Administrator Agota BAZSIK ; Assistant Vicentzia NEAGU
Foreseen for the TEN Section meeting: 9 November 2021
Foreseen for the EESC Plenary session: : 8-9 December 2021
Gist of the Commission document
In September 2020, the Commission adopted its proposal on the "European Climate Law" (COM (2020) 563 final) to cut greenhouse gas emissions by at least 55% by 20302 and put the EU on a responsible path to becoming climate neutral by 2050. To achieve climate neutrality, a 90% reduction in transport emissions is needed by 2050. All transport modes, including maritime transport, will have to contribute to the reduction efforts. Achieving significant reductions in CO2 emissions of international maritime transport requires using both less energy (increasing energy efficiency) and cleaner types of energy (using renewable and low-carbon fuels).
Depending on the policy scenarios assessed in the framework of the 2030 Climate Target Plan (CTP) (COM (2020) 562 final) and in support of the Sustainable and Smart Mobility Strategy, renewable and low-carbon fuels should represent between 6% and 9% of the international maritime transport fuel mix in 2030 and between 86% and 88% by 2050 to contribute to the EU economy-wide GHG emissions reduction targets. The CTP notes that the renewables share in the transport sector has to increase through the development of electrification, advanced biofuels and other renewable and low carbon fuels as part of a holistic and integrated approach, and that hydrogen based synthetic fuels will be crucial for the decarbonisation in particular in the aviation and maritime sector.
The push for the maritime transport sector to use cleaner fuels is also present at international level. In 2018, the International Maritime Organisation (IMO) has adopted its initial strategy on the reduction of GHG emissions from ships. In the list of identified candidate short-term measures, the IMO includes promoting the uptake of alternative low-carbon and zero-carbon fuels and providing shore-side electricity.
Currently, the fuel mix in the maritime sector relies entirely on fossil fuels. This can be explained by insufficient incentives for operators to cut emissions and by the lack of mature, affordable, and globally utilisable technological alternatives to fossil fuels in the sector. A number of market failures partly cause and reinforce these problems.
The FuelEU Maritime initiative proposes a common EU regulatory framework to increase the share of renewable and low-carbon fuels in the fuel mix of international maritime transport without creating barriers to the single market. Considerations on possible obstacles to the single market, distortion of competition between operators and diversion of trade routes are particularly relevant to fuel requirements, since fuel costs make up a substantial share of ship operators’ costs. The proportion of fuel costs in the operating costs of ships can range from around 35% of the freight rate of a small tanker to around 53% for container/bulk vessels. Therefore, variations in marine fuel prices may impact significantly the economic performance of ship operators.
At the same time, the price differential between conventional marine fuels of fossil origin and renewable low-carbon fuels remains high. To maintain competitiveness while still steering the sector towards the fuel transition that it must inevitably undertake, clear and uniform obligations are needed on ships’ use of renewable low-carbon fuels.
An increased predictability of the regulatory framework is expected to stimulate technology development and fuel production and help the sector unlock the existing chicken-and-egg situation between demand and supply of renewable and low-carbon fuels. Clear and uniform obligations on ship’s use of energy is necessary to mitigate the risk of carbon leakage, which maritime transport is prone to due to its international nature and the possibility to bunker fuel outside the EU. Owing to the cross-border and global dimension of maritime transport, a common maritime Regulation is preferred, over a legal framework requiring EU Member States to turn EU legislation into national law. The latter could result in a patchwork of national measures with differing requirements and targets.