There is an elementary principle that should govern any law: you cannot impose an obligation without guaranteeing the means to fulfil it. The European Union, with the FuelEU Maritime regulation and the extension of the Emissions Trading System (ETS) to the shipping sector — both fully operational from 2025 — has chosen to ignore it.
The result? Million-euro fines for shipowners burning the only fuel available. Oil majors penalised for not supplying fuels that don’t yet exist at commercial scale. And a global industry that, quietly but decisively, is beginning to look elsewhere.
A System That Punishes Those Who Cannot Do Otherwise
From 1 January 2025, every vessel above 5,000 GT calling at a European port — regardless of flag or nationality — is subject to two overlapping and cumulative regulations.
The first, the EU Maritime ETS: shipping companies must surrender emission allowances covering 70% of their verified CO₂ in 2025, rising to 100% from 2026 — extended to methane and nitrous oxide. The second, FuelEU Maritime: vessels that fail to reduce the greenhouse gas intensity of their fuel face penalties starting at €2,400 per tonne in the near term, escalating to nearly €2,000 per tonne by 2050. The two systems do not replace each other. They stack.
The problem is brutal in its simplicity: the alternative fuels required for compliance do not exist at sufficient scale. Green methanol costs up to 626% more than conventional bunker fuel. Green ammonia has not a single dedicated bunkering port anywhere in the world. Liquid hydrogen remains confined to pilot projects. Estimated penalties for the first year of FuelEU application alone could reach €1.3 billion — not for negligence, but for objective impossibility.
As Norton Rose Fulbright, one of the sector’s most authoritative legal advisors, put it: “In many cases shipowners and managers have had to take on liabilities for which they were neither prepared nor initially equipped.”
Shipowners and Oil Majors: The Silent Victims
The people who work the sea are not abstract figures. They are entrepreneurs — many running small and mid-sized fleets — who built their business on global trade routes, with vessels designed to run on conventional bunker, refuelling at ports where that fuel exists. They have no access to green methanol because it isn’t there. They cannot order new dual-fuel ships because shipyard lead times run two to three years and costs are prohibitive. And they cannot absorb ever-growing annual penalties for something that doesn’t depend on their choices, but on the absence of market solutions.
The same logic applies to the oil majors — Shell, TotalEnergies, BP, ExxonMobil — who control over 51% of the global bunker market, a sector worth $150 billion a year. These companies have already invested billions in LNG, biofuels and alternative bunkering infrastructure. But market reality is unforgiving: certified green fuel, available at commercial scale and distributable across global trade routes, does not yet exist. Penalising them for not supplying what has not been produced is like fining the baker for not selling flour the harvest hasn’t delivered yet.
And there is another layer rarely discussed: the small independent shipowner. Not Maersk with its capital reserves and strategic fuel teams. Not a listed conglomerate with lawyers on retainer for ETS compliance. The family-owned bulker, the regional coastal operator, the tramp vessel owner who runs three ships between Mediterranean ports. For them, the administrative complexity of ETS reporting, the legal ambiguity around charter party responsibilities, and the mounting penalty exposure are not inconveniences — they are existential threats.
Where the Traffic Europe Is Losing Will Go
Ships are not trees. They move. And when the cost of calling at a European port becomes structurally higher than the competition, rational operators make the calculation any businessman would make.
Singapore, Dubai, Fujairah, Tanger Med, Houston: none of these hubs are subject to the same European rules. No ETS. No FuelEU. Conventional bunker at market prices, without penalties, without additional bureaucracy, without legal ambiguity embedded in charter contracts. For a shipowner reassessing their port rotation, the answer is becoming increasingly obvious.
Rotterdam, Europe’s largest port, is already facing growing competition from extra-European hubs on routes traditionally dominated by Northern European calls. Every container that transits through Singapore instead of Antwerp carries more than cargo — it carries jobs, port revenue, tax income. A loss that Europe struggles to acknowledge, because acknowledging the traffic shift would mean acknowledging the practical failure of the system itself.
The EU built its maritime rules on the assumption that the market would adapt. What it failed to model is that the market always finds the path of least resistance — and right now, that path leads away from European ports.
The Number Brussels Prefers to Keep Quiet
Behind the climate rhetoric lies a purely fiscal fact that deserves scrutiny. Since 2013, the EU ETS has generated over €250 billion in auction revenues. In 2024 alone, approximately €39 billion — of which around €25 billion distributed directly to EU member states.
This is, by any measure, one of the largest sources of public revenue in Europe — built on the price of emissions. A structural fiscal dependency that no official press release ever mentions. And that raises an uncomfortable question: if emissions actually fell — if the green transition achieved its stated goals — where would those states find the €25 billion a year to replace the shortfall?
Beyond the fiscal dimension lies the geopolitical one. European maritime rules apply to every vessel calling at EU ports regardless of flag. It is regulation with extraterritorial reach — forcing Asian, African and American operators to comply with Brussels standards or abandon the European market. A mechanism that China, India and Brazil have already challenged at the WTO as regulatory imperialism dressed in green.
The European Commission frames all of this under the banner of “open strategic autonomy” — the idea that Europe must use regulation as a lever of industrial and geopolitical power in a world increasingly dominated by the US-China rivalry. The green transition, in this reading, is not purely an environmental project. It is industrial policy. It is market capture. It is, in the most precise sense of the term, protectionism with a conscience.
This Is Not an Argument Against the Environment
Defending shipowners and oil majors from these regulations is not an argument against decarbonisation. It is a demand that rules be accompanied by real solutions, credible timelines, and a fair distribution of costs among all actors in the chain — including the states quietly banking the proceeds of a system that has very little financial interest in seeing emissions actually disappear.
A credible path to maritime carbon neutrality requires massive public investment in alternative bunkering infrastructure, production subsidies for green fuels, incentives for fleet conversion, and — above all — the patience to wait until the technology exists before fining those who cannot use it.
Those who work the sea have every right to demand exactly that. The sea has no borders. Regulations do. And when regulations become unsustainable, the sea always wins.
Sources: Norton Rose Fulbright, Shipping Environmental Compliance Update (2025); Maersk Logistics Insights, EU ETS and FuelEU 2025 (2024); Watson Farley & Williams, Maritime EU ETS and FuelEU Checklist (2025); European Commission, Carbon Market Report 2025 (COM/2025/39); GM Insights, Bunker Fuel Market Analysis (2025); Ship & Bunker, FuelEU Penalty Estimates (2025); WTO, CBAM and Trade Policy Disputes (2024).
“This article represents the editorial opinion of Capt. Paolo Leonetti and is based on publicly available data and legal analyses. It does not constitute legal or financial advice.”
