Accelerating Sustainability in the Maritime Community: Understanding the New EU Regulations

As the world continues its collective effort to combat climate change, on the 25 July 2023 the European Union (EU) has taken a significant stride towards a greener future by introducing two crucial regulations that will profoundly impact the maritime community. The newly adopted "FuelEU maritime" initiative and the "Alternative Fuels Infrastructure Regulation (AFIR)" which are key components of the EU's ambitious "Fit for 55" package, which aims to reduce the EU's net greenhouse gas emissions by at least 55% by 2030 and achieve climate neutrality by 2050.

Links provided here below:

• Regulation on the use of renewable and low-carbon fuels in maritime transport (FuelEU Maritime initiative), 25 July 2023
• Regulation on deployment of alternative fuels infrastructure (AFIR), 25 July 2023

FuelEU Maritime: Decarbonizing the Maritime Sector

The FuelEU maritime initiative sets out to transform the maritime industry by driving the adoption of renewable and low-carbon fuels. This regulation is applicable to all cargo and passenger ships above 5000GT.

The main objectives of this regulation are to:

1. Gradually Decrease Greenhouse Gas Intensity of Fuels: The new law mandates that the greenhouse gas intensity of fuels used by the shipping sector will decrease over time. Starting from 2025, there will be a 2% reduction in intensity, with an ambitious target of achieving an 80% reduction by 2050. This measure will incentivize shipowners and operators to shift towards cleaner and sustainable fuels, significantly reducing the carbon footprint of the maritime sector.
2. Support for Renewable Fuels of Non-Biological Origin (RFNBO): To accelerate the uptake of renewable fuels with high decarbonization potential, the regulation introduces a special incentive regime for RFNBO. This provision aims to stimulate the large-scale production of sustainable maritime fuels, supporting the EU's climate targets and fostering innovation in the industry.
3. Exclusion of Fossil Fuels: In a significant move towards sustainability, the regulation excludes fossil fuels from the certification process. This step reinforces the EU's commitment to phasing out conventional fuels and embracing greener alternatives.
4. On-Shore Power Supply Obligation: As of 2030, passenger ships and containers will be obligated to use on-shore power supply while moored at the quayside in major EU ports. This measure aims to mitigate air pollution in port areas near densely populated regions, promoting cleaner practices and reducing emissions during port stays.
5. Voluntary Pooling Mechanism: The regulation introduces a voluntary pooling mechanism, allowing ships to collaborate and combine their compliance balance with other vessels. The pool, as a whole, must meet the greenhouse gas intensity limits on average, fostering collective efforts in achieving climate goals.

AFIR: Advancing Alternative Fuels Infrastructure

The AFIR is another milestone in the EU's mission to promote sustainable transport across Europe. This regulation is mainly addressed to Member States and aims to deploy more recharging and refueling stations for alternative fuels, enabling the transport sector to significantly reduce its carbon footprint.

Key provisions of AFIR include:

1. Shore-Side Electricity Supply Targets: Member States must ensure that by December 31, 2029, TEN-T maritime ports equipped with appropriate infrastructure provide shore-side electricity supply for a significant portion of port calls made by seagoing container ships, seagoing ro-ro passenger ships, and other seagoing passenger ships above 5,000 gross tonnes.
2. Target Percentage for Shore-Side Electricity: The target is to provide shore-side electricity supply for at least 90% of the total number of port calls for each category of ships mentioned above. The specific percentage applies to ports based on the number of port calls averaged over the last three years and the type of ships calling at the port.
3. Inland Waterway Ports Target: Member States must deploy at least one installation providing shore-side electricity supply to inland waterway vessels at all TEN-T core inland waterway ports by December 31, 2024.
4. TEN-T Comprehensive Ports Target: For TEN-T comprehensive inland waterway ports, at least one installation providing shore-side electricity supply to inland waterway vessels should be deployed by December 31, 2029.
5. Deployment of Refueling Points for Methane: Member States must ensure an adequate number of refueling points for liquefied methane are deployed at TEN-T core maritime ports by December 31, 2024, to support seagoing ships' circulation throughout the TEN-T core network.

The Impact on the Maritime Community and Actions for Compliance

Both regulations have far-reaching implications for the maritime community. To comply with these regulations and contribute to the decarbonization of the sector, stakeholders in the maritime industry should consider the following actions:

1. Invest in Sustainable Fuels: With the FuelEU maritime initiative targeting a gradual reduction in greenhouse gas intensity, shipowners and operators must invest in renewable and low-carbon fuels. Exploring RFNBO and sustainable alternatives will be critical in meeting the ambitious reduction targets.
2. Adopt On-Shore Power Supply: To comply with the on-shore power supply obligation in major EU ports, shipowners of passenger vessels and containers should prepare for the transition to cleaner energy sources while moored. Collaborating with ports and authorities will be essential to facilitate this transition.
3. Leverage the Pooling Mechanism: Shipowners can optimize compliance efforts by participating in the voluntary pooling mechanism. Pooling compliance balance with other vessels can help meet greenhouse gas intensity limits collectively, promoting cooperation within the maritime community.
4. Address Regional Considerations: Shipowners operating in outermost regions, small islands, and economically connected areas should be aware of the time-limited exceptions granted by the regulation. Understanding these exceptions and aligning strategies accordingly will support smooth compliance.
5. Prepare for Enhanced Monitoring and Reporting: Shipowners and operators must be ready to undergo monitoring and reporting processes as part of the regulations. Maintaining transparent records and aligning with the EU's reporting requirements will be essential. By 31 August 2024, companies shall submit to the verifier a monitoring plan for each of their ships. By 30 June of the verification period, the verifier shall issue a FuelEU Document of Compliance for the ship concerned.
6. Invest in Alternative Fuel Infrastructure: For maritime stakeholders looking to adapt to AFIR, investing in alternative fuel infrastructure will be crucial. Aligning with the deployment targets for recharging and refueling stations will facilitate the adoption of alternative fuels in the maritime sector.
7. Promote Intermodal Connectivity: Collaboration with ports, airports, and other transport infrastructure providers will be necessary to promote intermodal connectivity and the development of alternative fuel infrastructure.

Next steps

Following formal adoption by the Council on 25 July, the new regulation will be published in the EU’s official journal after the summer and will enter into force the twentieth day after this publication. The new rules will apply from six months after the date of entry into force of the regulation.

Conclusion: A Sustainable Voyage Ahead

The adoption of the FuelEU maritime initiative and the Alternative Fuels Infrastructure Regulation marks a defining moment in the EU's commitment to sustainability in the maritime community. As the world intensifies efforts to combat climate change, these regulations will play a crucial role in reducing the sector's carbon footprint and aligning it with the EU's ambitious climate targets.

As the maritime community adapts to these new regulations, it is essential to leverage innovation and collaboration to foster a more sustainable and environmentally friendly industry. Embracing renewable and low-carbon fuels, investing in alternative fuel infrastructure, and promoting intermodal connectivity will be critical steps in meeting the EU's climate targets and building a greener future for the maritime sector.

Ready to navigate the maritime industry with confidence? Subscribe to "The Maritime Edge" now and stay ahead on the latest compliance updates, growth strategies, and industry trends. Don't miss out on exclusive content, sign up today and empower your business for a sustainable future! ???? Subscribe at https://www.dhirubhai.net/newsletters/the-maritime-edge-7091303992768499712/

#FuelEU #AlternativeFuels #Sustainability #MaritimeCommunity #ShippingIndustry #Decarbonization #shipowners #shipmanagement #maritimeindustry #classification #shippingnews #maritimenews #surveyor

Mentions: @EuropeanCommission @EUTransport @EUClimateAction