The European Commission should address fuel suppliers by introducing sub-targets to make low- and zero carbon fuels available for shipping and by increasing the multiplier for renewable fuels used in the maritime sector under the Renewable Energy Directive (RED). A fuel standard as a requirement for ships instead of fuel suppliers under the FuelEU Maritime proposal would risk failing to deliver emissions reductions and would be challenging to enforce. If a Market Based Measure (MBM) is introduced, a fund could invest the revenues to support the uptake of these fuels.
A global approach must be the cornerstone of the EU’s policies and any regional measures would risk undermining the international negotiations at the IMO level. As the shipping industry is fully committed to decarbonisation, success hinges primarily on the introduction of zero- or low-emission, safe and widely available alternative fuels, which do not yet exist. ECSA advocates a two-pronged approach if any EU measures are to be introduced:
- Establish a fund under an MBM and using the revenues to finance R&D projects and to bridge the price gap between new and conventional fuels; At the same time,
- Incentivise and require fuel suppliers to include a certain percentage of low- and zero carbon fuels in their offering by introducing sub-targets and a higher multiplier for low- and zero-carbon fuels under RED.
“Introducing the right incentives and requirements for fuel suppliers in order to make low- and zero-carbon fuels for shipping available in the market is a prerequisite for the decarbonisation of the sector. As with the uptake of all new fuels, the chicken-and-egg dilemma can only be addressed by the introduction of appropriate requirements for fuel suppliers. A fund under an MBM could support the uptake of these fuels,” said Martin Dorsman, ECSA Secretary-General.
A fund under an EU MBM would also minimise the administrative burden for the sector and would make sure that all revenues are invested in its energy transition.
Mr Dorsman continued:
“A fuel standard should be geared towards fuel suppliers and not ships, which are merely the fuel users. This is especially relevant and should be taken into account by the European Commission under the upcoming FuelEU Maritime proposal. We are quite concerned that should the FuelEU Maritime put forward a fuel standard as a requirement for ships, such a measure would seriously disrupt the bunkering market and would be challenging to enforce. More importantly, it would fail to incentivise energy efficiency improvements, be they technical (wind propulsion assistance, heat recovery system, hull and propeller optimization etc.) or operational (route optimization, slow steaming etc.).”
ECSA submitted the position of the European shipping sector to the public consultation of the European Commission on the revision of the EU ETS and the Renewable Energy Directive.
For more information:
- ECSA’s framework conditions
- Presentation of ECSA’s framework conditions
- ECSA’s submission to RED consultation