Shipping Groups Criticize EU’s Effort to Promote Alternative Fuels

Ahead of the adoption of the EU’s FuelEU Maritime initiative, which aims to increase the use of sustainable alternative fuels in European shipping and ports, a new study raises concerns about the global implications and potential negative effects on shipowners. The study, commissioned by the European Community Shipowners’ Associations and the International Chamber of Shipping, highlights outstanding issues concerning the cost, availability, and specification of biofuels, as well as important questions about enforcement relating to EU’s sustainability criteria and accountability for the quality of fuel.

The study, entitled FuelEU Maritime – Avoiding Unintended Consequences, explores the efficacy and implications of potential measures, including new EU fuel standards, to help decarbonize shipping. Among the key issues raised by the study is a concern that promotion of biofuels may raise serious enforcement concerns, as a mandatory fuel standard is aimed to apply to fuels purchased also outside the EU.

“The European shipping sector is committed to decarbonizing the shipping industry as quickly as possible. However, shipowners cannot be held accountable for the quality of fuels. This is the sole responsibility of fuel suppliers.” says Claes Berglund, ECSA President.

A standard for fuels purchased internationally would, in essence, mandate the use of biofuels by ships due to the lack of any viable alternative fuels, especially for deep sea shipping the study finds. However, according to the shipping organization that commissioned the report, this could have the unintended consequence of actually jeopardizing the achievement of emissions reductions.

Martin Dorsman, ECSA Secretary General said, “We understand that the Commission wants to implement EU’s sustainability criteria to all fuels covered by the proposal, but placing the legal responsibility for the fuel standards on ships does not address the substantial enforcement challenges, especially with regard to biofuels.”

Certifying non-EU fuel suppliers allowed to refuel ships internationally may imply that FuelEU Maritime would effectively regulate and potentially disrupt the international fuel market. Therefore, one of the main conclusions of the study is that the EU should ensure that the principal obligation for compliance with any new standards rests with fuel suppliers.

“You wouldn’t penalize a car owner for being sold the wrong fuel at a petrol pump, yet this is exactly what will happen to shipowners with the FuelEU maritime proposal,” said Guy Platten, Secretary General of the International Chamber of Shipping. “In addition, there are legitimate concerns that FuelEU will jeopardize emissions reductions by mandating the use of biofuels, which have real-world issues for environmental sustainability”.

Another issue highlighted in the study is the introduction of an extremely complex compliance system, whereby ships unable to use or gain access to fuels that meet the required EU standards might instead be required to purchase credits from other companies or the Commission itself. This would effectively establish a carbon trading scheme in addition to and overlapping with the proposal to extend the EU ETS to shipping.

The study concludes that the FuelEU Maritime proposal, if properly designed, could contribute to addressing the barriers identified in the IMO GHG Strategy. They believe it could stimulate demand for low and zero-carbon marine fuels, which is currently negligible, but it must also address how the requirements will be handled globally and where the responsibilities sit for the quality of the fuel.

PUBLISHED JUN 4, 2021 7:45 PM BY THE MARITIME EXECUTIVE