EU called to unlock investments in production of clean maritime fuels

Clean Maritime Fuels Platform, an industry initiative aiming to enhance communication between the shipping sector and fuel producers, has called on policymakers to create regulatory conditions to unlock investments in the production of clean maritime fuels in the European Union (EU).

As per the Draghi Report, €40 billion in annual investments will be needed between 2031 and 2050 for the energy transition of shipping.

Clean Maritime Fuels Platform revealed it supports the report’s conclusions regarding the need to:

• De-risk investments in renewable and low-carbon fuels, for example via schemes based on contracts for difference and auctions as a service.
• Launch dedicated sectoral calls under the Innovation Fund for the first deployment of decarbonization solutions. The 20 million EU ETS allowances allocated to the decarbonization of the maritime sector until 2030 should be used as soon as possible, according to the initiative.
• Expand existing funding mechanisms for refueling and recharging infrastructure.
• Start building a supply chain for renewable and low-carbon fuels in the EU.

“European manufacturing capacity should match demand for clean shipping fuels in Europe as much as possible, in line with the benchmark of the Net-Zero Industry Act,” the initiative noted.

Sotiris Raptis, European Community Shipowners’ Associations’ (ECSA) Secretary General, commented: “The Draghi Report has recognised the global leadership of European shipping and the need to remain internationally competitive. In order to meet our targets, we need clean fuels available in the market in sufficient quantities and at an affordable price. To ensure that the shipping energy transition happen, the EU should de-risk investment in renewable and low carbon fuels and start building a supply chain for renewable and low-carbon fuels in the EU. Moreover, existing funding mechanisms for refuelling infrastructure should be expanded to better ensure the security of supply of clean fuels for shipping.”

Liana Gouta, Director General of FuelsEurope, stated: “Mr. Draghi’s report acknowledges the strategic role of renewable and low-carbon fuels, particularly in decarbonising all transport modes. His report highlights the EU’s leadership in this area and calls for a truly technology-neutral approach. We, European Fuel Manufacturers, believe the right EU policy framework and subsidies can create a robust business case to attract private investments and avoid de-industrialization, help the EU successfully deliver climate neutrality by 2050, ensure a secure supply of energy, and foster innovative, EU-based, globally competitive industry for the welfare of EU economies and citizens.”

Daniel Fraile, Chief Policy Officer of Hydrogen Europe, called it “crucial” to create a “fertile” environment for companies to invest in the production of competitive clean shipping fuels in Europe, while R. Tim Eestermans, Managing Director-Europe, Methanol Institute, pointed out that the EU should ensure that its regulations are in line with global developments, also in the maritime domain and notably with the IMO.”

To note, the Clean Maritime Fuels Platform was established by ECSA, together with FuelsEurope, eFuel Alliance, EWABA, HydrogenEurope and Methanol Institute.

In related news, ECSA and European green transport group Transport & Environment (T&E) called upon EU leaders to prioritize clean fuel production as part of the upcoming Clean Industrial Deal.

The upcoming Clean Industrial Deal is said to be “a great opportunity” to support the energy transition of shipping, while increasing industrial capacity in Europe, at a time when global shipping is seeking to reach net zero by 2050.

In a position paper published in September 2024, ECSA put forward several recommendations to support the production and uptake of clean fuels in shipping.