The Council of the EU has today formally adopted the FuelEU maritime initiative, which aims to cut greenhouse gas emissions from ships operating in Europe by 80% by 2050, as well as increasing the uptake of green hydrogen-based “renewable fuels of non-biological origin” (RFNBOs).

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Green hydrogen and its derivatives, including ammonia, methanol, and synthetic methane, have often been suggested as future low-carbon fuels for shipping, an otherwise hard-to-abate sector.

FuelEU, which will be published in the Official Journal of the EU and become law after the summer, requires all ships with a gross tonnage above 5,000 — regardless of what flag they fly — to cut greenhouse gas emissions by 2% from the start of 2025 against a reference emissions intensity of 91.16 grams of CO2 equivalent per MJ of energy used.

This progressively rises to 6% from 2030, 14.5% from 2035, 31% from 2040, 62% from 2045, and final 80% from 2050.

These emissions savings will be calculated based on energy used while at port in a member state’s jurisdiction, while travelling between two member states’ ports, or half of the energy used on voyages between a member state and a non-EU country.

Companies operating ships in a given member state are required to submit an emissions monitoring plan to the country’s accredited verification agency by 31 August 2024.

A second rule will force operators of seaborne vessels to use at least 1% of green hydrogen-based fuels by 2034.

To incentivise the uptake of RFNBOs, FuelEU allows greenhouse gas emissions savings from using these fuels to be counted twice up to the end of 2033.

These RFNBOs must follow the definitions set out by the EU’s Delegated Acts, including a 70% reduction in greenhouse gases from “well-to-wake” — in other words, throughout energy production, transport, distribution and use or combustion on board the vessel.

The European Commission will also regularly monitor the use of RFNBOs as a share of final energy used by a ship falling under FuelEU regulation per year.

If this share is below 1% for 2031, the EU will introduce a subtarget for RFNBOs to make up 2% of fuels used by ships from 2034.

However, FuelEU includes a caveat that if “there is evidence of insufficient production capacity and availability of RFNBO to the maritime sector, uneven geographical distribution or a too high price of those fuels, the subtarget provided for… shall not apply”.

Despite the promise of hydrogen derivatives to power maritime propulsion, some have argued that they will not be economically viable until 2040 while others have questioned whether there will even be sufficient supply of green ammonia or methanol by 2030 or if shipping will have to compete with other sectors for these chemicals.