The Wavemakers Podcast

Navigating compliance, cost and change in shipping | Decarb Regulatory Panel by OceanOpt, BSM & BetterSea

• BetterSea • Season 3 • Episode 1

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In this special panel discussion moderated by Gordana Ilic (Co-CEO, BetterSea), we bring together three industry leaders to unpack the fast-evolving regulatory landscape shaping maritime decarbonization:

- Shaja Mathew – Senior Operations Director, Bernhard Schulte Management
- Anil Jacob – Managing Director, Oceanopt
- Maximillian Schoer  – Co-CEO, BetterSea

Together, we reflect on the impact of EU ETS, the upcoming FuelEU Maritime regulation, and the anticipated IMO Net Zero Framework!

Key themes we explore:
- The operational realities of EU ETS compliance in its first year;
- How regulations are fostering collaboration and data transparency between owners, managers, and charters;
- The role of high-quality data in shaping compliance, strategy, and long-term investments;
- Contractual and legal challenges under FuelEU — and what ship managers and owenrs need to know;
- Lessons learned so far, and how companies can prepare for the wave of upcoming regulations

This candid conversation dives deep into the intersection of compliance, cost, and change, offering valuable insights for shipowners, managers, charterers, and anyone navigating maritime’s regulatory future.

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🔗 Related Resources and Links:
• Follow Gordana Ilic on Linkedin: https://www.linkedin.com/in/gordanailicphd/
• Follow us on Youtube: https://www.youtube.com/@BetterSea

📩 Have questions or comments? Feel free to reach out via email at gordana.ilic@bettersea.tech

Hello, and welcome to the expert regulatory panel sessions, where we will be reflecting on the state of the shipping industry today with respect to the change, compliance, and costs.My guest today is Mr. Shaja Mathew from Bernhard Schulte Management, Senior Operations Director, Anil Jacob, managing director of OceanOpt, and Maximillian Schroer, one of the co-CEOs of BetterSea. So we will start with kind of the perspective of the shipping company and working with other shipping companies.Shaja, how would you describe driving decisions, operational decisions today in the mix of all these changes? Yeah, this is, the changing ship operations drastically. While everyone like to, comply, there are many constraints. The main constraint is the awareness of regulations, on various, partners among the shipping industry, like owners, charters, and all.Next is the availability of the resources, like compliant fuels, then technology.All these things are, shaping up the operational, changes.Regulations definitely, changing the industry operations, um, but the, availability of technology and crew training for this new technology is also increasingly important, and it's difficult to impose very easily.Mm-hmm.So these are the challenges we are facing.Between the need to secure alternative fuels and the cost and geopolitical situations and now compliance, how do you find a sweet spot in between?How do you approach solving this?There is no sweet spot as such- Mm-hmm.for time being.The easy way is to, for ETS, everybody's paying the penalty, and then, for, at least for the time being. but FuelEU, it's my perspective, will change the scenario because, it will drive shipping companies to adopt more, fuel-efficient technologies, compliant fuel or dual, dual fuel is coming in a big way.Time being there is no sweet- sweet spot as such.Mm-hmm.Now we are quite deep in new ETS with the deadline ringing, how do you see the shipping industry approaching new ETS compliance?How has it been for the first year?And are there any lessons that we can take from that into- A lot of lessons.the FuelEU in the next one?Yeah.A lot of lessons. We're getting lessons by the day.But, you know, it has been a good experience, but more than the compliance aspect rise, I think that new ETS has actually, made a good start to the way people think about decarbonization.So, um, I always feel that number one, collaboration has increased- Mm-hmm.because there's no other way.Everybody knows that they can't solve this problem by themselves at least.You need to collaborate, you need to cooperate with other stakeholders to find the solution.And no, no specific player, charter or owner or manager has all the solution.So that's where this data transparency and that one's common source of data.So new ETS has created that sim- simple sentence, which we call a void statement.Void statement is sent and then y- you have EUAs.So to create a void statement, obviously the owners and the charters need to collaborate, and the charters obviously need to reconcile the allowances.So this is one great improvement which has happened in an industry where owners and charters were in silos.So that, that's, that's a major impact, I would say.It's a great beginning, and FuelEU is going to really, really solidify that kind of approach.The challenge we have is to make them understand, especially for owners and charters who r- really don't want to change.So you have to be a change advocate in the, in the beginning and always still now telling them that what are we losing here if you don't decide now?Mm.And finally, I also think that, you know, as Shaja was saying, ship manager's position is, is very, very challenging.At the end of it, they do a lot of operations, including what seafarers are also contributing towards fuel consumption, and obviously, as you know, charter parties are on speed and consumption numbers, and, now even charters have started their own performance teams.They question each and every ton of fuel, which is coming back to questioning the seafarers again, who have been always at the receiving end, you know?So I think this is one cha- constant challenge we have.The first year, no movement happened for the first 5, 6 months because- Mm-hmm.that was gone and just making them understand what this regulation is because it's not like, an STCW or MARPOL or SOLAS where it's kind of easy to understand.You're talking about a lot of commercial, aspects.Suddenly for a technical person, it's very difficult to understand.Mm-hmm.And, and it's from the technical teams that you get the data- Yeah.which is to be used.So get all the stakeholders together to a common ground where everybody could understand it, to that, that itself took a lot of time.That, that kind of lagged the process.But once you had the verifiers, everybody on board where they were able to generate the void statements and people started agreeing to this common source of truth, which is going to define every UA.And then we also had companies also coming up with solutions, including us, then I think the gap has kind of reduced now.So at least we see a lot of, people who are already compliant.Mm-hmm.You know that you just got less than just more than a month before, um, we have the first compliance deadline for UETS.Yes.We still have people who have challenges in opening more accounts.Mm-hmm.So I mean, so I am, I am saying that the challenge is still there, but it's far from the- the beginning hurdles that we had at least.Mm-hmm.So that's- that's the kind of learning that you've got.I like how you said that UETS was a good beginning to the compliance party because it actually also changed the culture before the data was verified once a year and it still is, but then it called for, the pre-voyage validated data concept.And I think just that small little thing, it looks little, but it's not, it's actually a total cultural shift from being very, um, reactive.Like, you know, you wait and then things happen and that calls for silos and such, action.But this makes the real-time data even more accessible and that allows you to, act proactively, which is so important now stepping into where we are going with all the other regulations coming.And, um, are there any lessons that you would take going forward now from this UETS experience?first lesson is that obviously with these regulations coming in, we have to be very, very proactive in understanding this, putting it across to all the stakeholders and, you know, I think now FuelEU is the next challenge.We still have the same issue, we've- we are into meetings where they are understanding the regulations better.I'm- I'm sure that you are also going into meetings where the first few slides are on what is this regulation?Where we are at a time where we shou- they- we should really start looking at compliance by now.that- that is one of the lessons that we've learned that as soon as a regulation or its calculation methodologies are there, we should have the tools in place, we should have the training, guidance, everything in place so that people take time to understand and make their own, strategies.Mm-hmm.And secondly, the biggest learning is that you need to collaborate.Mm-hmm.And then, let's not put all this challenges on the seafarer because, th- eh, that's the end user who's suffering a lot with all these regulations.You know, we still have vessels where they are reporting in 3, 4 platforms, the same data.Yeah.Because the ships are not having telemetry or not having sensor data and they have to go through the owner's data form first, then they have to go to a platform that the charter have instructed to do.Mm-hmm.And- and then obviously you have mismatches here and there, eh, where again it comes to you know, the EUAs mismatch or let's say the compliance balance.So y- you have everything properly organized on one side, but on the operational side, in order to streamline it, you don't have mechanisms in place.So this is something that needs to be set first- Mm-hmm.before the regulations coming in.Now we- we still going for IMO GFI, we've still not had proper trainings done on the FuelEU and we're still having IMO GFI coming in the next 2 years.With that I will revert to Max.So can you reflect on the FuelEU journey of the industry and what is it the state now?Yes, I mean, I found interesting what Anil just said with the data transparency and the collaboration because I think this is really helping with FuelEU because we already had to implement it for UETS, so now there's already some sort of idea how to collaborate on data, how to give the transparency, right?And for example, the simple thing that you called voyage statement, that just now needs to be extended for FuelEU rather than newly developed, right?And I wasWhile Anil was talking, I was reflecting how in fact it was never the purpose of the EU ETS regulation to drive data transparency between maritime stakeholders, right?Mm-hmm.Or to drive collaboration between maritime stakeholders.In fact, the simple purpose was to put a price on the carbon that was emitted, right?But here you have this indirect impact of the regulation that solved a big issue that used to be there in maritime, what's the consumption of the vessel, and is it visible to all of the stakeholders, right?So then, that I just wanted to say because I found it interesting now when, when Anil was talking right?And that, I think is also the start to the FuelEU journey, because there are lessons learned from EU ETS, and hopefully these lessons that were learned are now taken up again under FuelEU.Mm-hmm.And I believe now, in the beginning of the year, there was still a lot of discussion around EU ETS, how to solve it, how to get the EUAs, how to set it, et cetera.And the first, like, push of the market when it comes to FuelEU was mainly the BIMCO standard FuelEU clause that was coming out.And then the first people were, let's say, starting to think about it, how to implement it in their charter party agreements, et cetera.But then now with EU ETS being more and more settled for the first year, you can see how the people start already attacking FuelEU in a more, let's say, proactive manner, and I believe this is the result of EU ETS and the learnings they had, because theoretically they could say, "I will wait."And, you know, similar to the EU ETS manner, "I will figure this out beginning of next year."But we do see that people are proactively engaging in the FuelEU scheme, and yes, I agree, there's still lower education on the regulation and we indeed have meetings where we need to start with the explanation of the regulation itself, but we also have proactive companies that, like, try to figure it out and come with the idea, with the strategy for FuelEU, et cetera, and have very direct questions onhow their issues, their use case can be solved with, for example, BeterSea's solution.I also find it interesting how just before EU ETS entered into force, they were all still kind of like, "It won't happen," like, disbelief, and then it happens.And then towards the end, there was, a bit more proactivity, like, "Okay, we should take a look into this," but then still the hope that it wouldn't happen.But now, we still don't know what is the final outcome of the IMO Net 0 Framework, right, like, to what extent, but people are already interested, like, "Will you have this extension?Will you be able to calculate it?"And I think that's a good shift and it shows that the market is learning and trying- Yes.to become proactive.And now backs- back to Mr. Shajah, how does it feel for you on the other side when you're just trying to make the most of today and then all these different regulations are popping up, different suppliers coming, everyone is asking for a new thing to be implemented, everyone is saying they know the best?How do you make ration- out of this?Yeah, so EU ETS happened and almost everybody is now prepared for EUA, all transfers, everything is ready.Now the FuelEU's coming in and then IMO Net 0 is coming, coming in.As a ship operator, is challenges, like, there are various data to be submitted, various data to be collected so we are some sort of centralizing the data collection and reporting.We are using our partner OceanOpt for this collection of data and submission.So they- they are more competitive and efficient in collection and submission.They- they know the regulation, they are ready for the coming regulation, their platforms are suitable for the changes.So weMost of the reputable shipping companies are doing this, centralized data collection andSo this reduce the operational bu- burdens of this collection and submission and on the normal ship operating stuff so they can concentrate on other job and then outsource this to some experts.So this is what we are doing there, I believe this authorities like IMO and EU all come together and make a streamline.Everybody aim for the same emission- Mm-hmm.reduction, but the frameworks are very different and difficult to understand for a, a ship operator. it is become more and more complex with various parties coming with various regulations.So I hope and I expect that industry will come together and will come one reporting and one compliance.And you're also close to the ship owners that you work with, how do you-How are you impacted by that dynamics?What do they think about it? There, there are large ship owners and there are small ship owners.So some are, um, well ahead of the regulations and their planning and all.Some are not that much.But the at the present, there is a cost involved on, on all this inefficient technologies and emission reduction and all.who is going to pay for this?This is, say still not settled in the market.It will, it will take some time to settle.So for example, now, a ship owner want to invest in a dual fuel or dual fuel methanol or dual fuel LNG vessels, capex is not covered by the charter rate.Trading areas is not defined during the charter party.It's most- mostly it's worldwide.So charters are not willing to pay for that EU part, and then the vessel go to EU, the charter will save a lot of m- money, but that key is not prepared to pay the owners in the building stage.Th- there is a conflict of interest or on the capex, who is going to pay, that is making some delays in the decision-making on the ship owner side.Mm-hmm.And then retrofits for small tankers, I, I operate some small chemical tankers, it's not cost-effective or retrofits are not cost-effective at theto cover this.So we have to start in the n- new, new building stage. I expect lot of old tonnage run move out of EU area, and then new vessels move into the EU area, and a lot of scrapping will happen, so it will take some time to settle- Mm-hmm.um, the industry dynamics.And also with the growing competition to get access to certain fuels and how to fuel the vessels and I think that will, in the next stage, affect operations quite a bit.Yeah, that is also Availability of fuel is a factor.Now now we can say prices are maybe competitive, but as an- when more and more charters or owners try to use biofuels and all, the cost pressure will be there-in the biofuel.And then we cannot depend only on that because very few areas, the availability is also less for the compliant fuel.For example, you are bunkering in Singapore, then you don't know where the ship is going, and when the sh- the fuel has to be used how to store it, because these limits are there.The tank configurations, all these things come into play.For a liner trade, maybe the s- it's easy, but for tram trade, it will be difficult to select the fuels.Mm-hmm.We see that also even with their approach to FuelEU, there's so many uncertainties when it comes to tram shipping.And back to fuel, the, the biofuels are also stable to a limit, so how to balance all these requirements is gonna be a challenge.And I remember our conversation, Ali, how you said that even a document that used to be a page and a half is now 7 just to start the, the collaboration. Can you elaborate more on that?Taking ships into management obviously has become more challenging now because a lot of financial due diligence also has to be done.Because you never know when the owner might get bankrupt just because of EU ETS or FuelEU exposure. So earlier, the shipment agreements were more technical in nature, where you are paid for technically managing the vessel, and everybody has their roles and responsibilities set out.But now it's more of financially, legal aspects coming in.You're throwing in a new kind of business perspective altogether into this normal ship management contract which has been there for years.Th- that, that's a m- rapid or massive change, and you are expecting both the stakeholders to rise up to that expectation on both sides.So, obviously what I was mentioning is that the checklist for taking ships into management has become more comprehensive now.It has to be really comprehensive because you really don't want to get bankrupt just because you've taken a vessel from a new owner- Mm-hmm.who's not able to kind of reconcile based on the exposure that you have, or basis the ignorance that they have on regulation.And FuelEU, um, I'm sure, um, more head scratching sh- could be done by Shaya now because FuelEU makes theI don't know for what reason, the ISM manager responsible for the regulation.Mm-hmm.Yeah.So we are al- always discussing this among ourselves that, you know, the regulators don't understand the operations of ships.Mm-hmm.Otherwise, who would position the ISM manager or the DOC holder responsible for FuelEU regulation?They don't have any control on the operation, neither- Yeah.the selection of fuel 0 or the vessel. So I think that's the biggest challenge as of now.EU ETS I would say yes, it a- it all makes sense that the owner will be the oneis the asset ownerBut FuelEU's 0 is, is in a way that's a, a challenge.Mm-hmm.And I know one person who had a fun time with contracts for FuelEU.Can you reflect on th- that journey working with maritime law firms?Yes.I mean I'm an engineer, by training.So similarly to Anil and Shaya over here yeah, I was, taken aback by the financial and legal things and they were to be considered when thinking about FuelEU.Um, and I also, like, I agree with Anil that it is odd that the ISM company's ultimately responsible for this whole game.Um, it'sIn fact, it's a legacy thing when it comes to the regulation that the ISM company ends up being responsible in this case.And I was wondering how, as a ship manager, you actually mitigate this risk of financial liability that you have under the regulation.Because, like, also it requires you to have the sufficient credit to cover it in case, you know, there are issues arising that you can't really control as you correctly said.Mm-hmm.As a ship manager, we have a agreement called the ship management agreement with the ship owner and ship owner in turnin turn they have agre the charter party agreement.So what we are d- doing now for this FuelEU, um, we are issuing addendums for ship management agreement for especially for the FuelEU, and asking for a corporate guarantee or a deposit- Mm-hmm.and based on the predictions.When new owner's coming in, we have to do our due- due diligence and check their company backgrounds and a lot ofWe engage specialists for this.Mm-hmm.Yes.I mean, from my perspective I used to work at Maersk and took care of the EU ETS there as well, and half of the fleet is chartered.And there we basically had the issue of the charter partyAnd I remember there was quite a m- big task to agree with all these owners on the addendum of the charter party agreement for EU ETS, right?So I would imagine that as you said, if you addend the shipment, then you will face a similar task when it comes to convincing the owners agreeing on the right set of agreement, et cetera.Yes.There are owners asking us to do it without any addendums or corporate guarantees and all.So with the ship management fee recei- we receive and the exposure we face for FuelEU and all, it is like, too much different.So we cannot afford to- Mm-hmm.have aEven a single default will collapse our our sy- system.So- Yes.we cannot without proper legal documents, we cannot doAnd I, I think that also underlines the question that you had to me, the contractual agreement that is set in place for FuelEU, may it be the shipment or the charter party agreement, or in the end, the pooling agreement, is one of the most essential parts when actually talking about FuelEU compliance. So as I said, I'm an engineer, but in fact nowadays I feel like I'm a legal nerd.because I think this is really, like, the most important thing to do, right?And aligning all these liabilities and making sure that whenever something goes down, there is a process in place and there's a legal framework that covers all these issues, I think is the most important part when it comes to, um, dealing with FuelEU.Being practical, would you elaborate what do you thinkOr this may be a question for everyone.What are some good things to have in a charter party agreement in favor of, for example, of an owner from that perspective?I mean, in a charter party agreement, there are several things that you need to think about when you do the full EU addendum.First and foremost, it's of course, who is responsible?So, um, BIMCO gave some guidance here and they said that if the charter period, is longer than, or minimum one reporting period, it should be the charter who is responsible.Otherwise, it will be the owner.That I definitely agree with, because if it's less then you end up in the issue that the vessel can only be in one pool per reporting period, but there are 2 entities that can effectively decide on the pool, and then it may end up in 2, or even 3, or 4, dependent on the amount of entities that end up with pooling decision power during the same reporting period.Um, then even if the charter period is longer than one year, there's, like, it will basically never happen that the redelivery of the vessel happens on the 31st of December.So, the likelihood is very low, right?So, you need to have, in the addendum, some sort of, um, structure around what happens if then only parts of the reporting period covered.And so, when redelivery is in March, what do you do from the 1st of January till March with the pooling of the vessel, right, and the compliance responsibility?And then, I think the next thing that is essential is what do you agree upon when it comes to the commercial values?And if I have a penalty, if I prevent the penalty, what are the reimbursement schemes that are in place?If I create a penalty, do I reimburse the owner if I don't have the pooling rights myself as the charter,How do I reimburse the owner?Do I reimburse the owner on the amount of penalty?Do I reimburse based on what I did when I pooled?All these kind of things need to be considered.Um, the biggest issue that we see so far is that it's unclear what is actually the cost of compliance.Because Yes, you can claim penalty is the cost of compliance, but effectively, you can pool, so you don't need to pay the penalty.And this is, I think, totally different to EU ETS, because here we know it's the EUA price,That one is dynamic, but we can sort of all see what's the price of such an EUA.Under full EU, we cannot right now.There's no, like, EX4 surplus.Um, and that's the issue th- that causes a lot of problems when deciding on such a charter party.And then, I mean, there were several ideas of what we see in the industry with like biofuel price indices, where you say, okay, instead of the penalty being the cost of compliance, I say, "I could use biofuel, so this is my cost of compliance."Or, I mean, now talking about better C, we have released our full EU index, which essentially gives an idea of the surplus price on our platform based on the transacted traits.So, that can also provide guidance when deciding on the reimbursement, course.And that leads us also to the source of truth to start with, right? how to trade if you don't know what is the status quo of the vessel and back to data.Like, on one side, you need to trade upfront, but you need to reflect on some numbers that may also change, and some are doing that with real-time numbers, some are using- Yes.manual inputs.So Anil, can you reflect on the state of data?Obviously, people who have not thought about data so seriously from 2018 and 2019, thanks to the IMO and the UMRO regulations, we have some form of data collection, which basically IMO said that, "Yes, I need to know how much of consumption is happening, how much of distance you're traveling, because I'm going to create a metric and I want to know how much you know, your vessels are burning fuel, because you want to reach a target in 2050."That was a great start, and then we started collecting data.But when I say that in 2025, we've got 7 years of data, but the quality of data is not that good give out a good analysis.So if tomorrow, let's say Shaja wants a, you know, good analysis of the vessel, it's based and fully dependent on the data quality of that vessel that has come all these years- Mm-hmm.based on which I can give an analysis.So that's, that's one challenge, obviously, we have.So the technology as well as the data management is adapting to a lot of new validations so that all errors are kind of prevented from the ship level, which includes the training of the seafarer to also understand these are the important parameters where I, I do not take a chance, you know, fuel consumption.I have to be really sure before I start reporting.From the owner side, they have to invest in auto-sensing data, telemetry data.You see a major portion of the shipping industry has not even digitized or digitalized now, which is also a challenge.So I, I think, I mean, reflecting on data management is one part, but on a, on a very large scale, it is big strategic decisions which needs to be taken, you know.UETs is there, fuel use there, IMO GFI is there.These are decisions you are going to affect the sustainability of the company even.I mean, are you really sure that with this kind of policies in place, your company would sustain after 15 years because so much of regulatory costs are there?You might have to invest in Capex.Your operational expenditures are increasing because your ship manager is also having these challenges, so obviously they are also increasing their technical management fee.So I think the industry now needs tools-to understand where they are positioned in 2050.Mm-hmm.If you have not done the calculations now, then, um, and I think, you know, i- it's very difficult to talk about sustainability now, you know?So every- everything is now out in the open.You also have the calculation for IMO GFI.Yes, obviously, as you said, pooling has varying prices, but at least you have a picture of what you are going to pay in the next 10, 15 years.So I think this is all based on data.Mm-hmm.So that's the importance of the data.Data is the core from which all aspects start, you know?Mm-hmm.That's why I was saying it-it's, it's the new oil, let's say.It is interesting that you refer to like 10, 15 years.It feels that what used to be, okay, a decision like how do I operate my vessel today, this year, now is almost a long-term decision because you want to know the implications of that decision, even certain routes.You maybe decide to go to Africa, but now whoops, there's aAfrican country comes up with some version of ETS and carbon tax and, like, now that totally changes your decision in a short term as well.So how do you balance that? isolated fragmented regulation should be taken care by the charters if it is not a regular trade.But as, as a whole the ship owners, should push for new technologies and all.Everyone coming with a different set of regulations is not in the best interest of the industry.Mm-hmm.So we have to work together to form a common rules and regulations for this.Otherwise, it will be difficult- Mm-hmm.for the investors to make a deci- make decisions.Mm-hmm.And it's not only the particular price that you pay, let's say in Gabon versus EU, et cetera, right?It's not only I go there and then I pay 50 euro per ton of CO₂.It's also, what's that ton of CO₂ in Gabon versus the ton of CO₂ in EU?Right?Yeah.Because it originates from the fuel consumption, but the way it is calculated is based on the emission factors.And they can be totally different in the different regions.So going back to Anil's point that data is essential, Anil will have a hard time calculating all of these different emissions that have been created by the same ton of fuel that was consumed because if it's not aligned, as you said, then, you know, we will do this for every country if every country comes up with the idea 'cause everyone will haveThese guys will do greenhouse gas emissions, the other ones will do CO₂, one will do well-to-weight, the other one will do tank-to-weight.And, oh yes, we do different emission factors,So, I mean, for me, that's tricky to calculate.For a guy with 5 vessels who has a few people working on everything else-how do they know what, what needs to be calculated when, right?Back to ways of maybe monetizing the opportunity.How do you reflect on the industry's activities, let's say, after we've announced the FuelEU Index? Do you see the change? Can you reflect on the activities also over the summer? Are they learning from it? is it affecting anything at all? Yeah, I think it's, it's similar to what Anil said with the data.Because there's data now, people can start making decisions, right? And when, when we publish this index, then people were writing and saying, "Oh, the price is actually going up from the trades, so I need to make a decision now."Right?And before I can go out and tell them, "Look, the price is going up, et cetera, it will go up even further."But they will only make the decision if they truly trust me.But here, they don't need to trust me.They need to trust the data, and the data is there.And this data gives them the trust to make the decision and execute on it.And that's what we see also now with EU ETS being finalized, the data being there to start making decisions because then the people are actually actively engaging in the surplus trading.It's really interesting to see how you said that now the trust is moving from just a person and the words to, to the data, but the shipping industry relies so much on this concept of trust-between the 2 people, right?And again, back to cultural shifts, it's totally asking for a different type of thinking and behavior that is a byproduct of just a couple of regulations.Mm-hmm.And also industry has benefited from the trust or from one to another from the lack of data.So there are also many stakeholders that made businesses off of that, Yes. Intransparency, right? So can you reflect, maybe this is a question for all, how do you see this reacting to this now need to make things visible and accountable?From, our perspective, I mean, when we say that data is going to be a major factor, we also see the industry observing a lot on how the regulations are shaping up.So recently, I had a conversation with one of our clients, and I asked him that, "Uh, are you aware of this IMO GFI, which is almost like a fuel EU model?"And, "Yeah, yeah, we're waiting.We're waiting for the regulations."But he has 2 vessels which are going for dock the next year.The question is, these vessels' next docking will happen in 2032.By that time, GFI regulations have already come in, and he's most likely going to pay a penalty for not acting on the energy saving or any other methodologies which are there in the dry dock which is happening.So that's why strategizing on the data that's already available for you, which we actually provided him for the vessels.Mm-hmm.So I think that, I mean, tha- that's one of the verticals that we have is for the consultation aspect, where we, we tell them that this is the vessel data.This is speaking to you on your present condition, and what we kind of look at in the next 15 years is this, where, uh, there's a huge regulatory cost that you have to pay.What are you intending to do?Simple question.And they say, "Yeah, we are observing."But then when you observe you, you lose out on many opportunities, including that aspect.But I, um, um, as you correctly said, many companies see this as a great opportunity in making business.Um, but I think the, the people who act late have to pay a big price, for sure, because, penalties are not like small amounts.We've already discussed that.And, and so those, those kind of adaptive decisions needs to be taken, in, in my opinion.That's, that's how I see of it now.Mm-hmm.Shaja, you can also reflect.I, I, I think we have a lot of, ship owners who are waiting for placing new building orders, waiting for investing into techn- fuel-saving technologies, because n- nobody is clear the cost benefit of investing now.Mm-hmm.So, we see increasing averages of the ships we manage.They, most of the, present owners want to extend the life, so they give life extensions, repairs and all.Instead of in-investing in new ships, they want to extend the life of the ships.So, suddenly if some, the cost benefit goes out of favor, they can just scrap the vessels- Mm-hmm.and go for the new vessels.A lot of ship owners, traditional ship owners especially small to medium ship owners are waiting for where the industry is heading. Fuel technologies or which is the ammonia is feasible, or the LNG will be staying in the market after ten years.These are the things nobody know only big owners charter owners who operates and owns the ships invest at the present moment.So that essentially means that once there's this thought for clarity that everyone needs, then the, all the shipyard slots will be gone in a second.Ship, shipyards are now, now also full.Exactly.So, there will be a lot of run, I guess.Right.And, and this is based on, manual data, one could say, right?I mean-for people who have invested in telemetry long time back, they have little more clarity on the decisions because they don'tI mean, all this data is based on proper sensors on board, which have given the right amount of information.Most of the other owners are betting their data on you know, whatever has come all these years through manual reporting, which has been done on board, although they have the interfaces for it.But at least you have a, an idea, a fair- Mm-hmm.amount of idea.Yeah, I mean, um, going back to the question that you had, I think, like, all of us working, servicing the owners and the trust that the owners need to have in us doesn't go away.They still need to have trust in order to engage with us, and trust us to do the things and help- Mm-hmm.them with things.I just think that the data that is then there enables them to have this trust faster, easier.You know, it's underlying the reason why they trust in us- Mm-hmm.for that matter.Or the tools, yeah, that- Yes.come.Yes.Um, and also reflecting on the previous periods, quite a number of trades also involved small, shipping companies.Like, some of the first contracts we've had were from the small shipping companies with only a few vessels because some of them realize, okay, maybe I don't have a full picture, but there's a high, penalty and, like, quite impactful, , financial setback if things are done wrong.And then they were like, "Okay, let me do something to de-risk myself.And then throughout the year, I'll figure out if I can additionally get access to fuel or not. "But this was a good, like, initial move.And also, I will catch your part that they need a lot of handholding right now, and you saw also additional vertical for more of a consulting part of the business because of that, not even to support the use of platform as well, right?Right, right.We get now queries from some of the companies to act as a consultation service provider.Basically because, one is too many regulations coming in, so they want somebody to make it simple for them, for them to understand.Secondly, because we have a lot of data, they also want us to really look at the different energy efficiency technologies, ESDs, which are there, and what are the practical fuel-saving percentages, not what the vendor promises. so at least what we see in our fleet, what could be the percent.So obviously, one challenge always has been that in dry docks, there are a lot of measures taking place, you know, polishing pan- anti-polishing pans are there.Then you have also other, ESDs-ETs being installed.So it's a cumulative fuel saving which happens, not specific to that one.That, that's always a challenge because all these let's say, um, these installations are done in dry docks as opposed to. So it's a cumulative percent.So we are trying to do those permutations and combinations to co- come- make it kind of in a split level, you know.Okay, this anti-polishing pan we have seen across 50 vessels.And with all this permutation combination, this is generally the, let's say, guaranteed fuel percentage saving that you will have.Also based on the areas that they are trading.And, and that's another you know, service they want from us, that, "Okay, should we invest in this?"So they are asking for ESD, ET reports for vessels before the vessel's- Mm-hmm.going into docks.And I think the, um, let's say the opportunity for consultation is because regulations are shaping up and it's- it's this big journey towards 2050 that- that they want a thought partner with them who can actually guide and advise them on, you know, what is the best way toAnd, and, and that's why we are also now building a tool which is basically a cost estimator tool, which is going to take into account the regulatory cost, the fuel cost.and obviously the capex, which is the ESD EET cost. Mm-hmm.And then going to tell them that if you want to run the vessel for the next 15 years, this is the total expense that you have to count in, you know, and, and then look at a strategy toBecause sustainability is one thing but , you know, and, and, caring for the environment is what we all want, but a business runs for profitability and so- Mm-hmm.obviously that has to go much above the, you know, sustainability aspect. Mr. Shaja, do you have a reflection onto these points? Yeah we, we also give advice and consultancy to the ship owners when we pr- when we prepare the dry dock specification.For a normal dry dock, we put in proposal for the owners.so most of the owners are, adaptable for low capex, Mm-hmm measures, like you see, LEDs propeller paint- painting, regular, underwater cleaning.Mm-hmm. this, this all PBCF, these all easily, sellable.Mm-hmm.But if you, propose to like wind-assisted propulsion and all, then the capex- Mm-hmm.intensive.So adaption is on the, on the lower side. Mm-hmm.And how do you see that difference between the cost savings and efficiency that is promised versus real time?We have sufficient data for a fe- few of the things.So i- if you say i- air lubrication and all is not as promised, but PBCF and all if you op- there is a speed range, the efficiency is h- highest.The, if you operate in that range it's maybe close to that estimate, but when you go out, then it drastically changes.So we cannot predict this, maybe we can say average 50 to 60% what is, what is promised is what we get in the real time.Mm-hmm.Looking now towards the IMO Net 0 Framework, I don't like to speculate-but this is now the drum roll moment everyone is kind of counting down towards, mid-October whether to celebrate or cry.How does that affect the, let's say behavior towards FuelEU? Any lessons learned? I mean, of course shipping companies claim or have the idea and then they wait until there is a decision made on the IMO Net 0 Framework.And this idea comes from the fact that they assume that potentially then FuelEU is, um, scrapped, basically.Now, if you think about it, in following the correct processes then undergoing under the EU, then and this needs a legal process to be decided and so forth.So it will effectively not happen in October.And even if the IMO decides to agree on the IMO Net 0 Framework and the EU potentially considers removing FuelEU, it will take a long time.Most likely minimum until 2028 when IMO actually starts.So from that perspective, I don't think it's a considerable idea to wait until October to make any decision, because this year definitely you will need to be compliant.And also next year, um, it's, I think, absolutely reasonable to assume that you will need to be compliant with FuelEU.And so you should better, um, consider your first mover advantage rather than whether you want to wait until the IMO decides. generally speaking, it is of course, um, having 2 regulations at the same time, a regional and an international one, creates the same issue that we already discussed, because also at IMO level, the greenhouse gas emission factors will be different, ACV values are different, although, you know, it's the same ton of fuel.So again, you have the issue that you need to calculate what different regulations, what will be the exposure, and then on top, it's not only the emission calculation, it's also then the commercial calculation, right?Surplus under FuelEU has a value, surplus units at the IMO will have a value.So if all these things co-exist, then there's a lot of decision-making to be done.Um, and then also if you consider what already happens with regulations versus voluntary carbon markets, additionality, et cetera, um, then you can imagine what will happen if they had 2 regulatory markets where you can sell sort of your emission reductions, right?Mm-hmm.Um, so I think there are a lot of lessons to be learned from all these areas when deciding how to align or not align FuelEU and the IMO net0 framework, and we will have a lot of things to do in the upcoming years.So Max's message is buckle up.Um, would you have any suggestion, Oh, please.how to look towards it?Basically, interesting times as we, as we say.Lot of regulations coming in, so, um, that is going to keep us busy for sure.That is something that we know.But I think as Shaja was saying, I fully agree that there should be one framework, one rule, so that people can at least understand and, you know, agree to that even mentally- Mm-hmm.for being compliant.So, um, as I was saying, it's a very ambitious target.We have to go through it, and shipping being shipping, it's going to sustain as we call it, 85% of the world's cargo is done.So this, this industry is going to remain.They're very creative, yes.Yeah. And then, theWhen you say that a industry's going to remain, obviously, with the regulations coming in, this has to somehow be implemented.I'm, I'm coming back to the same thing.It's, it's time for decisions to be taken.Mm-hmm.Everything is set down, calculations are done.Re- And we know approximately what IMO GFI is going to come.We know the rules, we know the specific let's say, cappings every 5 years for FuelEU and every year for IMO GFI.It's very easy to make a full calculation and understand it use that as a tool for strategizing for your company.So I, I think it's interesting in terms of compliance, but also, um, need to see how the industries are responding to that.But we have to comply with that.That's, that's the truth at the end of the day.I think both will merge around, you are more lenient to 2008, '28, I think maybe '35.Because EU is more stringent.IMO is now more lenient, only 10% they are going to tax, at least up to '35. So, environmental, sin EU will push for more stringent and then they will merge maybe around '35 only.So you have to deal with the 2, 2 regulations till then.Mm-hmm.I wish it will be earlier, IEveryone was saying that this is the cheapest mode of transport, but with all these regulatory costs, I don't know what is the new normal.But obviously not withCompared to air.It will be more than the fuel cost.Yes, yes.Okay, so with that I think the closing remarks are we placed our bets into different years.But for sure, the industry should use the resources available, information available, to make decisions, at least for, to start this year and then next year.And, hopefully we can, promote alignment of different frameworks and regulations so that we don't have to do all this complex math in our heads thank you very much for being my colleagues today here at this round table discussion, and until the next time.Thank you.Thank you.Thank you.

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