The European Commission has published a proposal on 6 February in which it advocates ‘priority access’ for shipping to low and zero-emissions fuels including e-fuels and advanced biofuels. European shipowners united in ECSA welcome the commitment.

The plans are part of the proposal for a 2040 climate target laying out the pathway to make the EU climate neutral by 2050. In it, the Commission says it wants to address ‘barriers to the deployment of low and zero-emissions fuels, including e-fuels and advanced biofuels’for shipping and give the sector ‘priority access to these fuels over sectors that have access to other decarbonisation solutions’.

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Foster production

The Commission acknowledges that the increased costs of sustainable fuels is a key factor for the competitiveness of shipping and commits to consider regulatory measures to foster their production. In this regard, European shipowners support the introduction of requirements for the fuel suppliers to make these fuels available in the market.

‘It’s the first time we see such a strong commitment to give shipping priority access to low and zero-emission fuels such as advanced biofuels and e-fuels,’ says Sotiris Raptis, secretary general of the European Community Shipowners’ Associations (ECSA). ‘The price gap is immense, as the cost of sustainable fuels can be four times higher compared to fuels currently used in shipping. We look forward to working with the Commission to translate this commitment into immediate action, and to leverage the earmarked ETS revenues through dedicated calls already under the current Innovation Fund.’

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Alignment with the IMO GHG Strategy

ECSA endorses the Commission’s consideration of differentiated targets for shipping in alignment with the IMO GHG Strategy, under the three scenarios for the decarbonisation of the European economy. The IMO GHG Strategy, which was agreed in July 2023, sets up a target of net zero GHG by 2050, with objectives of at least seventy per cent striving for eighty per cent by 2040.

Sotiris: ‘After the historic agreement of last July, this is a strong message of support to the IMO to develop the measures necessary to reach net-zero GHG emissions from international shipping by 2050. It’s also an important step forward to ensure European shipping operates on a level playing field.’

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Unlocking private investments

The proposal also acknowledges the need for Europe to become more attractive for private investments. Over the course of the last fifteen years, European ship finance has been continuously declining, with shipping companies having to seek finance opportunities elsewhere.

Unlocking private investments through the capital markets, as put forward in the communication, is a good step forward. However, it is essential that this is coupled with a fit-for-purpose framework for banking finance, which is especially key for shipping SMEs, warns ECSA.

ECSA says it will now analyse in detail the three scenarios examined and the new EU 2040 climate target proposed by the Commission, and looks forward to contributing to the upcoming discussion.