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Will FuelEU Maritime deliver on decarbonisation?

Policymakers should introduce dedicated quotas and incentives to boost demand for hydrogen-based shipping fuels.

The FuelEU Maritime regulation was put forward by the European Commission in July 2021 as part of its “Fit for 55” package. Together with four other legislative proposals, it seeks to steer the EU maritime sector towards decarbonisation.

But the inclusion of fossil gas (LNG) in the Commission’s FuelEU Maritime proposal is incompatible with the recommendations of the latest report by the Intergovernmental Panel on Climate Change (IPPC), writes Faig Abbasov from Transport & Environment (T&E) in an article in Euractiv.

According to a recent T&E study, fossil gas will make up nearly a quarter of the total energy used for EU shipping by 2030, as misguided EU sustainability targets encourage an uptake of LNG. This will lock-in fossil fuel use for decades while bringing limited benefits to the climate.

Faig Abbasov: “As an essential part of Europe’s economy, maritime transport must contribute its fair share to the continent’s decarbonisation and transition away from dependence on fossil energy. Promoting fossil LNG goes against any common sense, geopolitically and environmentally.”

In brief, the Commission’s FuelEU Maritime proposal seeks to drive the uptake of low-carbon fuels by introducing limits on the carbon intensity of the energy used on board ships and mandates the use of onshore power supply (OPS) in EU ports.

A briefing from the European Parliament concludes that the proposal aims to reduce the annual average GHG intensity of energy used on board in three steps, starting from 2025 with a modest 2 per cent improvement compared to a 2020 baseline. However, the requirements would get increasingly stringent over time, with a 6 per cent improvement required by 2030 and a 75 per cent cut by 2050.

The requirements would apply to all the energy used on board a ship in or between EU ports, but to only 50 per cent of the energy used by ships arriving at or departing from EU ports on voyages to third countries. They would apply to most big commercial vessels (above 5,000 gross tonnes, GT), regardless of flag. T&E has estimated that using this size limit exempts 19.7 Mt of emissions from vessels below the 5,000 GT threshold, and therefore suggests lowering the size limit to 400 GT.

The geographical scope is the same as in the proposed EU-ETS extension, but the FuelEU Maritime proposal applies a full lifecycle approach to determine CO₂ emission equivalents (including methane and nitrous oxide) from the energy used.

Regarding OPS, from January 2030 container and passenger ships staying at EU ports for more than two hours will have to connect to a shore-side electricity supply and use this electricity for all energy needs while at berth, unless they use zero-emission technologies. However, exemptions would be allowed until 2034. It should be noted that the proposed OPS mandate is limited to passenger and container ships, which according to calculations by T&E leaves out more than half of EU emissions at berth, i.e. 5 Mt of CO₂ and 3 kt of sulphur dioxide per year.

Non-compliance with both the fuel standards and with the OPS requirements will result in harmonised penalties, and the money collected will feed into the EU’s Innovation Fund and help finance the production of renewable maritime fuels and other greening activities in the maritime sector.

In contrast to recent conclusions made by the IPCC on the need to halve greenhouse gas emissions by 2030 and achieve full decarbonisation by 2050, the Commission proposal aims to achieve just 75 per cent decarbonisation of shipping by 2050 with no significant emission cuts during the current decade.

The IPCC report also states that fossil gas is inadequate to deliver stringent decarbonisation in shipping. Instead it recommends promoting hydrogen-based alternative fuels, including ammonia and other synthetic fuels for shipping.

Delphine Gozillon, sustainable shipping officer at T&E, said: “Europe’s policymakers should introduce dedicated quotas and incentives to boost demand for hydrogen-based fuels. Genuinely clean solutions do exist, but currently they are expensive. If we kick start demand now, a green shipping future is possible. Continue to waste precious time on fossil gas and it will start to look impossible.”

The proposed FuelEU Maritime legislation is currently under discussion in the European Parliament and the Council. A vote in Parliament’s Transport Committee (TRAN) is scheduled for July and a vote in the Plenary could take place in September, which means that a final text could be adopted in autumn 2022.

Christer Ågren

Sources:
Sustainable maritime fuels “Fit for 55” package: The FuelEU Maritime proposal (April 2022). European Parliament Briefing 698808. Link: https://www.europarl.europa.eu/RegData/etudes/BRIE/2021/698808/EPRS_BRI(2021)698808_EN.pdf
How the IPCC report contradicts the EU’s vision on shipping (20 April 2022). Euractiv. Link: https://www.euractiv.com/section/shipping/opinion/how-the-ipcc-report-co...
IPCC AR6 – Summary for policymakers. (April 2022). Link: https://www.ipcc.ch/2022/04/04/ipcc-ar6-wgiii-pressrelease/
EUFuel Maritime – T&E recommendations for driving the uptake of sustainable and scalable marine fuels (February 2022). Transport & Environment Policy Briefing. Link: https://www.transportenvironment.org/discover/the-eus-fuel-maritime-prop...
Proposal for a regulation of the European Parliament and of the Council on the use of renewable and low-carbon fuels in maritime transport and amending Directive 2009/16/EC (COM/2021/562 final) (July 2021). European Commission. Link: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0562&...

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