COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the Proposal for a Regulation of the European Parliament and of the Council on the use of renewable and low-carbon fuels in maritime transport
Date: 2021-07-14
Institutions: Directorate-General for Mobility and Transport, European Commission
Subjects: energy resources, greenhouse gas, marine fuel, maritime transport, pollution from ships, reduction of gas emissions, renewable resources

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   EUROPEAN COMMISSION  Brussels, 14.7.2021  SWD(2021) 636 final  COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the Proposal for a Regulation of the European Parliament and of the Council on the use of renewable and low-carbon fuels in maritime transport {COM(2021) 562 final} - {SEC(2021) 562 final} - {SWD(2021) 635 final}  
 
 
Impact assessment on FuelEU Maritime 

Executive Summary Sheet 

A. Need for action 

Why? What is the problem being addressed?  
The current maritime fuel mix relies almost entirely on liquid fossil fuels or liquefied natural gas. Ramping up the 
use of renewable and low-carbon fuels (RLF, including liquid biofuels, e-liquids, decarbonised gas (incl. bio-LNG 
and  e-gas),  decarbonised  hydrogen,  decarbonised  hydrogen-derived  fuels  (including  methanol,  and  ammonia) 
and electricity) will be essential for maritime transport to contribute to the EU climate goals. Under the modelling 
undertaken in support of the 2030 Climate Target Plan (CTP), RLF should provide 6-9% of the maritime fuel mix 
in 2030 and 86-88% by 2050 to contribute to the climate neutrality objectives by 2050. Several drivers underpin 
this problem: (1) lack of predictability in the regulatory  environment and resulting in high  investments risks, (2) 
low maturity of alternative technologies with high investment risks for first movers, (3) higher costs of alternatives 
compared  to  fossil  fuels,  (4)  interdependency  between  demand,  supply  and  distribution  aspects,  and  (5) 
possibility of bunkering outside the EU, which implies a risk of carbon leakage.  

What is this initiative expected to achieve?  
The general objective of this proposal is to provide a clear regulatory framework to facilitate planning and long-
term  investments  in  the  maritime  sector  and  complement  existing  legislation  (Alternative  Fuel  Infrastructure 
Directive  -  AFID,  Renewable  Energy  Directive  -  RED)  by  providing  a  clear  signal  for  market  demand  on  RLF 
while  reducing  the  risk  of  carbon  leakage.  The  proposal  is  therefore  expected  to  improve  the  use  of  RLF, 
facilitate  the  production  and  use  of  mature  options  and  stimulate  technology  development.  In  doing  so,  it  will 
complement other initiatives of the ‘Fit for 55’ package to address maritime emissions (e.g. inclusion of maritime 
transport in the EU Emission Trading System, revision of Energy Tax Directive, AFID and RED). 

What is the value added of action at the EU level?  
The cross-border dimension of the sector requires coordinated action at EU level. Without action at EU level, a 
patchwork  of  incoherent  regional  or  national  requirements  might  develop.  The  identified  problems  and  the 
underlying drivers do not fundamentally differ from one Member State to another, so it is preferable to address 
these issues at EU level. This proposal would contribute to achieving EU-wide economies of scale by using RLF, 
while avoiding carbon leakage. At the same time, it would ensure a level playing field between operators calling 
in EU ports and between the EU ports. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
Three policy options have been considered. They share two main characteristics: (i) providing legal certainty and 
focusing on demand-side aspects to stimulate production and (ii) using RLF while addressing the chicken-and-
egg situation to avoid carbon leakage. The options differ on their approach to technology choice and the way the 
required performance is achieved.  
Option 1 is a prescriptive approach, requiring shares of specific fuels to be used. It implies a technology choice 
by the regulator. Both options 2 and 3 are goal-based, setting maximum greenhouse gas intensity limits for the 
energy  used  on-board.  This  leaves  the  technology  choice  to  market  operators.  Option  3  also  contains 
mechanisms  to  reward  over-achievers  (pooling  and  multipliers  for  zero-emission  technologies).  All  options 
require the most polluting ships in ports (containerships and passenger ships) to use on-shore power supply (or 
an equivalent zero-emission technology).  
Following  the  assessment,  policy  option  3  is  identified  as  the  preferred  option.  It  strikes  the  best  balance 
between  the  objectives  to  be  achieved  and  the  overall  implementation  costs.  The  goal-based  and  technology-
neutral  approach  answers  the  need  for  flexibility,  which  have  been  stressed  by  stakeholders  during  the 
consultation process (in particular operators and ports). The mechanism for rewarding over-compliance reduces 
the risk of technology lock-in. 

Who supports which option?  
The  consultation  results  show  that  all  stakeholder  groups  favour  a  goal-based  approach  over  a  prescriptive 
oneboth  for  ships  in  navigation  and  at  berth.  Another  preference  among  most  stakeholders  is  technology 
neutrality.  Multiple  stakeholders,  including  in  particular  NGOs  and  technology  suppliers  explicitly  indicate  that 
prescriptive measures for a certain technology would be suboptimal, because of the high risk of technology lock-
in and stranded assets. Option 3 has therefore been recognised as the stakeholders’ preferred option. 

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C. Impacts of the preferred option 

What are the benefits of the preferred option?  
All costs and benefits are expressed in relation to the baseline scenario, as present value over the 2021-2050 
period  (in  constant  prices  of  the  year  2015).  The  increased  penetration  of  RLF  in  the  maritime  fuel  mix  will 
translate  into  a  significant  reduction  in  GHG  emissions  and,  to  a  lower  extent,  of  air  pollution  emissions. 
Monetized benefits have been estimated at €10bn for air pollution and €138.6bn for climate change. 
Savings of €2.3bn are expected to be achieved by ship operators due to reduced operating costs (maintenance, 
crew, etc.). These projections also factor in a small decline in maritime transport activity. 
An  additional  noticeable  impact  concerns  the  use  of  advanced  fuels  and  propulsion  technologies  and  their 
indirect  impact  on  innovation.  The  proposal  is  expected  to  boost  the  penetration  of  fuel  cell-powered  vessels 
(18.9%)  in  the  fleet  as  well  as  electric  propulsion  (5.4%)  by  2050  (compared  to  no  penetration  of  these 
technologies  in  the  baseline  scenario).  Additional  environmental  benefits  may  derive  for  instance  by  the 
increasing use of electricity in ports and during navigation, such as the reduction of underwater noise or water 
pollution from deposition of exhaust gases in the sea, but these have not been assessed. 

What are the costs of the preferred option?  
Ship operators will bear the main cost under the proposal, which amounts to €89.7bn. It results from increased 
capital costs (€25.8bn) and fuel costs (€63.9bn). Indirect costs for ports will be linked to the necessary bunkering 
infrastructure, which are estimated at €5.7bn. 
Administrative costs for ship operators are estimated at €521.7m resulting from data collection, submission and 
verification of the compliance plans and the annual energy report, cooperation during audits and inspections as 
well as crew training. An additional €1.8m have been identified to develop guidelines for ports to guarantee the 
safe handling of RLF. Specific costs for fuel certification could not be quantified.  
Enforcement costs for public authorities are expected to be limited (€1.5m) and the focus will be on providing the 
necessary IT reporting tools.  
The preferred option provides net benefits amounting to €58.4bn over the time horizon of the proposal. 

How will businesses, SMEs and micro-enterprises be affected?  
To increase flexibility and recognise the different operating conditions, businesses, including SMEs, will have a 
flexibility in the choice of RFL. When considering options to allow for pooled compliance, the fleet approach was 
rejected  to  not  discriminate  against  SMEs.  Instead,  averaging  by  voluntary  transfer  allowing  compensation  of 
balances between operators was preferred.  

Will there be significant impacts on national budgets and administrations?  
As compliance  will be assessed by third-party  verifiers and  will mostly rely on  existing IT tools  provided at EU 
level, the impact on national budgets and national administrations is limited. Since verification is a pre-condition 
for  issuing  the  document  of  compliance,  the  need  for  increased  port  state  control  inspections  is  considered 
minimal.  

Will there be other significant impacts?  
Competitiveness  of  the  EU  maritime  sector  is  likely  to  improve  through  a  better  position  of  R&I  institutes  and 
technology  providers.  The  impact  of  increases  in  fuel  costs  on  freight  rates  costs  is  expected  to  be  relatively 
modest. The increase in diesel-blend costs could result in a 0.8% to 15.1% increase of the freight rate by 2050 
(0.1% to 2.5% by 2030). 

D. Follow up 

When will the policy be reviewed?  
Based  on  data  collected  under  Regulation  (EU)  2015/757  and  additional  information  obligations  under  this 
proposal to demonstrate compliance, the RFL penetration rate will be closely monitored on a yearly basis. The 
policy will be evaluated five years after its implementation date. 

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