The FuelEU Maritime Regulation sets ambitious targets to decarbonize EU shipping, with a progressive well-to-wake GHG intensity reduction pathway and strict compliance mechanisms.Despite these measures, limited fuel availability, high costs, and investment uncertainties threaten to delay compliance beyond 2035, with conventional fuels likely dominating into the 2040s

Analysis

Manager, Renewables and Decarbonization

Gabriel Ferrera Rojano

Marine 

Hydrogen

<p>The FuelEU Maritime Regulation aims to progressively reduce the GHG intensity of fuels used by ships calling at EU ports. FuelEU Maritime mandates a progressive WtW reduction in maritime fuel carbon intensity starting at 2% in 2025, increasing up to 80% by 2050 compared to 2020 levels. However, despite the introduction of stringent penalties under FuelEU Maritime, prevailing market trends highlight major challenges in meeting post-2030 decarbonization mandates. In the near to medium term, bio-based fuels&mdash;particularly biodiesel and Bio-LNG&mdash;are expected to play a leading role in the EU&rsquo;s decarbonization trajectory, supported by the growing LNG-fueled fleet and increasing biomethane production. However, current progress in scaling hydrogen-based alternatives...</p>
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<p><a href="~/services/services?ContentID=154" title="" target="_blank" rel="noopener">Global Biofuels Outlook</a></p>
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Compliance Challenges Persist Despite Stringent FuelEU Maritime Penalty Framework

<p class="MsoNormal">Maritime transport accounted for approximately 2.9% of global man-made emissions in 2018. Projections by the International Maritime Organization (IMO) suggest that, without intervention, shipping emissions could increase by up to 130% of 2008 levels by 2050, jeopardizing the objectives of the Paris Agreement. In response, the IMO has set an ambitious target of achieving net-zero GHG emissions from international shipping by 2050, with interim goals of at least a 20% reduction by 2030 and 70% by 2040, relative to 2008 levels. Anticipating potential delays in global GHG emission reductions, the European Union (EU) has proactively introduced measures under its "Fit for 55" climate initiative, aiming for a 55% reduction in overall EU emissions by 2030.<o:p></o:p></p>
<p class="MsoNormal">A cornerstone of the Fit for 55 legislative package is the FuelEU Maritime Regulation (EU 2023/1805), which sets stringent GHG intensity reduction requirements for marine fuels, promoting the adoption of alternative fuels across the maritime sector. This regulation evaluates emissions on a well-to-wake (WtW) basis, encompassing CO₂, methane, and nitrous oxide, to assess the total climate impact from production to consumption. Additionally, as part of the Fit for 55 legislative package the revised Renewable Energy Directive (RED III) mandates that 29% of energy in the transport sector<span style="font-size: 11.0pt; line-height: 107%; font-family: 'Aptos',sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Aptos; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: 'Times New Roman'; mso-bidi-theme-font: minor-bidi; mso-ansi-language: #2000; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;">&ndash;</span><span style="mso-spacerun: yes;">&nbsp;</span>including maritime transport, must originate from renewable sources by 2030. The EU is also extending its Emissions Trading System (EU ETS) to cover maritime emissions, strengthening economic incentives to reduce ship emissions. Collectively, these measures position the EU at the forefront of maritime decarbonization, inspiring similar actions globally.</p>
<p class="MsoNormal">According to projections by Stratas Advisors, the European maritime sector is anticipated to see a dramatic increase in the adoption of low-carbon fuels, rising from virtually nil in 2020. However, these projections also indicate that the uptake may fall short of the scheduled GHG emission reductions in the medium to long term, due to competing waste-based feedstock demand and limited availability of expensive renewable electricity-based alternatives.</p>
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Power-to-Liquids (PTL)

Bio-CNG

Low Carbon Fuels

Alternative Fuels 

B100

Biofuels ,HVO,Hydrogen,Power-to-Liquids (PTL),Bio-CNG,Low Carbon Fuels,Alternative Fuels ,B100

Europe

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