In the first article in this series, the World Fuel team explained what RED III entails, including its targets, its structure, and the fact that national implementation is not uniform across member states. That inconsistency is a notable factor for shipping companies, fleet operators, and fuel buyers, and understanding its commercial consequences is critical for anyone managing a bunkering or compliance strategy in European waters.
One further piece of context that is worth keeping in mind: The IMO's Net-Zero Framework, which was expected to provide a new global standard for shipping GHG emissions, did not receive formal adoption at its anticipated special MEPC session in late 2025 and has been pushed back to October 2026. For operators who are tempted to wait for more global clarity before committing too heavily to regional strategies, that delay exerts pressure on the case for engaging with EU-specific frameworks now. RED III and FuelEU Maritime are in force and already producing tangible commercial penalties for inaction in European ports.
In this part, we address how RED III interacts with FuelEU, what shipping companies might consider to better position themselves for compliance, and how the supply chain is already responding to a regulatory-driven environment that can look very different depending on which EU port you are calling at.
How do RED III and FuelEU Maritime interact?
FuelEU came into force in January 2025. It sets binding limits on the greenhouse gas intensity of energy used on board large vessels calling at EU ports, and it incentivizes the use of lower-carbon fuels, including certified biofuels, as a route to compliance—see here for more information. FuelEU, in its first 5 years, until 2030, requires obligated vessels to reduce the GHG intensity of energy used on board by 2%, compared to the 2020 reference value of 91.16 gCO2e/MJ. It has been the dominant regulatory focus for many operators in recent months, and rightly so. But RED III operates alongside it, and the two frameworks require slightly different criteria to comply.
The most notable area of misalignment concerns used cooking oil, commonly known as UCO. Under FuelEU, UCO-based biofuels are recognized as compliant fuels and contribute to a vessel's GHG intensity reduction. FAME produced from UCO, known as UCOME, has become the benchmark fuel against which FuelEU abatement costs are commercially priced across Europe. Under RED III, UCO is listed as an Annex IX Part B feedstock and carries a default lifecycle GHG savings of around 83% against the fossil comparator, meaning it continues to count favorably toward a member state's renewable energy targets. However, RED III caps the volume of Part B feedstock biofuels that can count toward renewable energy targets at 1.7%, and major member states are phasing out the double-counting that previously made UCO especially attractive for land transport compliance. More significantly, RED III leaves the treatment of these fuels in the maritime sector to national implementation, and some member states have chosen to grant them no compliance value there at all, in contrast to their standing under FuelEU.
In the Netherlands, which formally implemented RED III in June 2026 retroactively applying from January 1, 2026, the Dutch Emissions Authority (NEa) confirmed that UCO and other 9b feedstocks supplied to the maritime sector will carry a carbon intensity value of 94 gCO2e/MJ, equivalent to fossil fuel, for the purposes of the national mandate, and that fuel suppliers cannot generate maritime compliance credits from it. The practical consequence for the Amsterdam-Rotterdam-Antwerp (ARA) region is that suppliers are continuing to offer UCO blends where demand persists, but at a premium that reflects the cost of the missing compliance credits—effectively increasing the delivered price of what had previously been one of the most cost-effective compliant fuels in the region. For a fuel buyer sourcing biofuels in Rotterdam, a fuel that satisfies one regulatory framework may not satisfy the other, and that now carries a cost.
Mark Tamsitt, World Fuel’s Senior Vice President of Global Marine Sales, believes that best practice here means keeping the strategies clearly separated:
“The interaction between RED III and FuelEU Maritime is one of the areas where we have seen the most uncertainty among customers. Both frameworks are in play, and while their incentives are not always perfectly aligned, World Fuel is well placed to help companies navigate these requirements effectively and position themselves to maximize both regulatory and commercial benefits.”
What obligations do shipping companies have?
As we have already alluded to in this mini-series, the short answer is that compliance with RED III, unlike FuelEU Maritime, is not a direct obligation on shipping companies. The directive places its targets on member states, which in turn have imposed obligations on fuel suppliers and distributors operating within their territory. In that sense, RED III is something that happens to the supply chain, and then flows through to operators via price movements, altering availability and changing the commercial viability of specific fuels in certain ports.
That said, there are several things shipping companies and fuel buyers can do to manage their exposure to this developing area of regulation proactively:
- Make a detailed plan: The first is rudimentary, but potentially very helpful. Make a detailed audit of where you are bunkering and what rules apply there. Given that national implementation of RED III is at different stages across the EU, the regulatory status of a particular fuel can vary from one port to another, as we have seen. A biofuel blend that is straightforward to source in one region may start attracting a premium or face supply constraints in another. World Fuel can help you stay informed about the implementation status in your key bunkering ports, as slight regulatory differences can lead to sizable price spreads between neighboring countries.
- Feedstock selection: The second is to understand your feedstock. Not all biofuels are equal under RED III, and the classification of the feedstock determines whether a given fuel counts toward national renewable targets. For example, Annex IX Part A feedstocks (‘9a’ or ‘advanced’ feedstocks), which include agricultural residues and certain waste streams, are generally treated more favorably than Part B feedstocks, such as UCO and animal fats, where their contribution is capped. Knowing which feedstock your biofuel is produced from, and how it is classified in the member state where you are taking bunkers, is an increasingly important part of due diligence, as feedstock choice directly affects the cost competitiveness of your bunker strategy.
Certification: The third is to review your certification. Under RED III, the sustainability credentials of a biofuel must be verified through recognized certification schemes, such as ISCC. ISCC is the most recognized certification scheme globally. Only ISCC EU (not ISCC PLUS) is recognized by the European Commission as being compliant with RED III. It strictly adheres to the GHG reduction and sustainability criteria set out in the Renewable Energy Directive.
How the supply chain is adapting
The commercial impact of RED III is already visible in the European bunkering market, but so far the pattern is one of adjustment rather than wholesale disruption, even if it has been felt more acutely in certain ports. Shipping companies can still buy waste-based biofuels, such as UCOME, and meet their FuelEU obligations using them. The changes are largely contained on the supply side. RED III is affecting the economics of supply by narrowing the range of feedstocks that can be supplied compliantly and cost-effectively. The result is a market in which the fuels reaching the vessel are increasingly driven by regulation rather than by what an owner would otherwise choose.
In the Netherlands, the reclassification of UCO has removed it from among the most cost-effective feedstock options in the marine biofuel market. Some suppliers in the region are moving toward Annex IX Part A feedstocks or exploring RFNBO (Renewable Fuel of Non-Biological Origin) pathways, both of which tend to carry higher costs for the end user. This has contributed to price increases on conventional bunkers and biofuel blends in the region. The impact on conventional bunker prices is due to the Netherlands now requiring suppliers to reduce CO₂ emissions on all fossil bunkers they supply by 2.9% for the same year. There are two ways to meet that obligation: (1) buy Emission Reduction Units (“ERE”) or (2) supply more compliant biofuel (blended with fossil). With lower-cost feedstocks like UCO no longer eligible, suppliers must turn to higher-priced compliant feedstocks, and these extra costs are often passed on to the end customer.
Cost is not the only consequence of this influence, however. A feedstock being recognized as sustainable is not the same as it being fit for purpose at sea. An Annex IX Part A advanced feedstock may count favorably under the directive, but marine fuels must still meet established quality specifications. If they do not, engine manufacturers can void warranties, and vessels can face quality problems on board. Owners need confidence that what reaches the tank meets marine specification and not merely sustainability eligibility. The two are separate parameters, and satisfying one does not guarantee the other.
Elsewhere in Europe, Belgium has delayed the implementation of its stricter RED III mandate for marine fuels, with a revised timeline anticipated in 2027. This creates a period of relative continuity for suppliers and operators in Belgian ports, but it also means that the regulatory picture will change again when the Belgian transposition does come into effect. Operators planning multi-year compliance strategies should factor that timeline into their thinking.
Though the maritime sector, thus marine fuels, remains excluded from the change for now, Germany is eliminating double-counting for certain waste-based feedstocks under its RED III transposition.
In Italy, the RED III transposition does include maritime within the transport mandate, but specific maritime targets and rules have not yet been published. This uncertainty for marine, combined with strong obligations in road and aviation, leads suppliers to prioritize those sectors, leaving limited HVO available for marine customers.
In the near term, the European regulatory environment is expected to become more dynamic and remain less uniform in its implementation of RED III. If rules continue to vary and feedstock classifications remain inconsistent across member states, a bunkering strategy that was well-optimized six or 12 months ago may need revisiting.
As Mark Tamsitt remarks:
“What we are seeing in the market reflects the familiar difficulties of multi-jurisdictional compliance. Our customers need a supplier who understands not just what the regulations say, but how they are being applied port by port and what that means for their fuel options. That kind of 360° market intelligence is where World Fuel adds significant value.”
Working with World Fuel
World Fuel operates across the key European bunkering hubs and has been closely tracking the pace and detail of RED III implementation in each region. Our commercial and technical teams work with customers to map their compliance obligations across both RED III and FuelEU Maritime, identify the right fuel and feedstock choices for their specific trading patterns, and ensure that the document chain is in place to support certification and reporting requirements.
As national implementation continues and the European regulatory landscape for marine fuels becomes more complex in the period ahead, choosing a supply partner with our breadth of insight and global geographic coverage matters even more. World Fuel is committed to helping our customers stay ahead of these changes.
Contact World Fuel today to discuss your RED III strategy and consider the compliance options in the ports where you operate.
