ECSA: Loopholes in FuelEU Program May Mean "Missed Opportunities"

The European Community Shipowners’ Associations (ECSA) is continuing its criticism of the pending FuelEU Maritime regulations. The organization spoke out against the proposal in June 2021 and in a newly released position paper says while it supports the uptake of clean fuels, they fear that FuelEU may become a missed opportunity due to enforcement loopholes.

“Even though an international solution for shipping would be preferable, shipping should contribute its fair share to address the climate crisis, at EU level as well,” said Claes Berglund, ECSA’s President. “ECSA supports the objective of the FuelEU Maritime proposal to foster the market uptake of cleaner fuels that are currently not affordable or commercially available. However, the proposal should be more consistent with other proposals of the ‘Fit for 55’ package and with the overall increased climate ambition of the EU.” 

In the position paper, the organization says that it welcomes the increased climate ambition of the Fit for 55 package, recognizing that the climate crisis is one of the greatest humanitarian, economic and environmental challenges today.

However, ECSA is concerned about what it sees as substantial enforcement loopholes that it believes undermine the environmental objects of the EU. They cite a lack of consistency with other environmental proposals, including RED and Refuel EU Aviation, specifically highlighting that the FuelEU Maritime makes ships and not fuel suppliers subject to the fuel standards. They also cite that verification relies on paper documents, and they believe the regulations create unnecessary administrative burdens.

Under the current proposal, ECSA highlights that enforcement for biofuel blends purchased outside the EU will rely only on paper documents provided by non-EU fuel suppliers. Using these documents to calculate carbon savings may create substantial loopholes and, ECSA warns, a potential "enforcement minefield."

“FuelEU may become a missed opportunity for the uptake of clean fuels in the sector,” said Sotiris Raptis, ECSA’s acting Secretary General. “Making the EU fuel suppliers responsible for meeting the fuel standards will substantially address the enforcement concerns. Fostering demand is key and the EU ETS revenues, the carbon contracts for difference under the EU ETS innovation fund, and a higher multiplier under the Renewable Energy Directive should be used to bridge the price differential between cleaner and conventional fuels.”

Flexibility is welcome, the ECSA says, but a new MRV system is unnecessary and burdensome. Finally, ships should not be penalized when an onshore power supply is not available in ports.

The ECSA is calling for robust enforcement by making EU fuel suppliers responsible for fuel standards as well as steps to bridging the price gap between cleaner and conventional fuels to foster demand for the new alternatives. They recommend sector-specific funds and investment of ETS revenues in the energy transition. They believe that the existing EU MRV regulation also provides a framework where the necessary information should be integrated.

The ECSA is just one of many organizations that have criticized the FuelEU Maritime and ReFuel EU Aviation initiatives. In the spring, 16 environmental groups and NGOs signed a joint letter to the European Commission saying to avoid the promotion of unsustainable fuels, the EC should have excluded biofuels and fossil natural gas from the initiatives. They instead called for a greater focus on green electro-fuels and the use of direct air capture for CO2.

Many of the objections to the FuelEU initiative center on the inconsistencies with other efforts, along with the verification methods and administrative requirements. 

The maritime and aviation proposals were published in July 2021 with public comment periods are concluding. The European Commission will summarize the comments and present them to the European Parliament and Council as the legislative debate proceeds.