The European Union and its individual member states are pulling in billions of dollars in carbon tax revenue from the maritime sector under the Emissions Trading Scheme (ETS), but aren’t reinvesting all the money into maritime decarbonization – and the European Community Shipowners’ Associations (ECSA) want that to change.
According to ECSA, European shipping stakeholders pay about $10 billion in EU and member-state ETS fees every year in order to burn conventional carbon-based bunker fuel. In addition to the tax payments, European owners also lead the world in investment in green fuel-ready tonnage, and account for nearly half the global orderbook in this segment. But green fuel supplies are very scarce for shipping in Europe, and the ETS fee revenue could be used to help with that.
“This money should be used at EU and national level to bridge the price gap and support sustainable fuel availability and clean tech projects. This is key for the energy transition of the sector and for the energy security of the continent,” said ECSA secretary general Sotiris Raptis. “Asia leads with 74% of fuel production projects, while Europe accounts for just 10%. Less than 5% of European sustainable fuel production is currently intended for maritime use.”
Get the latest maritime news delivered to your inbox daily.
According to ECSA, green fuel for shipping is currently about four times more expensive than the conventional alternatives. Without a subsidy to bridge the price gap and make sustainable fuels more competitive, it will be hard to secure the investments needed to bring adequate supplies of those next-generation fuel products to market, the association says.
Green hydrogen projects – which underpin hopes for green methanol and green ammonia production – got canceled at a rapid clip in 2025 in a major market realignment. In addition to market pricing challenges, project developers say that their progress is heavily impeded by an EU rule that bans them from sourcing green electricity from existing power sources. The EU’s “additionality” requirements force hydrogen-plant operators to only get their power from newly built renewable generating sources – and those power sources must be built without EU subsidies, in order to avoid “subsidy stacking.” According to Hydrogen Insight, that rule is damaging the prospects of EU-based H2 production plants.
