EU forges ahead with climate-neutral shipping

EU forges ahead with climate-neutral shipping

July 25, 2023

The European Union has reached a final agreement on the regulations for climate-neutral shipping, marking a significant step forward with the approval of the FuelEU Maritime initiative.

Under this agreement, the EU’s emissions trading system (ETS) will encompass shipping starting in 2024, while the FuelEU Maritime initiative will take effect from 2025.

As part of these measures, shipping companies will gradually work towards reducing the environmental impact of fuels used in their operations.

Furthermore, the new rules will address the infrastructure requirements for alternative fuels, including the mandatory use of shore power in selected larger ports. Raquel Sánchez Jiménez, the Spanish Minister of Transport, Mobility, and Urban Agenda, said the legislation would offer legal certainty to ship operators and fuel producers, encouraging the large-scale production of sustainable maritime fuels.

In turn, this will significantly contribute to achieving climate targets on both European and global scales.

The primary goal of this initiative, which falls under the EU’s Fit for 55 package, is to foster greater demand for renewable and low-carbon fuels in the shipping sector.

By doing so, greenhouse gas emissions from maritime transport can be effectively reduced.

The new regulations are intended to align the trajectory of maritime transport with the EU’s climate targets for 2030 and 2050, playing a crucial role in fulfilling the requirements set forth in the European climate law.

To ensure the gradual decrease of greenhouse gas intensity in fuels used by the shipping sector over time, the new legislation mandates a reduction of 2% by 2025, increasing to as much as 80% by 2050.

Notably, the regulation will offer a special incentive regime to support the adoption of renewable non-biological fuels with high decarbonisation potential, while excluding fossil fuels from the certification process.

In order to address emissions from passenger ships and containers while moored in major EU ports, the new regulation sets a target for the use of onshore power supply for all electricity needs by 2030.

Moreover, the regulation introduces a voluntary pooling mechanism, which allows ships to combine their compliance balance with one or more other ships. This approach enables the entire pool to collectively meet the greenhouse gas intensity limits on average.

Furthermore, revenues generated from implementing the regulation, known as “FuelEU penalties,” will be directed towards projects that support the decarbonisation of the shipping industry.

To enhance transparency, an effective mechanism will be put in place to monitor the allocation of these funds to relevant projects.

The new regulation will be published in the EU’s official journal after the summer and will come into force twenty days after its publication.

This significant step represents the EU’s commitment to taking decisive action in the fight against climate change and furthering the transformation towards a sustainable and environmentally friendly maritime transport sector. SOURCE: Splash 247

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