EC’s Union Database plan could limit biofuel availability to ships

EC Headquarters [Image source:EmDee, CC BY-SA 4.0, via Wikimedia Commons]

Here’s a development that operators with vessels trading to Europe need to pay attention to, particularly if they have hopes of getting European ETS and FuelEU credits by using green methanol or bio LNG. The European Union is setting up a Union Database (UDB) of biofuels. The database aims to ensure the traceability of liquid and gaseous biofuels that are eligible for being counted towards the share of renewable energy in the transportation sector in any EU member state. One aspect of the European Commission’s plans for the UDB is causing “deep concerns” to both the Methanol Institute (MI) and SEA-LNG, key representatives of the methanol and liquefied natural gas (LNG) industries respectively.

The Commission has noted its intention to exclude the automatic certification of biomethane and biomethanol-based fuels produced through mass balance chain of custody in third-party countries outside the EU gas grids within the Union Database (UDB) .

The Methanol Institute and SEA-LNG say that this exclusion will severely limit the use of these critical fuels in decarbonizing intra-European and international maritime transport even if these fuels were produced in accordance with EU regulations under the EU’s Renewable Energy Directive (RED).

Both the Methanol Institute and SEA-LNG are particularly concerned about the potential impacts of these measures on competitiveness and international trade dynamics. They say that if this exclusion from the UDB materializes, it will create a trade barrier that threatens to impede the importation of biomethane and biomethanol into the European Union, limiting the availability and increasing the costs of these fuels to the bunkering industry in Europe.

It may also disqualify such fuels produced using a mass balance chain of custody from non-EU gas grids, when bunkered in non-European ports for use by vessels calling at European ports. from being recognised under the Renewable Energy Directive (RED). Consequently, these fuels may not be able to generate credits under EU ETS and FuelEU Maritime.

In response to these challenges, MI and SEA-LNG call for the recognition of biomethane and biomethanol-based fuels produced using a mass balance chain of custody from non-EU gas grids under the UDB. Yesterday, they sent a joint letter proposing an urgent meeting between our representatives and those of the European Commission to discuss necessary amendments to ensure a sustainable and competitive energy future for the European maritime sector.