The FuelEU Maritime Initiative

by Naïs Ohayon-Louisor

The following article is part of the Fit for 55 series, analysing all policies, directives, and strategies that are part of the EU’s plan to reduce net carbon emissions by 55% until 2030 and reach net-zero emissions by 2050. It specifically looks at the FuelEU Maritime Initiative. 

Shipping in the EU

Maritime transport is critical to the European Union’s (EU) economy. It makes up three quarters of external trade and almost one third of internal trade volumes [1]. It also contributes to the mobility of people, with 400 million passengers using European ports annually [1].

However, the EU estimates that maritime carbon emissions account for almost 4% of total EU emissions (and for 11% of EU transport emissions). Currently, the fuel mix in the maritime sector relies entirely on fossil fuels [1].

In 2018, the International Maritime Organisation (IMO), the United Nations’ body regulating international shipping, adopted an Initial GHG Strategy for international shipping seeking to reduce GHG (Greenhouse Gas) emissions and phase them out as soon as possible. The strategy aims at reducing average carbon intensity (CO2 per tonne-mile) by at least 40% by 2030 and by 70 % in 2050, as well as to cut total emissions by at least 50% by 2050, compared to 2008 [6].

In its resolution on the European Green Deal, the European Parliament called for measures to move away from the use of heavy fuel oil (fuels used to generate motion and/or fuels to generate heat that have a particularly high viscosity and density) and for urgent research investments into new technologies to decarbonise the shipping sector, and into the development of zero-emission and green ships.

Fit for 55

On 14 July 2021, the European Commission presented the FuelEU maritime proposal within its Fit for 55 package, accompanied with an impact assessment [2][5].

The FuelEU Maritime is part of a larger suite of measures aiming to address maritime transport emissions, while also maintaining a level playing field. It is consistent with the measures introduced in the ‘Fit for 55’ package and builds on existing policies [2].

The FuelEU Maritime initiative aims to increase the use of sustainable alternative fuels in European shipping and ports by addressing:

• market barriers that hamper their use
• uncertainty about which technical options are market-ready [3].

In particular, the proposed regulation imposes a limit on greenhouse gas emissions of ships arriving at, staying at or departing from EU ports; and an obligation on EU ports to become carbon neutral.

The proposed regulation introduces increasingly stringent limits on carbon intensity of the energy used by vessels from 2025, which should oblige them to use alternative fuels. It applies to commercial vessels of 5 000 gross tonnes and above, regardless of flag (fishing ships are exempted). It covers all energy used when the ship is at an European Economic Area (EEA) port, all energy used by the ship on voyages between EEA ports and 50% of the energy used on voyages departing from or arriving to an EEA port [1].

Annual average carbon intensity has to decrease by 2% in 2025 and by 6 % in 2030 and then further by 5-year periods till 2050, when carbon intensity should be 75% compared to the 2020 base year. All GHG emissions that a given fuel generates have to be taken into account (full lifecycle), not just those used by the ship. The responsibility for compliance lies with the shipping company [1]. The proposal introduces common principles for monitoring, reporting, verification (MRV).

As the Commission does not specify the fuels to be used, but focuses on carbon intensity instead, technology neutrality would be maintained. By putting the responsibility for compliance on the energy consumers, the Commission wishes to create demand which might otherwise not materialise [1].

Maritime stakeholders expressed concerns that the regulation puts responsibility on shipping companies (not on the fuel producers); that the efficiency standard is not defined at the fleet level; that they did not want any obligation on the choice of fuel and technology [1]; and that a promotion of biofuels may raise serious enforcement concerns, as a mandatory fuel standard is aimed to apply to fuels purchased also outside the EU [4]. Moreover, a study by the European Community Shipowners’ Associations (ECSA) found that the initiative might indirectly promote biofuels instead of R&D in renewables [4].

Reference List

[1] Hedley, Travers, Hanzelova, European Commission publishes new initiatives concerning sustainable transportation, EHS Law Insights, https://www.ehslawinsights.com/2021/08/european-commission-publishes-new-initiatives-concerning-sustainable-transportation/, accessed on 17 Nov. 2021
[2] Fuel EU Maritime – Green European Maritime Space, European Parliament Legislative Train, https://www.europarl.europa.eu/legislative-train/theme-a-european-green-deal/file-fuel-eu-maritime, accessed on 17 Nov. 2021
[3] CO2 Emissions from Shipping – Encouraging the Use of Low-Carbon Fuels, European Commission, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12312-CO2-emissions-from-shipping-encouraging-the-use-of-low-carbon-fuels_en, accessed on 17 Nov. 2021
[4] Study Finds FuelEU Maritime May Promote Biofuels, Raising Substantial Enforcement Concerns, European Community Shipowners’ Associations, https://www.ecsa.eu/news/study-finds-fueleu-maritime-may-promote-biofuels-raising-substantial-enforcement-concerns-0, accessed on 17 Nov. 2021
[5] Commission Staff Working Document Impact Assessment Accompanying the Proposal for a Regulation of the European Parliament and of the Council on the Use of Renewable and Low-Carbon Fuels in Maritime Transport, European Commission, https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2021:0635:FIN:EN:PDF, accessed on 17 Nov. 2021
[6] Initial IMO GHG Strategy, International Maritime Organization, https://www.imo.org/en/MediaCentre/HotTopics/Pages/Reducing-greenhouse-gas-emissions-from-ships.aspx, accessed on 17 Nov. 2021