Europe’s FuelEU aims to kick start shift to greener fuels

Spanish Transport Minister Raquel Sánchez Jiménez, says FuelEU will provide legal certainty for ship operators and fuel producers.

Europe’s FuelEU legislation has now been adopted by the European Council and will come fully into effect from January 2025, though some requirements will come into effect from August 31, 2024. The legislation has been in the works for some two years.

“The new law will provide legal certainty for ship operators and fuel producers and help kick-start the large-scale production of sustainable maritime fuels, thus substantially delivering on our climate targets at European and global level,” said Raquel Sánchez Jiménez, Spanish Minister of Transport, Mobility and Urban Agenda in announcing the Council Decision.

The main objective of the FuelEU maritime initiative, as a key part of the EU’s Fit for 55 package, is to increase the demand for and consistent use of renewable and low-carbon fuels and reduce greenhouse gas emissions from the shipping sector, while ensuring the smooth operation of maritime traffic and avoiding distortions in the internal market.

The new regulation contains the following main provisions:

• measures to ensure that the greenhouse gas intensity of fuels used by the shipping sector will gradually decrease over time, by 2% in 2025 to as much as 80% by 2050
• a special incentive regime to support the uptake of the so-called renewable fuels of non biological origin (RFNBO) with a high decarbonization potential (so called e-fuels produced with renewable energy)
• an exclusion of fossil fuels from the regulation’s certification process
• an obligation for passenger ships and containerships to use on-shore power supply for all electricity needs while moored at the quayside in major EU ports as of 2030, with a view to mitigating air pollution in ports, which are often close to densely populated areas
• a voluntary pooling mechanism, under which ships will be allowed to pool their compliance balance with one or more other ships, with the pool – as a whole – having to meet the greenhouse gas intensity limits on average
• time limited exceptions for the specific treatment of the outermost regions, small islands, and areas economically highly dependent on their connectivity
• revenues generated from the regulation’s implementation (‘FuelEU penalties’) should be used for projects in support of the maritime sector’s decarbonisation with an enhanced transparency mechanism
• monitoring of the regulation’s implementation through the Commission’s reporting and review process

Download the text of the FuelEU regulation HERE