Report: EU Low-Carbon Bunker Mandate Could Lock In High-Carbon Fuel

The Brussels-based NGO Transport & Environment has obtained a draft copy of the European Commission's plans to encourage the uptake of "green" marine fuels. If enacted, the proposed legislation would be the world's first low-carbon bunker fuel mandate. However, according to T&E, the proposed package would "lock in the use of fossil fuels" for decades by endorsing two affordable compliance options - crop-based biofuels and LNG - which would outcompete lower-emission e-fuels on price. 

Based on T&E's analysis, over half of the energy used by ships calling in the EU could be supplied by LNG and biofuels by 2035 under the draft proposal. Given the powerful warming effect of methane, LNG comes with challenges related to fugitive emissions, according to T&E. Crop-based biofuels can result in higher net greenhouse gas emissions than fossil fuels, with heavy use of fertilizers driving up total lifecycle climate impact.

The analysis forecasts that under the EC's draft plan, inexpensive biofuels would account for one fifth of all bunker fuel used by ships calling at EU ports by 2035. Even if the biofuel were produced from used cooking oil (UCO), a renewable source, it would exacerbate an existing supply gap for UCO - raising the need to import more feedstock and likely drawing unsustainable virgin oils (like palm oil) into the supply chain. 

As a remedy, T&E called on the EC to exclude crop-based biofuels and fossil natural gas from the list of compliance options for the mandate. It also advocated for strong incentives for shipowners to adopt green e-fuels like ammonia and hydrogen. 

"This supposedly green fuels law would push the cheapest alternatives, which are also the most destructive. Counting fossil gas and biofuels as green will lock shipping into decades of further pollution while we should be promoting renewable hydrogen and ammonia," said Faig Abbasov, T&E's shipping program director. "It’s not too late to save the world’s first green shipping fuel mandate. The EU Commission should exclude LNG, crop biofuels and, at a minimum, apply the same sustainability criteria for waste biofuels as under the Renewable Energy Directive."