GHG Emissions in Shipping

With a projected increase in global GHG emissions in shipping of up to 130% by 2050 (compared to 2008), practicable and science-based policy solutions are needed if the EU is to realise its ambition of climate neutrality by 2050, and stay within the boundaries of the Paris agreement more broadly. At the same time, the distinctly global nature of the shipping market necessitates that global solutions are sought to drive down emissions overall, and avoid carbon leakage though fuel bunkering just outside the EU.

Fully supportive of the EU, Green Deal, FuelsEurope as part of its Clean Fuels for All Strategy outlines how low-carbon liquid fuels for transport could contribute to the EU net climate neutrality goal. While a number of studies attest to their GHG savings potential, the commercialisation of low carbon liquids has so far been slow, impeded by the high costs for first movers, very limited demand, the absence of a coherent policy framework, and international competitive pressures. As such, we are encouraged to see that the EU Commission set itself the ambition to advance the up-take of sustainable marine fuels.

To ensure the success of the EU’s decarbonisation strategy for the maritime sector, we believe the following design principles to be essential enablers:

• Given the  international  market  structure  of  the  shipping  sector,  global  approaches  should  be  the primary lever to drive the reduction of GHG emissions. 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 component. 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 schemes. 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 requirements;
  • Policy levers that provide investment support, which may include fiscal measures.​