European shipping associations for ETS regime to cover lifecycle assessment of fuels

European shipping trade associations, including Danish Shipping, the World Shipping Council, Renewable Hydrogen Coalition and Methanol Institute, have called on the EU to include lifecycle assessment of fuel emissions in the EU Emissions Trading System (ETS).

PHOTO: Aerial view of oil tanker. Getty Images

In an open letter sent to Members of the European Parliament and Member State negotiators, the signatories argued that fuels should be assessed on ‘well-to-wake’ basis. This will distinguish fuels based on their carbon footprints throughout production, distribution and consumption, and will help increase uptake of green fuels, they say.

Citing the example of methanol, which can be produced from both renewable and fossil energy sources, the signatories say the “impact on the climate differs wildly.”

The group argues that the current ETS proposal could encourage use of fuels that emit zero emissions at the point of combustion, but have high emissions during production.

Shipping will be incorporated into the EU ETS from next year. They ask for shipping ETS revenues to be earmarked towards decarbonisation of the maritime sector.

This revenue can be used to narrow the price gap between conventional and low-carbon fuels, support research and development of innovative propulsion technologies, and boost infrastructure for alternative fuels, the signatories say.

By Shilpa Sharma

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