Understanding the regulatory status of LNG carriers using boil-off gas

The European Union’s MRV, EU ETS and FuelEU Maritime regulations aim to create a level playing field across the maritime industry in terms of emission reductions and emission trading. The stipulations related to LNG as ship fuel focus on vessels bunkering LNG, whereas LNG carriers using their own cargo as fuel are addressed only marginally. A September 2025 update to the EU guidanne doocument on FuelEU Maritime has clarified certain aspects but some open questions remain. 

Unique challenges for LNG carriers

“LNG carriers operating on the boil-off gas (BoG) that inevitably builds up in their cargo tanks face unique questions regarding the calculation of their greenhouse gas emissions: when more boil-off gas is generated than the ship needs for propulsion and power generation, it must be dealt with for safety reasons,” explains Martin Cartwright, Global Business Director for Gas Carriers & FSRUs at DNV. 

“Whatever BoG management option is chosen, it will increase the ship’s emissions. LNG carriers equipped with on-board reliquefaction equipment need extra fuel for this process. Vessels without such equipment must burn the excess gas in their gas combustion unit without benefiting from the energy content. This incinerated gas is considered as fuel gas burnt, and the resulting emissions are subject to emission charges unless the gas must be burnt as an emergency safety measure,” Cartwright emphasizes. 

Furthermore, a significant portion of the current LNG carrier fleet still consists of legacy gas or steam turbine-powered vessels, which have increasingly limited options. 

“There has been a perception among LNG carrier operators that these factors are causing undue emission costs putting their ship type at a disadvantage,” says Eirik Nyhus, Director Environment at DNV. “Since LNG carriers are themselves part of the natural gas value chain, rather than just bunkering LNG, operators feel their ships are indirectly being penalized by the current regulatory framework.”  

The discussion continues as to whether this is indeed the case, and if so, how the issue could be addressed, Nyhus continues. “As a neutral body, DNV is committed to providing as much well-founded information and clarity as possible to encourage a fact-based discourse and pave the way towards an equitable resolution that makes good environmental, and economic sense."

Prioritized allocation rewards the use of biofuel blends

Until recently, gas carriers planning to operate on a biofuel-and-BoG blend in future would have been unable to reap the full benefits of a using a greener fuel. “This has changed uner the FuelEU Maritime regulation, applied fully since 1 January 2025,” Nyhus notes. On voyages into and from EU waters, operators burning biofuel blends are now allowed to allocate the full amount of energy obtained from fuels with lower greenhouse gas (GHG) intensity – rather than just 50 per cent – to the total energy consumed by the ship on voyages subject to the FuelEU Maritime regulation. The same applies to other alternative energy sources (such as electricity). These provisions can reduce a ship’s annual GHG intensity while maximizing the benefit of using lower GHG-intensity energy, thereby encouraging the uptake of renewable, and low-carbon fuels. 

Addressing methane slip under FuelEU Maritime

Under FuelEU Maritime, the calculation of the well-to-wake (WTW) greenhouse gas intensity of certain fuels must account for methane slip (expressed in per cent of the mass of the fuel used by the engine, abbreviated Cslip). Annex II of the regulation specifies standard tank-to-wake (TtW) Cslip values for various fuels and  engine types. The new FuelEU guidance document explains how these values are to be used in well-to-wake emission calculations. 

Since methane slippage values are engine-specific, and since measures taken by operators to improve emission performance should be rewarded, FuelEU Maritime provides a pathway towards a calculation method that allows operators to diverge from the Annex II default Cslip values.

This is further described in the latest 'EU Guidelines for Reporting and Verification of Actual Methane Slip Tank-to-Wake Emission Factors from Marine Diesel Engines under the Scope of FuelEU Maritime Regulation', dated 28 October 2025. “This guidance, while somewhat complex, opens for onboard and shop testing to determine actual Cslip values,” adds Nyhus. While not legally binding, it is part of the series of guidance documents published by the Commission and thus provides the guidance necessary for stakeholders to apply when doing FuelEU Maritime calculations. 

IMO measurement standards still under development

The EU guidelines mentioned above also provide an update on the status of the IMO’s development of emission-measurement standards and procedures. The methane emissions from slipped fuel are to be based on the CsfCH₄ parameter, which represents the methane content of the respective fuel.

Ships using blended fuel should report each fuel separately. Precise fuel consumption monitoring using either custody transfer measurement systems (CTMS) or on-board flow meters will be essential to determine emissions and methane slip accurately. It should be noted that ships consuming boil-off gas may subtract the nitrogen mass content from LNG consumption for each laden voyage.

Well-to-tank GHG intensity factor requires further discussion

An important concept in the FuelEU Maritime regulation, as well as the IMO Net-Zero Framework (NZF), is the well-to-tank GHG intensity factor, which accounts for the upstream carbon-equivalent emissions from fuel production, processing, pipeline transport, liquefaction, transport by LNG carrier, and LNG terminal operations including bunkering. Each one of these steps is assigned an emission factor in grams of CO2-equivalent per megajoule (gCO2-eq/MJ). 

It has been argued that since LNG carriers take on their cargo – which is also their fuel – directly at LNG production and export terminals, the last steps of the WtT value chain described above – transport by LNG carrier and LNG terminal/bunkering operations – do not apply, and that these WtT intensity component factors should therefore not count towards the total factor. Proponents of this view further point out that as a constituent part of the LNG value chain, LNG carriers should benefit from lower WtT values than ships that simply bunker LNG. While LNG carrier operators are not directly penalized under the current regulation, due to their current over-compliance. This could be seen as undervalued as they build up a surplus compliance balance for EU allowance borrowing and banking purposes. DNV believes that this issue merits further analysis and discussion at both, the EU and IMO levels. 

“A definitive well-to-tank factor for LNG use in general has yet to be set by the IMO. Proposed values range from just over 14 to as high as 33 gCO2-eq/MJ. The United Nations’ Joint Group of Experts on the Scientific Aspects of Marine Enivornmental Protection (GESAMP) is expected to submit a related proposal to MEPC 84 in April 2026 for negotiation and resolution,” Nyhus concludes.