Low targets, few incentives, and a myriad of exemptions have hollowed out the potential of FuelEU Maritime to kickstart the decarbonisation journey of a historically underregulated sector, argue Jutta Paulus and Ciarán Cuffe.

Jutta Paulus is a German MEP from the Greens/EFA group in the European Parliament and shadow rapporteur for the FuelEU Maritime file. Ciarán Cuffe is an Irish MEP also with the Greens/EFA group.

Shipping does not have to work hard to decarbonise or innovate when other sectors can pick up the slack: that is the message of the FuelEU Maritime deal being voted on by Parliament this week.

Amendments to increase greenhouse gas intensity reduction (GHG) targets, widen the scope, and incentivise renewable fuels must be approved by MEPs to set a realistic course to decarbonisation for shipping.

Shipping is a major source of GHG emissions, pumping out 1000 megatons of CO2 annually. Currently, the sector relies almost entirely on heavy fuel oil, the most polluting fuel worldwide, for its operations.

However, the International Maritime Organisation has failed to take appropriate measures to decarbonise the sector. Transitioning shipping towards alternative energy sources is essential to reduce its climate impact. FuelEU Maritime is an opportunity to set the global standard for the sector.

FuelEU Maritime is part of the “Fit for 55” package presented by the European Commission in July 2021. Its aim? Driving shipping to transition towards low-carbon energy sources by introducing strong climate rules for marine fuels.

Measures included in the proposal are higher GHG intensity reduction targets, increasing targets for renewable e-fuel use, and rewards for early adopters of these fuels.

This sounds very positive, but the Commission’s proposal already fails at hurdle one: ensuring a pathway to climate neutrality by 2050.

In a joint statement released this year by Belgium, Denmark, Germany, Ireland, Luxembourg, the Netherlands and Sweden, the countries emphasised that FuelEU Maritime needs more ambition and a “proactive legislative framework” to reduce GHG emissions from the sector.

Despite support from the Council and the Parliament’s environment and energy committees (ENVI and ITRE), the leading transport committee (TRAN) watered down the draft law by narrowing the scope and introducing a myriad of exemptions, effectively cancelling out any gains made by the introduction of some slightly higher targets.

The deal ignores the minimum aims of the draft law, EU climate commitments at large, and even the will of industry.

We need higher GHG intensity reduction targets for 2030 and 2050, so Parliament must approve a 100% target by 2050 and a 10% target by 2030.

At Council, these targets have the explicit support of member states like Germany and Denmark. A higher 2030 target is essential to keep 1.5 alive this decade.

The lower 2030 target proposed by the Commission and unchanged by TRAN would also incentivise a switch to fossil LNG, increasing our dependence on potentially unreliable imports into the next decade.

Incomprehensibly, the 2050 target is unchanged by the TRAN deal at 80%, allowing for potentially substantial emissions to continue at a time when the EU should have achieved climate neutrality.

Higher sub-targets for renewable fuels of non-biological origin (RFNBO) are also important. This category includes electrofuels like hydrogen, methanol, ammonia, and e-diesel.

Higher sub-targets will encourage market development and deployment of the most sustainable, innovative fuel technologies with the greatest growth potential to meet the sector’s future needs.

This is also important from a strategic autonomy perspective, giving first movers’ advantage to the EU hydrogen economy.

We are proposing to increase the RFNBO sub-target introduced by TRAN from 2% by 2035 to 6%, in line with the ITRE target, although from a climate policy point of view, the much higher ENVI sub-targets of 6% and 12%, respectively, should be applied.

Nonsensically, the TRAN deal only applies to ships above 5000 GT. This is significantly out-of-step with Parliament’s Emissions Trading System position approved this year, which covers ships above 400 GT from 2027.

Parliament must vote to widen the scope to include ships over 400 GT from 2027 and for reasons beyond aligning EU legislation: smaller ships are important for intra-EU transport; they have greater potential to be innovators, and a level playing field is essential for fair competition.

The scope should also be widened to cover 100% of the emissions from the entirety of the voyage, like under ETS.

Finally, another issue of scope arises with TRAN’s decision to restrict obligations to cut emissions of GHG and pollutants in harbours to TEN-T ports only. This significantly reduces the law’s potential provisions that aim to reduce ship emissions to zero at berth.

The Commission’s original wording must be restored to achieve this and provide the necessary incentives to invest in zero-emission technology. This, along with more ambition across the file, would also significantly improve air quality for citizens in port cities.

FuelEU Maritime is the first warning shot of the substantive threats we face in the Parliament against achieving the minimum standard of climate action at a time when one of Parliament’s largest groups is calling for a blanket freeze on regulations that won’t be implemented for years.

As we find ourselves bookended by a summer of extreme weather events and a punishing winter crisis engendered by our dependence on fossil fuels, it’s time for Parliament to start building plenary-proof coalitions in line with climate science.