Still time to rectify ‘disastrous’ EU shipping policy, says T&E

June 29, 2021

An EU attempt to promote alternative sustainable fuels for ships would actually lock in the use of fossil fuels for decades, according to leaked documents obtained by T&E.

The NGO described the draft ‘Fuel EU Maritime’ law, which does not provide incentives to invest in e-fuels but promotes liquified natural gas (LNG) and biofuels as an alternative to marine fuel oil, as an environmental disaster.

But with the law due to be published on 14 July, there is still time to rectify this by excluding LNG and crop-based biofuels and support the uptake of green e-fuels like renewable hydrogen and ammonia, says the group.

“It’s not too late to save the world’s first green shipping fuel mandate”, said Delphine Gozillon, shipping policy officer at T&E. “It’s crucial that we have a law that incentivises the uptake of e-fuels. The current draft pits e-fuels against much cheaper polluting fuels, giving them no chance at all to compete on price. The EU should revise the draft to include an e-fuels mandate and make them more cost-attractive through super credits.”

The Commission should propose that half of the greenhouse gas intensity target set by the law should be met by using green e-fuels, thus creating a market for producers of the new technology. The Commission should also help expensive e-fuels become more cost-competitive by counting five times every one-gram carbon intensity improvement achieved by using these green fuels onboard. These multipliers have worked well to push electric cars under CO2 standards; in shipping, they would make it more cost-attractive for ship operators to invest in an e-fuel-powered ship than blending biodiesel in existing fuel oil ships.

T&E also advises that the operators of ships with e-fuels should get additional rewards by being able to sell credits when they overcomply to other ship operators. This would only work if benefits of excess credits are limited to e-fuels ships, which is an approach not taken in the draft text.

The draft policy seen by T&E reveals the European Commission has rejected requiring specific green fuels to be used by shipowners. It has instead gone for a simple “greenhouse gas intensity target”, which it claims provides more flexibility. But, as noted by T&E, the target alone offers no incentives for green hydrogen and ammonia, which are the few truly sustainable fuels currently available at scale.

The measure would use ship fleets’ average carbon intensity in 2020 as a reference value to be progressively lowered, from a 2 percent reduction by 2025 and a 6 percent cut by 2030 to a 75 percent cut by 2050.

But T&E has warned that by not excluding LNG and crop-based biofuels, which are high emitting, it would simply shift emissions from fuel oil today, to fossil gas and dubious biofuels tomorrow.


More than half (55%) of the energy used by ships calling at EU ports could be LNG and biofuels by 2035, according to T&E’s analysis. This is despite LNG offering minimal emissions reductions and, when burned, releasing methane – a global warming gas up to 36 times more potent than CO2. Most biofuels are worse for the climate than the fuels they replace, and those that do offer emissions savings are not available at scale.

As reported in the Guardian, of the 136 responses to a consultation, 121 were either shipowners or ship managers, energy producers and fuel suppliers, short sea shipping companies, shipbuilding and marine equipment manufacturers or logistics suppliers, shippers and cargo owners.

Delphine Gozillon concluded: “As it stands, the draft law is far not fit for Europe’s climate objectives. But quick fixes are still possible, with strong safeguards against unsustainable fuels and dedicated tools to kick start e-fuels in shipping.”

The Commission is due to publish the initiative on July 14 as a part of its Fit for 55 package, aimed at achieving the bloc’s target of cutting emissions by 55 percent by 2030.

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