23 March (Lloyd's List) - THE European Union has reached a provisional agreement to set a 2% sub-quota for renewable marine fuels from 2034.
The deal under the FuelEU Maritime proposal confirms a multiplier of two to reward shipowners who use renewable fuels of non-biological origin from 2025-2034 and it sets a 2% target for usage of these fuels from 2034, if the European Commission reports that in 2030 renewable fuels amount to less than 1% in fuel mix.
Lawmakers agreed to mandate shipping to reduce greenhouse gas intensity for onboard energy use by 2% from 2025, 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045 and 80% from 2050, according to a statement. The reduction targets are all against 2008 levels.
The agreement “sets out by far the world’s most ambitious path to maritime decarbonisation”, said Jörgen Warborn, rapporteur at the European Parliament. “No other global power has drafted such a comprehensive framework to tackle maritime emissions. This is truly groundbreaking.”
Transport & Environment shipping programme director Faig Abbasov described the deal as “historic”.
“Ships travelling to, from, and within Europe will be required to increasingly run on green fuels, including green hydrogen-based fuels,” he said in a LinkedIn post. “Still lots of loopholes to fix and gaps to fill, but this decision marks a Tesla-moment for shipping’s technological transition.”
The new targets will apply to ships above 5,000 gt and to all energy used on board in or between EU ports, as well as to 50% of energy used on voyages where the departure or arrival port is outside of the bloc or in EU outermost regions.
The deal needs to be approved by the Council Committee of Permanent Representatives and Parliament’s Transport and Tourism Committee, and then the parliament and council.
The European Commission set out rules last month that suggest it will consider hydrogen produced with renewable electricity as renewable liquid and gaseous fuels of non-biological origin, known as RFNBOs, as well as other green hydrogen-derived e-fuels, such as ammonia and methanol.
The agreement follows negotiations between Europe’s parliament, commission and council which started last month. FuelEU Maritime is part of the EU’s Fit for 55 package.
Sotiris Raptis, secretary general of the European Community Shipowners’ Association, said it was “step in the right direction”.
“We were hoping to see tangible obligations for fuel suppliers in the package, but it is already positive their role is recognised in the text for the first time,” he told Lloyd’s List.
“Nevertheless, this is a welcome text when put into context with the upcoming revision of the Renewable Energy Directive, which will most likely introduce binding targets for marine fuel suppliers.”
The commission has proposed to revise the Renewable Energy Directive with more ambitious overall targets as well as an obligation for fuel suppliers to ensure renewable marine fuel is available.
EU bodies are currently negotiating the commission’s proposal and industry sources expect them to produce a text in the coming weeks.
Another key set of EU legislation for the shipping industry is its inclusion in the Emissions Trading Scheme from next year, as it will push up costs for vessels operating in or between EU ports.
New rules will likely increase demand for alternative fuels in the coming years. Biofuel producers may try to take advantage of this push from the EU. Renewable waste-based and advance biodiesel achieves more than 90% greenhouse gas emissions reductions compared with fossil fuels, according to the European Waste Based and Advanced Biofuels Association.
“Our industry stands ready to significantly increase deliveries to the shipping sector to achieve the new ambitious EU maritime decarbonisation objectives,” the association’s general secretary Angel Alvarez Alberdi said in a statement.
Shipowners will have to switch to hydrogen or derived fuels such as green ammonia and green methanol to comply with EU regulations after 2034.
The EU has intensified efforts to support low-emission technologies, as industry watchers point to competition between the bloc and the US after the latter launched the Inflation Reduction Act. It is targeting 10m tonnes of local production of renewable hydrogen by 2030 as well as 10m tonnes of imports by the same date. It will set up a hydrogen bank under the Net-Zero Industry Act launched this month.
