Changes from plenary report to adopted text

RemovedEXPLANATORY STATEMENT

RemovedBackground

RemovedThe draft Regulation on the use of renewable and low-carbon fuels in maritime transport (FuelEU Maritime) is an integral part of the Fit for 55 package. The proposal by the Commission establishes a common EU framework to increase the development, production and use of low-carbon fuels in shipping. The proposal lays down a technology neutral emission reduction trajectory that forces ship owners and operators to gradually reduce emissions from their vessels. The proposal also establishes a requirement for ships to connect to on-shore power supply in certain situations in order to limit harmful air pollution.

RemovedEconomic context of the proposal

RemovedMaritime transport accounts for around 75% of EU external trade and 31% of EU internal trade in terms of volume. 400 million passengers embark or disembark annually in ports of Member States, including around 14 million on cruise ships. Maritime transport is therefore an essential component of Europe’s transport system and plays a critical role for the European economy.

RemovedIn order for the maritime sector to contribute to overall decarbonisation efforts, new fuels and propulsion technologies need to be deployed and the sector has far-reaching ambitions in this regard. It is nevertheless both complicated and expensive to make the transition happen. Fuel costs make up between 35 % and 53 % of the total operating cost in shipping. The proposed regulation would significantly increase fuel prices and thus have a major impact on total shipping costs. Furthermore, the Rapporteur stresses that added costs in the transport phase passes on to the manufacturing and retail phases, ultimately hitting consumers. The economic burdens will be felt hardest by low-margin industries and low-income households, which calls for compensatory actions to keep transport freight rates down and safeguard people’s purchasing power. The Rapporteur proposes an obligation for the Commission to present measures offsetting the new compliance costs introduced, in order to prevent the total level of regulatory burden from increasing.

RemovedScope and level of ambition

RemovedThe Commission’s emission reduction trajectory targets ships above 5000 gross tonnes and encompasses 100% of their intra-EU voyages and 50% of their voyages between EU ports and ports located in third countries. The Rapporteur supports the level of ambition proposed by the Commission, as well as the ship type and geographical scope. The maritime sector's intrinsic global character underlines the importance of a level playing field where rules apply irrespective of a ship’s flag state. Seeking international solutions that apply equally across the globe will be key to achieving the major emission reductions necessary. The Rapporteur sees this Regulation as an important tool to fast-forward negotiations within the International Maritime Organization (IMO) on global greenhouse gas standards and to spur a behavioural change in terms of uptake of low-carbon and renewable fuels among maritime operators acting in European seas and calling on EU ports.

RemovedGiven that the Regulation is the first of its kind, with a risk of unknown side effects, the Rapporteur believes that focus should be on the largest actors, which generate the lion’s share of emissions, while preventing the compliance costs from hitting the smallest shipping companies. Clear review clauses will however be included in the Regulation in order to monitor whether there are overriding reasons to change the scope, not least in case the IMO adopts binding global GHG standards. In that case, the Rapporteur suggests that the rules should be fully streamlined to remove any competitive disadvantage for European shipping companies.

RemovedCalculation of emission factors and compliance

RemovedThe Regulation provides tables with default reference values for the calculation of emission factors for fuels from well-to-tank and from tank-to-wake. These default values should, depending on the fuel mix bunkered by a vessel, constitute the basis for determining a ship’s compliance or non-compliance. The Rapporteur suggests that the use of default values laid down in the annexes should be complemented by the possibility for a ship owner or operator to use real values for well-to-tank and tank-to-wake emissions provided that the actual values are certified by means of laboratory testing or direct emissions measurements. The default values can then help avoid lengthy and bureaucratic testing procedures for the vast majority of owners and operators, while those that are frontrunners in terms of technological development and low-carbon propulsion can be rewarded if they outperform the default values.

RemovedOn-shore power supply

RemovedStimulating the use of on-shore power supply (OPS) when vessels are at berth can remedy harmful local air pollutants and be one among many measures to reduce the maritime sector’s carbon footprint. FuelEU Maritime’s sister-Regulation, the Alternative Fuels Infrastructure Regulation (AFIR), lays down provisions on ports to provide the opportunity to connect, while FuelEU Maritime imposes on ship owners and operators to use these connections when at berth. The respective provisions in these two Regulations must be completely streamlined to avoid stranded assets and to ensure that investments are made where reasonable and effective. The Rapporteur proposes that the obligation to connect to OPS supply should apply to ships calling on ports falling inside the scope of AFIR and not on all EU ports, in order to safeguard the competitiveness of smaller non-TEN-T ports and avoid dramatic redistributions of traffic that would damage the connectivity and economic standing of regions dependent on such ports. The Rapporteur sees a need to lower the economic threshold for the deployment and use of OPS, through a permanent tax exemption on electricity supplied through OPS.

RemovedConclusion

RemovedThe Rapporteur shares the ambition to decarbonise maritime transport and appreciates the technology neutral approach proposed by the Commission, which will ensure that stakeholders in the sector can deploy the most efficient solutions without political micromanagement. The flag neutral approach and extra-EU scope increase chances of achieving an international solution within the IMO. The Rapporteur reiterates that Europe’s global competitiveness must be safeguarded and that recurring report and review procedures will be paramount to identify possible undesirable consequences and prevent carbon, investment and job leakage. The Rapporteur underlines that emission limits must be phased in gradually, in a pace that allows stakeholders to adapt in a cost effective way, ensuring decarbonisation at a price that is bearable for consumers.