Europe’s e-fuels development for shipping remains in a fragile state of development, reports Safety4sea, citing Transport and Environment (T&E) analysis.
e-fuels development for shipping
In its 2025 update of the shipping e-fuels observatory, T&E examined 80 European green hydrogen and e-fuels projects that could serve the maritime sector. While some have progressed in their development, total shipping e-fuels production appears unlikely to reach targeted levels, unless new policy incentives are implemented.
Although the listed projects could produce 3.6 million tonnes of oil equivalent (Mtoe) by 2032, less than 5% is dedicated primarily to shipping. This sends a weak signal to the maritime sector considering that those volumes are below FuelEU’s 2031 1% e-fuel uptake threshold and well below the 2034 sub-target of 2%.
In the absence of clear EU and national policies combined with dedicated financial incentives, Europe’s shipping e-fuels targets are likely to be met with imported fuels (or not met at all) representing a missed opportunity for Europe’s climate leadership as well as to further its industrial and energy security goals.
However, while the maritime sector’s transition towards e-fuels is slow, it is not backsliding: Denmark’s Kassø e-methanol project became operational in 2025 and produces 0.02 Mtoe of e-methanol, part of which already goes to shipping.
Countries such as Spain and France have potential volumes up 1.1 Mtoe/year that could potentially serve maritime, while Norway has the highest potential volumes targeting the maritime sector at 0.13 Mtoe annually, primarily in the form of e-ammonia.
Policy recommendations
Considering the slow development of green hydrogen and e-fuels projects dedicated to the maritime sector in Europe – despite the long-term need to accelerate e-fuel uptake in shipping and the potential strategic benefit to the EU – T&E recommends the following policy options to incentivise their use:
- Allocate a share of shipping ETS revenues at the EU level to support RFNBO production in Europe.
- Restrict the EU-wide double-sided auction announced in the Sustainable Transport Investment Plan (STIP) to RFNBOs only, given that advanced biofuels are already incentivised through FuelEU which does not allow food and feed crop-based biofuels for compliance purposes.
- Consider increasing the conditional RFNBO sub-quota under FuelEU. Simplify the regulation by removing the 2031 1% RFNBO threshold which sends mixed signals to shipping companies and e-fuel producers.
- Change the way the multiplier is incorporated in the GHG attained formula under FuelEU so that it applies both to the ship and pool level.
- Consider encouraging the competitiveness of the European e-fuel industry through dedicated incentives under FuelEU. This could take the form of an obligation for ships calling at EU ports to bunker a specific quantity of EU-made RFNBOs, or incorporating a higher multiplier on the use of EU-made RFNBOs.
- Incorporate the 1.2% RFNBO supply target for shipping suggested under RED III in the national transposition in the remaining member states. Ensure that only RFNBOs are included in this target.
- Establish hydrogen infrastructure deployment targets for the supply and bunkering of e-methanol, e-ammonia and e-hydrogen across TEN-T maritime ports through the Alternative Fuel Infrastructure Regulation (AFIR). Remove the targets for the supply infrastructure of liquefied methane which is already underway and does not need to be further incentivised.
- Incorporate a multiplier of 2 for zero and near-zero (ZNZ) green e-fuels within the GFI compliance guidelines to be developed at the IMO.
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Source: Safety4sea
