FuelsEurope position on reducing greenhouse gas (GHG) emissions in shipping
Shipping is the backbone of international trade and commerce and an indispensable driver of EU prosperity. At the same time, maritime transport was responsible for the emission of 1,076 million tonnes of GHG in 2018, about 2.9% of global anthropogenic GHG emissions, according to the 4th IMO GHG study. Shipping emissions are projected to increase from 90% of 2008 emissions in 2018 to 90% and 130% of 2008 emissions by 2050 for a range of plausible long-term economic and energy scenarios in accordance with the Initial IMO Strategy on reduction of GHG emissions from ships.
Hence, for the EU to curb the rising GHG emissions from this important sector, and thus realising the EU Green Deal’s ambition of climate neutrality by 2050 whilst remaining prosperous and competitive, it will need practicable and science-based policy solutions.
FuelsEurope fully supports the EU Green Deal’s ambition of climate neutrality by 2050. In view of the dramatic challenges to the economy created by the Covid-19 crisis, FuelsEurope and its members recognise that there is no business as usual and are ready to fully play their part by developing alternative fuels, products, and services needed to achieve the climate-neutrality objective.
Specifically, the refining industry’s Clean Fuels for All strategy indicates how low-carbon liquid fuels for transport could contribute to the EU net climate neutrality goal, enabling the decarbonisation of maritime, aviation and road transport. The full-scale deployment of technologies for the production of these low-carbon fuels requires policies providing clear, stable and strong regulatory signals to investors. To facilitate a reduction of GHG emissions from shipping specifically, we strongly believe the following principles are necessary determinants of success:
- Given the international market structure of the shipping sector, global approaches should be the primary lever to drive the reduction of GHG. We hence invite the EU to collaborate closely with its partners in the IMO, as well as endeavour to avoid climate ambition gaps between the EU and the rest of the world in the maritime sector, and regulatory overlap with the IMO energy efficiency design index (EEDI) and ship energy efficiency management plan (SEEMP).
- To curb the GHG emissions from the shipping sector efficiently, any policy regime should consider GHG abatement along the full value chain of marine transport, from efficient ship design and ship operation, over low-carbon port infrastructure, to sustainable marine fuels.
- As part of any basket of policy solutions, establishing a market for low-carbon marine fuels will be an essential. Key enablers of such a market would be a sufficiently high carbon price, predictable regulatory framework, investment certainty, a well-to-wake consideration of shipping emissions to support their long-term sustainability, as well as a technology-neutral approach.
- If the EU wishes to move ahead of the international community with regard to shipping decarbonisation and create the enabling conditions for a low carbon marine fuels market, it should do so in a manner that avoids carbon leakage, safeguards the competitiveness of the EU shipping sector and marine fuel industry, and avoids frictions or redundancies between global and national policy. Options for the EU could include:
- Integration of shipping into a dedicated, stand-alone cap & trade system;
- Regulation on sustainable marine fuels through carbon intensity;
- Policy levers that provide investment support, which may include fiscal measures.