Business

€24bn in fossil fuel subsidies ‘a perverse incentive’ for shipping pollution

‘No ethical or environmental grounds for treating the shipping industry more leniently than road transport.’

Published

7 years ago

October 2, 2019

Admin

Europe's leading clean transport campaign group Transport & Environment (T&E) on Tuesday (1 October) published a paper which estimates the EU giving more than EURO 24 billion per year in subsidies to maritime sector in the form of fossil fuel tax exemptions under the European Energy Tax Directive (ETD) and national tax legislation.

T&E believes there are no ethical or environmental grounds to treat the maritime industry more leniently in European environmental regulation. In the context of the continent’s climate objectives, this is not only an anachronism but also a perverse incentive for climate pollution.

The organisation’s full statement on the development is as follows:

One of the most polluting forms of transport is benefiting from what is effectively a fossil fuel subsidy of €24 billion a year, according to a new report by T&E. Shipping, which still runs largely on dirty heavy fuel oil, is outright exempt from energy taxes under the EU’s Energy Tax Directive (ETD). T&E described it as ‘a perverse incentive for climate pollution’ and recommended including shipping in the EU emissions trading system (ETS) to end this historical anachronism.

Shipping has not only survived, but also boomed in an era of aviation and high-speed rail largely because of the enormous cost savings it offers companies which transport consumer products and heavy goods. This is largely due to cheap and untaxed maritime fuel and a total lack of climate regulation in the sector. Shipping fuel – heavy fuel oil – is not only the cheapest fuel on the planet, but also the dirtiest one. It emits large quantities of sulphur and other pollutants, as well as greenhouse gases. As a result, shipping is now recognised as one of the dirtiest means of freight transport.

By signing the Paris agreement, the EU committed to ‘economy wide’ decarbonisation efforts; as the only sector that is not yet subject to mandatory CO2 reduction measures in Europe, international shipping stands in the way of the EU fulfilling its Paris commitment. Due to this and the dysfunctionality of the International Maritime Organisation (IMO) in regulating the sector, sea-borne transport is likely to become a big issue for the 2019-2024 term of the European Commission. And with the nominees for the new Commission due to have their hearings over the next couple of weeks, T&E is attempting to force maritime transport’s environmental performance up the EU agenda.

Its study on fossil fuel tax breaks for international shipping in the EU highlights the subsidies ship owners enjoy via tax exemptions. Article 14 of the ETD bans taxation of maritime fuel when sold to ships on EU territory. So, while a tonne of CO2 from a ship makes the same contribution to global warming as a tonne of CO2 from a diesel trucks, the diesel owner pays energy tax while the ship owner avoids it.

Based on marine fuel deliveries and national diesel tax rates in the EU’s 28 member states, T&E has calculated the total unpaid energy tax under the ETD shipping exemption as €24 billion. The biggest beneficiary is the Netherlands with just over €6 billion in lost tax from its approximately 12 million tonnes of maritime fuel sales, followed by Belgium with €4.5 billion Not surprisingly, landlocked countries and those with short coastlines come further down the list.

The obvious way to combat these invisible subsidies would be to remove the Article 14 exemption from the ETD, but this would need unanimity among all 28 member states. Also, even if the ban was lifted, it would still be up to individual member states whether tax the marine fuel or not. T&E therefore recommends shipping be included in the EU ETS, which would be easier to achieve as it would only require a majority vote.

T&E’s shipping manager, Faig Abbasov, said: ‘There are no ethical or environmental grounds for treating the shipping industry more leniently than road transport. We believe the right way of removing current subsidies is through emissions trading, and we note that the incoming Commission president Ursula von der Leyen has committed to deliver this. Including shipping in the ETS would generate some €3.6 billion a year with the current ETS CO2 price of €26 per allowance, and a CO2 multiplier could boost revenues still further. Given the EU’s climate commitments, the current situation is not only an anachronism but also a perverse incentive for climate pollution.’

T&E’s study also looks at the likely impact of including shipping in the ETS on the cost of some consumer goods typically transported by sea – bananas, iPads, a kilogram of grain. Even with a €50/tonne charge for CO2 which is passed on to the consumer, the impact on final prices would be less than €0.01 per item.

The EU’s shipping sector is responsible for around 140 million tonnes of CO2 emissions a year, larger than the total national emissions of the bottom 20 EU member states (individually). This figure is expected to grow in coming years.

Source: Transport & Environment
Published: 2 October, 2019

Biofuel

Petrochina International blends over 30,000 mt of marine biofuel since March

Company has been developing marine biofuel blending operations at China (Zhejiang) Pilot Free Trade Zone, leveraging storage and logistics facilities at its Aoshan base.

Published

2 hours ago

September 21, 2026

Admin

Zhoushan completes China’s first batch of marine biofuel blending under pilot programme

Petrochina International Co Ltd recently said it has blended more than 30,000 metric tonnes (mt) mt of biofuel since completing the country’s first biofuel marine fuel blending operation on 13 March.

The company said the milestone demonstrates its ability to conduct continuous and large-scale biofuel marine fuel blending operations.

The company has been developing marine biofuel blending operations at China (Zhejiang) Pilot Free Trade Zone, leveraging storage and logistics facilities at its Aoshan base.

Its latest product, B24 marine fuel containing 24% biofuel component, meets relevant International Maritime Organization (IMO) requirements and marine fuel standards, according to the company. It said the product can be supplied for bunkering vessels operating on international routes.

It has used its global trading network to secure feedstock supplies and support cost control and supply security for the blending operations, it added.

The company said the large-scale blending of its marine biofuel products marks a development in China’s marine biofuel blending market.

It plans to work with upstream and downstream businesses within its group to support the development of Zhoushan Port as a major bonded marine fuel bunkering hub and contribute to its parent group’s transition towards lower-carbon energy.

Manifold Times previously reported China (Zhejiang) Pilot Free Trade Zone launching the first pilot programme for marine biofuel blending in China with the completion of the first batch of B24-HSFO.

The launch was marked with the blending of 2,000 mt of biodiesel and 6,300 mt of high sulphur fuel oil (HSFO) in storage tank F-02 of Sinochem-Xingzhong Oil Staging (Zhoushan), producing 8,300 mt of B24-HSFO.

Manifold Times also reported the first cross-regional bonded bunkering operation of blended biofuel in East China was successfully completed at the Meishan Port Area of Ningbo-Zhoushan Port.

The B24-HSFO used in the bunkering operation was supplied by the Aoshan Petroleum Base in Zhoushan from the first pilot programme for marine biofuel blending in China.

Photo credit: Sinochem-Xingzhong Oil Staging (Zhoushan)
Published: 21 September, 2026

Winding up

Singapore: Final general meetings scheduled for Dromond Shipping, related firms

A member is entitled to attend the meetings and should notify the liquidators’ team office via email no later than 48 hours prior to the meeting.

Published

2 hours ago

September 21, 2026

Admin

The final general meetings of Dromond Shipping Pte Ltd and related companies have been scheduled to take place on 19 October, according to the company’s liquidator on a notice posted on Friday (18 September) on the Government Gazette.

The other companies are Tidewater Emergency Response Services Pte Ltd, Tidewater Production Solutions Pte Ltd and Tidewater Salvage Pte Ltd.

The final general meetings of the members of the companies will be held via electronic means on 19 October 2026 at 2.00 pm, 2.30 pm, 3.00 pm and 3.30 pm (Singapore time), respectively.

The meetings are being held for the purpose of having accounts laid before the members showing the manner in which the winding up of the respective companies has been conducted and how the property of the respective companies has been disposed of and to hear any explanation that may be given by the liquidators.

The details of the liquidator is as follows:

Tan Kim Han
Joint and Several Liquidators
137 Amoy Street, #02-03, Far East Square
Singapore 049965

Note: A member is entitled to attend the above meeting and should notify the Liquidators’ team office via email to [email protected] or [email protected] no later than 48 hours prior to the meeting.

Photo credit: steve pb from Pixabay
Published: 21 September, 2026

Ammonia

NYK wraps up first STS ammonia bunkering operation in Japan

Ammonia fuel was transferred from the ammonia carrier “Shoei Maru” via the STS method to an ammonia-fuelled medium gas carrier, scheduled for delivery in November 2026.

Published

2 hours ago

September 21, 2026

Admin

NYK wraps up first STS ammonia bunkering operation in Japan

NYK Line, on Thursday (17 September) with Japan Marine United Corporation, Nihon Shipyard Co Ltd, Mitsubishi Gas Chemical Company, and Kokuka Sangyo Co Ltd, has completed the world’s first ship-to-ship (STS) ammonia bunkering operation to an ammonia-fuelled vessel.

At a quay within Japan Marine United Corporation’s Ariake Shipyard, ammonia fuel was transferred from the ammonia carrier Shoei Maru via the STS method to an ammonia-fuelled medium gas carrier (AFMGC) scheduled for delivery in November 2026.

The operation was conducted in preparation for sea trials of the AFMGC using fuel ammonia.

“This achievement represents an important initiative that has put into practice an operation essential for the future practical deployment of ammonia-fuelled vessels,” the company said.

The bunkering operation was conducted following extensive discussions among the companies involved. Safe operating procedures and work processes were established prior to the operation, enabling the transfer to be completed safely. Through this initiative, we have accumulated practical insights regarding safe fuel supply operations.

This operation serves as a pioneering example of the fuel-supply framework that will be required for the widespread adoption of ammonia-fuelled vessels.

The AFMGC is currently in the final stage of construction and is scheduled for delivery in November 2026.

“The successful completion of this operation marks a significant milestone toward the broader commercial use of fuel ammonia and the practical deployment of ammonia-fuelled vessels. It also represents an important step forward in establishing an ammonia supply chain,” the company added.

Photo credit: NYK
Published: 21 September, 2026