FuelEU Maritime rune reading
The dust has barely settled on the draft agreement of the EU’s FuelEU Maritime legislation, which has seen difficult issues surrounding the admissibility of carbon-based fuels, the range of renewable fuels of non biological origin (RFNBO), certification and the allocation of funding resolved.
The rules themselves are likely to achieve their primary objective of encouraging the early adoption of sustainable alternative marine fuels into the market, which is intended to support the development of the EU’s domestic alternative fuels infrastructure.
The maritime sector is being asked to play a major role in the introduction of alternative fuels into Europe’s supply chain, acting as some of the first stable sources of demand, which will give European fuel suppliers the certainty to develop supply.
The creation of stable reliable demand will then allow alternative fuel suppliers to overcome the myriad technical and economic challenges that introducing alternative fuel supplies will entail – and Say’s Law will then begin to apply as expanding supply begins to create its own demand. Or to put it another way, the chicken and the egg problem is skirted by funding a poultry farm.
But for operators in Europe’s short-sea sector who do not have the appetite or means to invest in offtake agreements with green methanol suppliers, the shortage of commercially available methanol for bunkering remains a key constraint to investment decisions.