EU raises the target for shipping’s decarbonisation, but IMO doesn’t yet


The European Commission has welcomed the political agreement reached between the European Parliament and the Council that increases the maritime transport sector’s contribution to reaching the EU-wide target of reducing net greenhouse gas emissions by at least 55% by 2030, and to achieving climate neutrality in 2050.

On 23 March co-legislators agreed on FuelEU Maritime – a new EU regulation ensuring 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. This measure will help reduce greenhouse gas emissions from the shipping sector by promoting the use of cleaner fuels and energy.

The deal complements the provisional agreement reached on 18 December 2022 to include shipping emissions in the EU Emissions Trading System (EU ETS), both key initiatives in the EU’s efforts to reduce maritime emissions.

FuelEU Maritime will help decarbonise the maritime transport sector by setting maximum limits on the yearly greenhouse gas intensity of the energy used by a ship. Those targets will become more ambitious over time to stimulate and reflect the expected developments in technology and the increased production of renewable and low-carbon fuels. The targets cover not only CO2, but also methane and nitrous oxide emissions over the full lifecycle of the fuels.

The new rules also introduce an additional zero-emission requirement at berth, mandating the use of on-shore power supply (OPS) or alternative zero-emission technologies in ports by passenger ships and containerships, with a view to mitigating air pollution emissions in ports, which are often close to densely populated areas.

FuelEU Maritime takes a goal-based and technology-neutral approach, allowing for innovation and the development of new fuel technologies to meet future needs, and offering operators the freedom to decide which to use based on ship-specific or operation-specific profiles. The Regulation also provides for a voluntary pooling mechanism. Under this scheme, ships will be allowed to pool their compliance balance with one or more other ships. Thus, it will be the pool as a whole that has to meet the greenhouse gas intensity limits on average.

The political agreement must now be formally adopted. Once this process is completed by the European Parliament and the Council, the new rules will be published in the Official Journal of the European Union and enter into force 20 days after publication.

The European Green Deal is the EU’s long-term growth strategy to make Europe climate-neutral by 2050. To reach this target, Europe must reduce its emissions by at least 55% by 2030, compared to 1990 levels. The latest agreement is hailed by the Commission as another important step in the adoption of its ‘Fit for 55’ legislative package to deliver on the European Green Deal. It follows other political agreements on parts of this package, most recently on stronger rules to boost energy efficiency.

Meanwhile, the IMO Intersessional Working Group on Reduction of GHG Emissions from Ships (IMO ISWG-GHG 14.) concluded last week without setting any higher GHG emission reduction targets than before.

Guy Platten, the Secretary General of the International Chamber of Shipping, commented: “We are disappointed by the lack of progress on setting new levels of ambition for GHG reductions to provide shipping with a clear net zero target for 2050. But we remain optimistic that a deal can still be stuck at the crucial MEPC meeting in July.

“More positively, governments are increasingly understanding the value of the ICS Fund and Reward proposal to accelerate the production and uptake of low and zero-carbon fuels.”