Europe risks losing ground to China in the race to produce zero-emission maritime fuels, unless more e-fuel projects receive regulatory and financial support, Transport & Environment (T&E) has said.
As T&E noted, Europe is home to 69 e-fuel projects capable of scaling up to serve the maritime sector, but only six are currently operational. At the same time, China currently has just three operational e-fuel facilities, however these are producing ten times more fuel than Europe’s plants.
‘This highlights the difficulty Europe is having in getting big projects off the ground,’ T&E commented. ‘Effective financial support combined with clean fuel targets at the EU level would ensure the EU remains competitive in this strategic new market.’
FuelEU Maritime regulation
The launch of the EU’s FuelEU Maritime regulation in 2023 has encouraged investment in maritime e-fuel projects, with Spain home to the largest number of planned developments, followed by Denmark, Finland and France.
If all of these projects were to become operational, European production could reach 4.09 million tonnes of oil equivalent (Mtoe) annually by 2033, enough to meet 14% of European shipping’s fuel needs.
Progress remains slow, T&E said, however some projects, such as the Andalusian Green Hydrogen Valley project in Spain, which reached final investment decision earlier this year, hint at a more optimistic outlook.
Chinese dominance?
As the group added, China’s ability to develop larger-scale facilities more quickly could enable it to dominate future exports of synthetic fuels to Europe if domestic production fails to accelerate. Europe ‘must invest’ in local e-fuels production to ensure it stays ahead, said T&E.
“While Europe hesitates, China is actually getting e-fuels off the ground,” commented Constance Dijkstra, maritime policy manager at T&E.
“If Europe wants to be a leading e-fuels producer, it needs to bridge the price gap between EU-made e-fuels and fossil fuels, and get shipping companies to start using those fuels instead of defaulting to imported LNG or biofuels.” Read more here.
