EU reaches deal on FuelEU Maritime rules, with clause to ensure renewable fuels use 

The European Union’s (EU) protracted debate over regulations covering shipping emissions both within and outside of European waters are within sight of final ratification after the Parliament and Council struck a provisional deal on the so-called FuelEU Maritime initiative.

The final version of the regulatory text will see ships required to gradually reduce greenhouse gas (GHG) emissions by curbing GHG intensity -- measured in grams of CO2/megaJoule (MJ) of energy -- by 2% as of 2025, 6% by 2030, 14.5% by 2035, 31% by 2040, 62% by 2045 and 80% by 2050. 

As the regulation stands, the GHG cuts will apply to ships above 5,000 gt and "to all energy used on board in or betweeen EU ports, as well as to 50% of energy used on voyages where the departure or arrival port is outside of the EU or in EU outermost regions," a statement from the EU Parliament said.

In the terms of the provisional agreement, members of the European Parliament (MEPs) included a review of the rules by 2028 "to decide whether to extend emission-cutting requirements to smaller ships or to increase the share of the energy used by ships coming from non-EU countries. 

Shipowners who use renewable liquid and gaseous fuels of non-biological origin (RFNBOs) between 2025 and 2034 will receive more emissions offset credits than those who do not.

RNFBOs are a product group of renewable fuels defined in the EU’s Renewable Energy Directive. They are fuels that are produced from renewable energy sources excluding biomass and include hydrogen and hydrogen-derived fuels.

The deal also set a ratcheting clause that would see the introduction of a 2% renewable fuels usage target for shipping implemented by 2034 if a 2031 EU Commission review finds that RFNBO use amounts to lower than 1% of shipping’s overall fuel mix within the EU.

Container ships and passenger ships will be required to use shore-based power supplies "while moored at the quayside in major EU ports as of 2030," according to the agreement. These requirements will be rolled out to all other EU ports with shore power facilities by 2035. The exceptions are a less-than two hour port call, a vessel’s use of its own non-emitting power supply and emergency or unforeseen port calls.

Reacting to the deal, the European Community Shipowners’ Associations said "European shipowners welcome the climate ambition of the new Regulation and consider it as an essential stepping stone towards establishing the right conditions for the energy transition of shipping. The agreement gives a strong political signal and provides clear climate targets and guidance for the industry as regards the fuels that may be used towards the energy transition of the sector."

ECSA said it has advocated for tougher requirements on production of cleaner fuels but acknowledged the agreement marked "a step in the right direction" with "a more central role [given] to fuel suppliers for the first time".

"We call on the Parliament and the Council to support binding targets on suppliers for clean marine fuels in the revised Renewable Energy Directive (RED). FuelEU Maritime, together with RED and the EU Emissions Trading System (ETS) revenues used to bridge the price gap with clean fuels, can put shipping on the right energy transition path”, said ECSA Secretary General Sotiris Raptis.

EU-based clean transportation NGO Transport & Environment (T&E) hailed the agreement as "the beginning of the end for dirty shipping fuels". T&E also acknowledged that the risk remains for higher carbon intensity fuels to be covered under the existing terms of the agreement.

"The EU’s FuelEU Maritime law, agreed upon last night by all the EU bodies and member states, sends a strong signal to potential investors and fuel suppliers to start producing these green fuels for shipping, says T&E. E-fuels are one of the only options shipping has to decarbonise, where direct electrification for many vessels is not possible. However, the group warns that loopholes risk letting biofuels and low-carbon fuels in the backdoor. T&E has called on the EU to fix these when it revises the law by 2028," the group said.

T&E sustainable shipping officer Delphine Gozillon said “Today’s decision marks the beginning of the end of dirty fuels in shipping. The EU is charting the way with the most ambitious package of green shipping laws ever adopted. This success should inspire other countries to do the same.”