As I sit down to write this week’s Sunday Compass, I’m struck by how swiftly the winds of regulation are reshaping the maritime world. The European Union has set its sights on nothing less than a transformation of the shipping sector-one that will ripple across global supply chains, port communities, and the very way we think about sustainable trade.

Whether you’re a shipowner, a logistics professional, or simply passionate about the future of our oceans, the EU’s roadmap for 2030 and 2050 is a story you can’t afford to miss, and that’s why I bring it to you today.

Shipping is the lifeblood of international commerce, moving over 80% of global goods and underpinning Europe’s economic prosperity. But it’s also responsible for 3–4% of the EU’s total CO₂ emissions-more than 124 million tonnes in 2021 alone. As climate imperatives intensify, the EU is determined to make shipping a cornerstone of its Green Deal and “Fit for 55” agenda, aiming to reduce greenhouse gas (GHG) emissions by at least 55% by 2030 (from 1990 levels) and achieve climate neutrality by 2050. The stakes are high. The measures the EU is rolling out will not just shape the future of European shipping-they will set a benchmark for the world.

For decades, ships have run on heavy fuel oil-a reliable but carbon-intensive choice. Until recently, the maritime sector escaped the kind of climate scrutiny faced by other industries. That era is over. In 2021, the European Commission launched the “Fit for 55” package, a sweeping legislative effort to overhaul everything from energy taxation to fuel standards and emissions trading.

Two pillars define this new landscape:

• FuelEU Maritime Regulation: Mandates a progressive reduction in the GHG intensity of ship fuels, starting in 2025 and ramping up to 80% by 2050.
• EU Emissions Trading System (EU ETS) for Shipping: Expands carbon pricing to cover maritime emissions, making polluters pay for their CO₂ output from 2024 onward.

These are complemented by new rules on onshore power supply, alternative fuels infrastructure, and sustainability reporting-creating a comprehensive, interlocking framework that will touch every link in the maritime value chain.

The FuelEU Maritime Regulation sets a clear path for decarbonization:

• 2025: Ships must reduce the GHG intensity of their fuels by 2% compared to 2020 levels.
• 2030: The target rises to 6%.
• 2040: 31% reduction.
• 2050: A dramatic 80% reduction-essentially pushing the sector toward climate neutrality.

These targets apply to all ships over 5,000 gross tonnage calling at EU ports, regardless of flag-a global reach that ensures international compliance.

To meet these targets, the regulation is technology-neutral but strongly incentivizes the uptake of:

• Biofuels
• Green hydrogen and ammonia
• E-fuels and synthetic fuels
• Wind and solar-assisted propulsion

Operators are given flexibility in how they comply, with mechanisms like credit banking, borrowing, and pooling to manage compliance across fleets and encourage early adoption.

From 2030, container and passenger ships at major EU ports must use onshore power or alternative zero-emission technology while at berth, dramatically reducing local air pollution. By 2035, this requirement extends to all EU ports equipped with OPS facilities.
This measure is a game-changer for port cities, promising cleaner air and quieter harbors.

Starting in 2024, shipping companies must buy allowances for their emissions:

• 2025: Pay for 40% of emissions reported in 2024.
• 2026: 70% of emissions.
• 2027 onwards: 100% of emissions.

The ETS covers 100% of emissions on intra-EU routes and 50% on voyages between the EU and third countries. Revenues from the ETS will support decarbonization projects and climate-related investments.

• Energy Taxation Directive (ETD): Marine fuels for intra-EU voyages will be taxed, removing outdated exemptions and aligning taxation with climate goals.
• Alternative Fuels Infrastructure Regulation (AFIR): Mandates the rollout of shore-side electricity and alternative fuel bunkering at key ports, ensuring the infrastructure is in place for the energy transition.

New directives like the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) require maritime companies to manage and report the social and environmental impacts of their entire value chain-including suppliers and subcontractors. Fines for non-compliance can reach up to 5% of annual global turnover.

• Operational Costs Will Rise: Carbon pricing and fuel mandates will increase costs, with surcharges estimated between €7 and €105 per TEU for container lines. However, early adopters of green technologies can bank credits and pool compliance, potentially gaining a competitive edge.
• Fleet Renewal and Retrofits: Expect a wave of investment in new builds, retrofits, and alternative propulsion. Hybrid, hydrogen, and wind-assisted vessels will become the new norm.
• Data and Transparency: Digitalization will be essential for tracking emissions, optimizing routes, and ensuring compliance. Real-time data will drive both regulatory reporting and commercial decision-making.

• Infrastructure Investment: Ports must rapidly expand OPS and alternative fuel bunkering. The Port of Rotterdam, for example, is investing heavily in hydrogen, biofuels, and shore power to stay ahead of the curve.
• New Incentives: Ports can offer discounts or priority berthing to greener ships, creating a virtuous cycle of sustainability.
• Collaboration Is Key: The energy transition will require unprecedented collaboration between ports, shipowners, fuel suppliers, and technology providers.
For Supply Chains and Shippers
• Route and Carrier Selection Will Matter: Shippers will need to consider not just cost and speed, but also the emissions profile of their carriers and routes. Some may choose to pay a premium for greener options.
• Reporting and Compliance: Companies will be expected to track and report the environmental impact of their logistics, including Scope 3 emissions from shipping.

The EU’s approach is ambitious, but not without hurdles:

• Technology Readiness: Many alternative fuels and propulsion technologies are still in development or early deployment. Scaling up will require time, investment, and innovation.
• Cost and Competitiveness: Higher costs could impact the competitiveness of EU shipping if other regions do not follow suit. There is a risk of “carbon leakage” if ships bunker fuel outside the EU or reroute to avoid regulations.
• Regulatory Complexity: The overlapping web of regulations (ETS, FuelEU, AFIR, ETD, CSRD, etc.) can be daunting, especially for smaller operators. Staying informed and agile is crucial.
• Global Alignment: The EU is pushing for international action at the IMO, but global alignment remains a work in progress. The hope is that the EU’s leadership will set a standard for others to follow.

The EU’s measures for 2030 and 2050 are nothing short of transformative. They are designed not just to cut emissions, but to future-proof Europe’s shipping industry, create a level playing field for green fuels, and set a global example for maritime decarbonization.
For all of us in the maritime world, the message is clear:

• Start preparing now. The regulatory bar will only get higher.
• Invest in cleaner technologies and alternative fuels. Flexibility is built in, but the direction of travel is unmistakable.
• Engage with ports and supply chain partners. Infrastructure and collaboration will be key to compliance and competitiveness.
• Stay informed and agile. The regulatory landscape will evolve, and early movers will have an advantage.

The EU is betting big on a sustainable maritime future. For those ready to adapt, the opportunities are as vast as the oceans we cross. For those who wait, the tide may prove less forgiving.

As always, I’m here to help you navigate these changes-so let’s keep the conversation going as we sail toward 2030, 2050, and beyond.

Cheers,

Fernando

EPIRB and SART

This week, I want to spotlight two unsung heroes of maritime safety: the EPIRB and the SART-or, simply put, emergency beacons. These small devices might not look impressive at first glance, but they are absolute lifesavers when things go wrong at sea.

Both EPIRB and SART are emergency beacons designed to call for help and guide rescuers in critical situations, but each plays a different role in the rescue process.

The EPIRB is your first line of defense in an emergency. Imagine your vessel is in trouble far from shore: when you activate the EPIRB (it can also activate automatically if it contacts water), it sends a distress signal via satellite, broadcasting your exact position to rescue coordination centers worldwide. Thanks to the international COSPAS-SARSAT system, your alert is quickly relayed to authorities, who can then organize a rescue response without delay.

Modern EPIRBs include GPS for pinpoint accuracy, operate for at least 48 hours, and transmit a unique vessel identification code-making it easier for rescuers to find and recognize you.

The SART comes into play during the final phase of a rescue. Once search teams are nearby, the SART helps them zero in on your location. How does it work? When it detects the radar signal from a ship or aircraft, it responds by creating a series of bright dots on the rescuer’s radar screen, leading them directly to you. Its range is shorter than the EPIRB (about 8-10 nautical miles), but it’s crucial for that “final mile” of the rescue, especially in poor visibility or rough weather.

There are traditional radar SARTs and newer AIS-SARTs, which use GPS and the Automatic Identification System for even greater precision.

The need for emergency beacons became clear after maritime tragedies like the Titanic, which highlighted the importance of rapid location and rescue. Early EPIRBs were basic radio beacons, but with advances in satellite and GPS technology, today’s devices offer global coverage and incredible accuracy. SARTs developed to complement EPIRBs, making it easier for rescuers to find survivors in the final stage of a search.

Today, both EPIRB and SART are mandatory on commercial vessels and strongly recommended for recreational boats, forming a core part of the GMDSS (Global Maritime Distress and Safety System).

• EPIRB: Sends out the initial distress call and your position to the world, kickstarting the rescue process.
• SART: Guides rescuers directly to you once they’re in the vicinity, even in the worst conditions.

Each beacon plays a vital role, giving you the best possible chance of being found and rescued if you ever need help at sea.

So next time you step aboard, take a moment to spot those small orange beacons-they’re your best friends when it matters most.

If you’d like to contribute a term for a future edition, feel free to reply to this email or send me a DM — I’d love to hear your ideas.