Efficiency in shipping

By Jutta Paulus, MEP, (pictured)
Autumn 2023

Jutta Paulus, MEPThe fourth summer in a row, worrying temperature records were hit, July 2023 being the hottest month ever recorded on our planet and droughts, floods, heatwaves causing havoc in Europe and around the world. With the European Green Deal, the European Union initiated important policy measures to bring forward climate action.

Until 2030, the European Union aims to reduce its greenhouse gas emissions by 55% compared to 1990, a goal that can only be reached if every sector contributes its fair share to this effort.

International maritime transport has never been subject to binding emission reduction measures yet, although being responsible for three percent of global greenhouse gas emissions. Therefore, the legislation which was now adopted in Europe is a global first and could serve as blueprint for similar laws around the globe.

Europe carries 77% of its foreign trade by sea, which accounts for 13.5% of European transport emissions. The International Maritime Organisation IMO estimates that global emissions from ships would increase by 90% to 130% between 2008 and 2050 if no measures were taken. For ships calling at ports in the European Economic Area, the EU Commission expected an increase of 86% compared to 1990. Hardly any other industrial or transport sector shows such high emission increases.

Emissions from maritime transport make significant contributions to environmental pollution. Sulphur dioxide, nitrogen oxides, black carbon, and oil leaks harm the health of marine animals and plants, endangering biodiversity in our seas. Air quality in port cities is likewise affected. After decades of discussions, limits for sulphur oxide emissions were introduced, but still more action is needed for achieving zero emission ports. Particulate matter and nitrogen oxide are responsible for more than 400.000 premature deaths in the EU, and while cars have become cleaner due to EU standards, considerably lowering urban pollution, shipping is still steaming below the radar of pollutant regulation.

Russia's invasion of Ukraine showed that dependencies on fossil imports has more disadvantages than harmful emissions and accelerated Europe's ambition to phase out fossil fuels and gain energy sovereignty. With skyrocketing prices for gas, the switch to renewable energy showed to be economically viable both in terms of price stability and reliability.

Concerning greenhouse gas emissions from maritime transport, the EU had decided to monitoring these as late as 2016, after it had become clear that IMO would not act on this matter. When the corresponding regulation was revised, the European Parliament demanded to not only count emissions but actually act on them and voted for the inclusion of shipping in the emission trading system ETS and the application of efficiency targets. Consequently, when the ETS was revised, shipping was addressed in a stepwise approach. All ships above 5000 gross tons, irrespective of their flag, owner or cargo, will be included.

All intra-EU voyages and half of outgoing and incoming journeys will be subject to carbon pricing not only for CO2 emissions but also for the much stronger greenhouse gases methane and nitrous oxide, which have greenhouse gas potentials of 82 and 300, respectively, compared to CO2. This is especially important regarding the future use of alternative fuels in shipping. However, pricing alone will not be enough to ensure a climate friendly, sustainable shipping sector. If trade at sea is about to increase, ships and fuels need to get more sustainable to steer shipping on the course of climate neutrality.

In July 2023, the European Parliament finally adopted the Fuel EU Maritime Regulation, the world's first law for alternative fuels in international maritime shipping. The new law will oblige ship owners of large ships with a gross tonnage of more than 5,000 GT to gradually reduce the greenhouse gas intensity of the used shipfuels. Starting with 2% in 2025, fuels in 2050 may only cause 20% as much CO2 equivalents per energy unit as today.

From 2031, a target for the use of synthetic fuels based on renewable energies of at least one percent is being introduced. The EU Renewable Energy Directive RED will be the basis for the definition of Renewable Fuels of Non-Biological Origin (RFNBO).,

As a compromise it was decided that the European Commission will monitor the development and if the shipping fleets will not reach the required threshold of 1% RFNBOs by 2031, a binding quota of 2% will apply only from 2034. We Greens managed to prevent food and feed crops from being allowed as sustainable biofuels.

With regard to research and development of sustainable fuels and marine propulsion, the new law misses an opportunity. The quota of 2% is far too low for providing incentives for additional investments in sustainable synthetic fuels. It only takes effect if the share of renewable marine fuels is below one percent in 2030. The largest container ship owner Maersk alone has announced investments that will probably meet the entire EU quota.

Fuel EU Maritime will contribute to more sustainable ports by obliging cargo and passenger ships in large EU ports to source their energy needs entirely from shore-side electricity from 2035. In 2035, the obligations will also apply to smaller EU ports.

There will be exemptions for up to four percent of ships. Fuels used by icebreakers in winter will not count towards the greenhouse gas intensity goals and some regions will temporarily benefit from geographical exemptions. For voyages where the port of departure or destination lies outside the EU, only half the distance will be taken into account. We Greens were able to prevent the most impactful exemption which would have affected 15 percent of all vessels; those belonging to small companies that own less than three ships. It is obvious that this would only have set an incentive to split up companies.

The ambition of Fuel EU Maritime is not far-reaching enough to adequately contribute to the EU's climate target. However, it is a first step in the right direction and could set important international standards. For a future revision, it will be important to also address climateimpacting substances such as Black Carbon and methane.

Ships that are built today will sail the oceans for decades. This requires long-term adaptation and measures on the international level. Fuel EU Maritime could steer not only Europe's climate action in the shipping sector into the future, but also lead as an example worldwide.