Based on reporting and statutory guidance from DNV
The European Commission has published new guidance outlining how shipowners can report and verify actual methane slip emissions under FuelEU Maritime and the EU MRV / ETS frameworks, opening the door to materially lower compliance costs for LNG-fuelled vessels as shipping enters the EU carbon pricing regime. The guidance allows ship operators to deviate from conservative default methane slip factors by applying certified, engine-specific emission values, provided these are verified through approved measurement and monitoring procedures. Crucially, verified methane slip factors may already be applied for the 2025 FuelEU Maritime reporting year, ahead of methane’s formal inclusion in the EU ETS in 2026.
FuelEU Maritime, which applies to vessels over 5,000 GT calling at EU ports, regulates greenhouse gas intensity on a well-to-wake basis, covering CO₂, methane and nitrous oxide. Methane slip has emerged as a critical variable due to methane’s global warming potential, which is approximately 25 times higher than CO₂ over a 100-year horizon. Under standard FuelEU and MRV rules, methane slip factors are assigned based solely on engine type. However, recent technical upgrades and optimisation kits introduced by engine manufacturers have significantly reduced methane slip rates in practice. According to DNV, slow-speed LNG Otto engines can now achieve slip rates as low as 0.7%, compared with a default factor of 1.7%. While the numerical difference may appear modest, the compliance impact is substantial. As FuelEU targets tighten and EU ETS coverage expands to non-CO₂ gases from 2026, applying verified actual methane slip factors could translate into annual cost savings exceeding €1 million for a large container vessel, such as a 24,000 TEU ship, over the coming decade.
These verified values are then used in FuelEU and MRV calculations and, from 2026 onwards, will directly affect the volume of EU ETS allowances that shipping companies must surrender.
FACS perspective
The new guidance transforms methane slip from a static compliance penalty into a strategic optimisation lever. For LNG-fuelled fleets, particularly those with upgraded engines or retrofit kits, investing in methane slip measurement and verification can significantly reduce FuelEU penalties and future ETS exposure.
At FACS, we see this development as a clear signal that granular emissions data and forward-looking carbon cost modelling will be essential for maritime operators navigating FuelEU Maritime and the expanding EU ETS. As methane and nitrous oxide enter the carbon pricing framework, operators that actively manage non-CO₂ emissions will gain a measurable cost and competitiveness advantage
You can read the full statutory guidance via DNV here
This article is based on publicly available regulatory guidance and reporting. All rights, including copyright, remain with the original source.