How to drive the uptake of sustainable fuels in European shipping

In July 2021, the European Commission proposed the first-ever legislative initiative requiring ships to progressively switch to alternative marine fuels. Out of the four proposals addressing shipping in the EUʼs so-called Fit-for-55 Package, the FuelEU Maritime, if implemented correctly, has the highest potential to put the sector on track to decarbonisation by 2050.

The proposed regulation has a unique design: a goal-based GHG intensity target that increases in stringency over time, requiring ship operators to reduce the carbon footprint of the energy used onboard ships. It is expressed in Well-to-Wake (WTW) CO 2 -equivalent emissions to account for all the life-cycle GHG emissions (CO 2 , CH 4 and N 2 O) of the different fuels and relevant engine technologies.

However, T&E had warned that the simple goal-based (i.e. technology neutral) target envisioned in the draft proposal would likely result in the acceleration of fossil natural gas uptake as the  cheapest alternative fuel eligible until 2040, as well as biofuels from dubious origin. T&E’s report provides an update of the T&E analysis following the publication of the final Commission proposal.