The Importance of Building a Robust Supply Chain for Renewable and Low-Carbon Fuels in Europe

For Europe to meet its decarbonization objectives, a ‘robust’ supply chain for renewable and low-carbon fuels must be built on the continent, Clean Maritime Fuels Platform, an industry initiative that aims to improve communication between the shipping sector and fuel producers, has shared.

Smooth access to sustainable marine fuels is a top priority for the decarbonization of the shipping industry, which has been identified as one of the most challenging sectors to decarbonize according to the Draghi report on the future of European competitiveness. With an estimated €40 billion in annual investments needed between 2031 and 2050 to achieve climate neutrality objectives in shipping, the importance of a sustainable fuel supply chain cannot be overstated.

Renewable and low-carbon fuels face uncertainties that deter public and private investment, including technological risks, high upfront capital requirements, production costs, and discrepancies in business models between producers and users. These challenges pose financial risks that may require tailored public support beyond existing EU initiatives.

To address these challenges effectively, the Clean Maritime Fuels Platform has suggested several key actions for the European Commission:

• Include renewable and low-carbon fuels in the Clean Industrial Deal
• Utilize the sustainable transport investment plan to de-risk investments for clean fuel production
• De-risk projects through public financial support from the EU and national ETS revenues
• Facilitate the role of ports as energy hubs through fuel infrastructure mandates

EU’s Commissioner for Sustainable Transport and Tourism Apostolos Tzitzikostas emphasized the importance of the Clean Industrial Deal in setting the stage for a competitive sustainable European industry. Sotiris Raptis, Secretary General of the European Community Shipowners’ Association, highlighted the need for clean fuels to enable the energy transition of shipping and emphasized the vital role of public and private investments in bridging the price gap between clean and conventional fuels.

Angel Alvarez Alberdi, Secretary General of the European Waste-based & Advanced Biofuels Association, emphasized the importance of promoting renewable fuels to strengthen competitiveness and accelerate the shift towards greener shipping. R. Tim Eestermans, Managing Director (Europe) of the Methanol Institute, called for the Clean Industrial Deal to be a catalyst of action, positioning Europe as a leader in clean maritime transition.

Building a reliable supply chain for renewable and low-carbon fuels is not just about cutting emissions; it is about securing Europe’s industrial strength, creating economic opportunities, and enhancing global competitiveness in zero and near-zero GHG emission fuel production. The Clean Maritime Fuels Platform’s initiatives and recommendations are crucial steps towards achieving a sustainable and decarbonized future for the European shipping industry.