DNV has issued new guidance to help shipowners navigate the flexibility mechanisms available under the EU’s FuelEU Maritime regulation, as the first compliance deadline draws closer. Companies must submit their inaugural annual FuelEU reports by 31 January 2026, marking the start of a reporting and verification cycle that will determine whether vessels meet greenhouse gas (GHG) intensity limits for voyages involving European Economic Area (EEA) ports.

The regulation allows shipowners to manage their compliance position using three options: banking, borrowing and pooling, designed to offer operational flexibility while incentivising gradual decarbonisation. Before applying any of these mechanisms, a vessel must fall within the scope of FuelEU Maritime, meaning it has at least 5,000 GT and is used for transporting cargo or passengers commercially to or from an EEA port, and its annual FuelEU report must be verified as “Satisfactory”.

How the compliance balance works

A vessel’s compliance balance (CB) reflects whether it over- or underperforms against the annual GHG intensity target. This is calculated by taking the difference between the year’s target and the vessel’s actual GHG intensity, multiplied by its total energy consumption from fuels and shore power.

The Initial Compliance Balance (ICB) appears in the verified FuelEU report; any adjustments from previous years, such as banking or borrowing, are included in the Adjusted Compliance Balance (ACB). The final Verified Compliance Balance (VCB) determines whether the vessel receives a Document of Compliance or must pay penalties.

Banking and borrowing rules

DNV states that vessels with a positive compliance balance can bank all or part of their surplus for use in subsequent reporting periods. Banked surpluses do not expire and remain with the vessel if ownership changes, though any surplus not banked in a given year is lost.

For vessels with negative compliance balances, borrowing from the following year's compliance is permitted, limited to 2% of the GHG intensity target multiplied by the ship's total energy consumption. The borrowed amount is subject to a 10% increase in the following year, and borrowing cannot occur in consecutive reporting periods or simultaneously with pooling.

For example, a vessel that has borrowed an advance compliance surplus and does not call at an EU port during the verification period. In that case, the administering state will notify the company of the avoided penalty amount, multiplied by 1.1 to account for interest on borrowed funds.

Pooling arrangements

Pooling enables two or more vessels, including ships from different companies, to combine and redistribute their compliance balances. To participate, vessels must be within the scope of the regulation, must not have borrowed during the current verification period, can belong to only one pool per reporting year, and must hold a valid FuelEU Document of Compliance from the previous period.

Companies must register pooling intentions in the THETIS-MRV database, outline the balance allocation among vessels, and designate a verifier. All participating companies must validate the pool before verification can occur.

According to the guidance, if a vessel exits a pool with a surplus that is then banked, two separate verifications are required, one for pooling and one for banking, both of which must be completed by 30 April.

Timeline and penalties

The FuelEU compliance process begins when companies submit their annual reports to an accredited verifier by 31 January. By 31 March, the verifier must upload the report to THETIS-MRV, where the ICB is generated. By 30 April, the verifier must confirm the final compliance balance, meaning any banking, borrowing, or pooling arrangements must be agreed, validated, and verified well before this cut-off.

Penalties apply when a ship fails to achieve a compliance balance of at least zero. The penalty is set at €2,400 per tonne of very-low-sulphur fuel oil (VLSFO) energy equivalent, or approximately €58.54 per GJ of non-compliant energy use. Penalties increase by 10% for each consecutive reporting period in which they apply.

DNV recommends that shipowners develop clear compliance strategies, coordinate early with partners, and define responsibilities when using pooling or other flexibility mechanisms to ensure timely verification.