FuelEU is similar to the EU’s Emissions Trading System (ETS), a cap-and-trade system that relies on emissions measurements and reporting to work. In the EU ETS, many companies struggle with accurate and timely data sharing, including the ability to track consumption and emissions and present them to regulators in a compliant manner. FuelEU will likely see the same or similar challenges.
One of the primary challenges in both the EU ETS and FuelEU is ensuring data accuracy and reliability. Emissions data is complex, involving multiple variables such as fuel type, engine performance, pressures, temperatures, operational conditions, and weather influences. Collecting precise data from these diverse sources is challenging, and inaccuracies can lead to significant compliance issues and financial penalties. Moreover, ensuring the integrity of this data throughout the reporting chain is critical, as discrepancies can undermine the credibility of a company’s emissions reporting.
Timeliness is another critical aspect. Reporting emissions data promptly is essential for regulatory compliance. However, many companies struggle with this aspect of data collection and reporting. Delays can occur due to manual data entry, lack of integration between onboard systems and shore-based data platforms, and inefficient data processing workflows. These delays jeopardize compliance, hinder the ability to make timely operational decisions based on emissions data and result in fines.
The regulatory framework governing emissions is complex and constantly evolving. The EU ETS and FuelEU come with stringent reporting requirements that can be challenging to navigate. Companies must stay abreast of regulatory updates and ensure their reporting systems are adaptable to new requirements. This necessitates continuous monitoring of regulatory changes and often requires significant adjustments to reporting processes and technologies.
Tracking emissions transactions and verifying data integrity is another major challenge. The EU ETS requires accurate tracking of fuel consumption and type of fuel consumed and resulting emissions. Similarly, FuelEU will likely necessitate detailed fuel consumption tracking and emissions reductions. Ensuring the verifiability of this data is critical to prevent fraud and maintain trust in the emissions trading system. Companies must implement robust auditable and traceable data collection processes to ensure the accuracy and legitimacy of their reported data.
