EU’s FuelEU Maritime initiative to drive decarbonization

Concept,Or,Conceptual,Group,Of,Green,Forest,Tree,On,DryThe European Commission launched the initiative – FuelEU Maritime – which aims to increase the use of sustainable alternative fuels in European shipping and ports, in efforts to drive decarbonization and sustainability within the industry.

Accordingly, ships calling European ports will be required to source and operate on less carbon-intensive fuels under a new plan that actors across the board are warning will have major impacts while receiving insufficient attention.

This initiative will force shipowners to use fuels with lower carbon intensity, introduce an efficiency credits-trading system and impose zero emissions at berth for some ships, people with knowledge of the situation say.

This initiative – FuelEU Maritime – aims to increase the use of sustainable alternative fuels in European shipping and ports by addressing:

  • market barriers that hamper their use
  • uncertainty about which technical options are market-ready.

According to a paper launched by the EU, a shift to sustainable alternative fuels in maritime transport is critical to achieve a number of positive environmental effects:

  • Reduction of GHG emissions;
  • Reduction of local air pollution, especially in SOx, NOx and particulate matter;
  • Reduction of noise emissions as a result to greater use of alternatives instead of diesel generators for ships at berth;
  • The scope options will be carefully assessed also against the criteria of carbon leakage, especially with regards to the geographical application.

In addition, it is explained that the possible impact on administrative burden will depend on the policy option retained. It is however expected to minimize additional burden by using as much as possible existing EU frameworks for reporting, monitoring and verification of emissions as well as enforcement. It will be essential to ensure coherence with the existing legislation such as the sustainability requirements, definitions and methodologies set out for renewable fuels in the recast Renewable Energy Directive (EU) 2018/ 2001. Coherence with the EU Emissions Trading Scheme, revision of the Energy Taxation Directive and revision of the Alternative Fuels Infrastructure Directive must also be ensured.

This initiative is a separate from the EU push to include maritime into its carbon cap and trade system, the Emissions Trading System, which shipowners have largely accepted and are engaging with, despite some opposition.

Overall, the commission’s proposal, known as FuelEU Maritime, is led by the Directorate-General for Mobility and Transport and is expected to be published in March. The  push to include shipping in the carbon market, led by the Directorate General for Climate Action, is expected in June.

Concluding, the paper notes that

It is yet unclear as to which degree provisions will be included in the possible legal instrument would require an implementation plan. Should such a guidance be required for certain provisions, the Commission will envisage to adopt an implementation plan.

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