EU not on track for green shipping fuel target: Study

: Biofuels, Fertilizers, Hydrogen, Natural gas, Oil products
24/06/03

The EU is on course to fall short of its green shipping fuel targets for 2030, according to non-governmental organisation Transport & Environment (T&E).

Confirmed e-fuels production projects in the bloc will not reach the mandated 1pc threshold of 280,000 t/yr of oil equivalent (toe/yr) by 2031, T&E analysis found.

The organisation mapped 61 e-fuels projects in development that could supply shipping fuels, with 17 of them "specifically dedicated to the maritime sector". But total volumes from existing plants and projects that have reached a final investment decision (FID) stand at just 130,000 toe/yr, T&E estimates.

Many of the other projects are facing "likely delays" or "even total cancellation", according to T&E's shipping officer Inesa Ulichina.

T&E pointed to just a handful of shipping-dedicated projects that have reached FID, including four green hydrogen projects and two e-methanol projects, amounting to 40,000 toe/yr and 30,000 toe/yr, respectively. It did not find one shipping-dedicated e-ammonia project with an FID.

The organisation assumes that LNG, biofuels and shoreside electricity will supply the lion's share of alternative shipping fuel demand in the EU until 2030.

Under the FuelEU Maritime regulation, the European Commission can, if appropriate, propose lifting the green shipping fuels mandate to a 2pc share, or some 560,000 toe/yr, from 2034.

EU elections — set to take place this week — will not roll back green shipping fuel targets, Ulichina said. "We envisage increased ambition for mandatory e-fuels uptake post-2030," she told Argus.

In line with the commission's projected 2040 emissions cuts, Ulichina called for the shipping sector to deliver at least 80pc absolute emission reductions by 2040.

Under the revised EU Emissions Trading System (ETS), shippers have to surrender ETS allowances for 50pc of GHG emissions for extra-EU journeys. Surrender obligations for intra-EU shipping are phased in at 40pc of verified emissions reported for 2024, 70pc for 2025 and 100pc for 2026 onwards.

The bloc's FuelEU Maritime regulation requires greenhouse gas (GHG) intensity cuts for bunker fuels of 2pc in 2025, 6pc from 2030, 14.5pc from 2035, 31pc by 2040 and 80pc by 2050.

By Dafydd ab Iago

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