How ship operational CO2 standards can drive green fuels uptake

Shipping’s decarbonisation requires sustainable zero-carbon energy/fuels. These fuels are considerably more expensive than fossil fuels and require new port bunkering infrastructure. This briefing outlines the well-designed and stringent regulation that would be needed for ships to adopt them.

Operational CO2 standards (a.k.a. goal-based mechanisms) present an effective regulatory tool to drive the tech/fuel uptake at the EU level. Such standards can be implemented using EU MRV and enforced via port-state control. This would, on the one hand, allow each ship flexibility to improve its energy efficiency (e.g. slow steaming, wind-assist), and choose the most appropriate technology (e.g. battery for ferries, while liquid hydrogen for small/mid-size vessels, ammonia for the largest) to fit its operational profile. On the other hand, this would send a demand signal to potential tech/fuels suppliers. A sub-target could also be considered, with enough lead-time, to be achieved specifically by the uptake of sustainable zero-carbon e-fuels/energy. The standard should be expressed in CO2 equivalent terms and include methane. To ensure environmental sustainability, crop-based biofuels and alternative fossil fuels must not count towards carbon intensity improvements. The contribution of advanced biofuels could be excluded too or be capped at X% (e.g. 1%) of fuel consumption/carbon intensity improvement.

Prescriptive fuel blending mandates present high risks for environmental sustainability and technology lock-in. Such mandates would drive in biofuels, which due to limited bio-feedstock cannot be scaled up. Most biofuels are more damaging than fossil fuels. Furthermore, given that sustainable and unsustainable biofuels would have similar physical properties, and that ships can easily bunker outside the EU, it would be virtually impossible to enforce sustainable compliance with blending mandates. Most importantly, blending mandates would disadvantage sustainable alternatives such as green hydrogen and ammonia as they cannot be physically blended into current marine fuels, hence undermining the deployment of the EU’s Hydrogen Strategy in shipping. We recommend against EU fuel blending mandates. Text faces or Lenny faces describe emotions just like emojis. Browse these unicode character strings in the gallery.