FuelEU Maritime needs e-fuels mandate, incentives for first movers, wind and solar

Shipping is ready to transition to renewable e-fuels, but the European Parliament needs to kickstart the process through a mandate. This is known as a ‘sub-quota’, referring to the requirement that a share of fuel decarbonisation should happen specifically through these future-proof fuels. The Environmental Defense Fund Europe and Transport & Environment, together with the hydrogen industry, have recommended that a sub-quota of 6% e-fuels in 2030 will be needed to kickstart this transition.

But as shipping is a highly competitive industry, operators could be reluctant to invest in fuels that are more expensive in the short-term. Ambitious first movers should therefore be rewarded through a so-called ‘multiplier’ for volumes used on top of the sub-quota. The importance of this measure cannot be overstated: as fuel supplies of green e-fuels slowly come into the market later this decade, they will be scarce and costly. A multiplier of 5 would bridge the gap of cost of compliance for green e-fuels.

Ships can also harness renewable power, notably wind and solar, directly on board potentially saving 10-20% of the fuel burn of modern commercial ships. As these renewable technologies are commercially available today, they offer industry an excellent way of reducing emissions, while improving the business case of green fuels. Once again, MEPs have a chance to encourage investments in green technologies, by boosting rewards for the use of wind propulsion.

With an ambitious vote later this month, European parliamentarians could have a tremendous influence on the shipping industry and regulators beyond its shores. This is the chance to set the global gold standard for shipping.

Editor’s note: this article originally appeared on Transport & Environment’s website

The Maritime Hybrid, Electric & Hydrogen Fuel Cells Conference, Bergen will be held 25 October 2022. Details and tickets can be found here