While Ship & Bunker‘s latest price forecasts project a sharp drop in bunker prices next year, the increase in emissions compliance costs from the EU looks set significantly to outweigh that decline.

The latest forecasts project the G20-VLSFO Index of average VLSFO prices at 20 leading bunkering locations averaging $465/mt in 2026, 17% down from the $560/mt average seen so far this year.

But, taking into account the cost of compliance with the EU-ETS and FuelEU Maritime regulations, a different picture emerges, with total fuel and compliance costs for an intra-EU voyage climbing by 5.9% from the 2025 year-to-date average to $829.94 per tonne of VLSFO consumption in 2026.

Breakdown

While the underlying VLSFO cost is projected to drop from $560/mt so far this year to $465/mt in 2026, most other costs are increasing.

The latest information from environmental market specialist Grey Epoch Europe* indicates the EUA price may average €86/mtCO2e next year, up from the €71.25/mtCO2e average seen so far in 2025.

On top of that price increase, two other key elements of the EU-ETS mechanism are changing next year. 

Firstly, emissions factors will be changed to include methane and nitrous oxide as GHG emissions for the first time, taking light fuel oil’s emissions up from 3.151 mtCO2e/mt to 3.2/mtCO2e.

And secondly, the phasing-in of the EU-ETS for shipping reaches its final stage next year. While for 2025 shipping firms only had to buy EUAs to cover 70% of their emissions, from 2026 onwards that rate will rise to 100%.

That means for one tonne of VLSFO consumption on an intra-EU voyage, EU-ETS compliance has cost around $173.15/mt on average so far this year, while in 2026 that figure will almost double to $314.46/mt. Voyages between the EU and elsewhere will incur costs of half those levels.

Meanwhile the FuelEU Maritime regulation’s effect on shipping remains at an early stage, with relatively low costs for now and little change expected between this year and next.

For one tonne of VLSFO with GHG intensity of about 91 gCO2e/MJ on an intra-EU voyage, FuelEU penalties would be around $50.48/mt in both 2025 and 2026. Costs for voyages between the EU and elsewhere would be half this level.

Alternatively, if shipping firms use the FuelEU pooling system to avoid paying penalties, the latest information from maritime emissions management firm OceanScore put the price for surplus FuelEU compliance pooling at about €217/mtCO2e ($248.50/mt) in June. 

Using that system, the cost for one tonne of VLSFO consumption with GHG intensity of about 91 gCO2e/MJ on an intra-EU voyage would be about $16.91/mt in both 2025 and 2026, assuming no change in pooling pricing over that time period, and half that number for a voyage from the EU to elsewhere.

To learn more about what GHG compliance costs may look like in the years ahead after the IMO 2028 deal comes into effect, visit Ship & Bunker’s compliance costs calculator page.

*Grey Epoch Europe Limited is an appointed representative of Thornbridge Investment Management LLP, which is authorised and regulated by the Financial Conduct Authority.