU carbon allowance market price, and vessel consumption.
• The FuelEU maritime regulation, introduced in 2023, may also lead to additional costs for shipping lanes. These costs will be reflected in fuel and ETS surcharges.
• The Carbon Border Adjustment Mechanism (CBAM) imposes a carbon price on carbon-intensive products, and may affect imported wines with a higher carbon footprint.

What are the next steps? 

As always, Hillebrand Gori will strive to provide the clarity needed to help our customers face their logistics and decarbonization challenges. Towards the end of 2024, we will communicate applicable surcharge levels per trade that will come into effect as of January 2025. Subscribe to our newsletter to stay informed and stay ahead, with the latest industry news and insights.

Reviewed by Hillebrand Gori