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T&E: FuelEU Maritime policy lacks predictability for deployment of green e-fuels

16 Mar 2022

The current EU proposal for shipping, called “FuelEU Maritime” does not give enough predictability for green e-fuels to be deployed on the market, concludes a breakout session from the recent Acting now for the zero-emissions planes and ships of tomorrow online event organised by Transport & Environment (T&E).

FuelEU Maritime, part of 13 proposals introduced under the ‘Fit for 55’ package, is a greenhouse gas (GHG) policy concept that sets a limit on the overall lifecycle GHG intensity of fuels.

Shipping industry representatives have objected to the FuelEU approach because it puts the onus on shipping companies to comply and source for compliant fuels; arguing that requirement should be put on marine fuel suppliers to make renewable and low carbon fuels available.

The breakout group dedicated to zero-emission shipping discussed the challenges of decarbonising the industry and the need to scale up sustainable fuels.

As an operational expenditure (OPEX) of zero-emission shipping far outweighs the capital expenditure (CAPEX), shipping companies do not only need policy support for the installation of new technologies, but also for fuel costs, it finds.

“Instead of supporting these new fuels, FuelEU risks locking in even greater gas demand. That was a bad policy even before Russia’s invasion of Ukraine, but it’s an even more disastrous one now,” states T&E.

“That’s why investing in LNG infrastructure is in no way a clean long-term solution, as we have outlined in another briefing.

“Continuing polluting fuels from the past or facilitating the transition to a clean future without LNG but renewable e-fuels is not a choice. It is rather imperative to not produce sunk costs with technologies that will soon be outdated and too expensive seeing higher carbon prices.”

According to T&E, more emphasis should be put to reduce fuel consumption, which could be achieved by mandating zero-emission berths and supporting wind sails technologies.

Actors are already working on greening the maritime sector, by developing and implementing new solutions at scale:

  • The European Green Hydrogen Acceleration Center (EGHAC) is a consortium that aims to accelerate green hydrogen fuels projects by supporting the build-up of a supply chain.
  • MAN ES is a leading European manufacturer of ship engines that plans on delivering ammonia and methanol engines in the next few years.
  • LMG Marin is a naval engineering company active in Norway, France, and Poland, that has already delivered several hydrogen ship projects.
  • Madoqua is involved in projects of supply of hydrogen, methanol, and ammonia to main ports in Portugal.

The solutions presented by speakers at the online event demonstrated that zero-emission shipping is already happening and will only accelerate in the years to come, says T&E.

Last but not least, the availability of supply and refuelling infrastructure in ports are crucial for investment decisions in zero-emission ships. And in order to secure all this, legislative action is key.

The FuelEU policy has received criticism from several associations since its introduction; a record of feedback from other parties is as follows:

Related: Proposed FuelEU Maritime proposal ‘not fit for purpose’ in current form, says shipping association
Related: WSC: FuelEU can do more for the decarbonisation of shipping – in the EU and internationally
Related: ECSA: Members support uptake of clean fuels but highlight FuelEU enforcement loopholes
Related: EU “Fit for 55” package ineffective, believes Cyprus Chamber of Shipping
Related: IBIA: Fuel EU Maritime, EU ETS and bunker tax proposals raise many questions
Related: ECSA: EC “Fit for 55” package offers lack of consistency among other climate proposals
Related: T&E: EU push to green shipping is positive but risks locking in fossil gas
Related: LEAKED: EU’s supposedly ‘green’ shipping law will lock in fossil fuels, says T&E

 

Photo credit and source: Chris Pagan on Unsplash
Published: 16 March, 2022

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