LNG and biofuels bunker consumption is set to rise rapidly over the next 15 years due to the European Union’s first ever regulations requiring ships to switch to sustainable fuels, according to environmentalist group Transport & Environment (T&E).
The European Commission is drafting the FuelEU Maritime initiative and a formal proposal is expected in July.
The new rule will regulate marine fuel standards for vessels of 5,000 gt or above travelling to, from or between EU ports, according to a leaked proposal obtained by T&E.
Industry observers believe the initiative — aimed at helping the EU achieve its climate targets — will come into force by 2025.
In the leaked document published by T&E, the EC stated it would prefer to take “a goal-based approach with a mechanism to reward overachievers”.
The EC estimates the regulation will result in just a 2.7% increase in expenses for ship operators.
But T&E said such an approach would prompt the shipping sector to shift to the cheapest, most available fuels, such as LNG and biofuels, rather than new zero-emission fuels.
The Belgium-based group’s analysis shows the proportion of LNG in Europe’s bunker mix will reach 35.3% in 2035, compared with 1.2% in 2020.
Total LNG consumption as marine fuel will reach 7m tonnes by 2030 and 11.2m tonnes by 2035.
Biofuels will account for 20% of the bunker mix in 2035, versus a negligible level last year, according to the T&E analysis.
The changes are expected to achieve a 15% reduction in greenhouse gas emissions per EU-related transport work.
But T&E said the proposed rule would be “a climate disaster” in the long run as LNG releases methane when burned.
T&E added that most biofuels are produced from crops and have adverse environmental effects, and those that offer emissions savings are not available at scale.
Faig Abbasov, T&E's shipping programme director, said: “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.”
Abbasov called on the EC to exclude LNG and crop-based biofuels in its final FuelEU Maritime proposal.
He said: “There also needs to be incentives for the uptake of e-fuels, green hydrogen and ammonia, such as dedicated sub-targets or multipliers to boost their competitiveness.”
TradeWinds has approached the EC for comment.
