The European Commission has announced a €2.9 billion plan to increase investment in green fuels by 2027 to curb carbon emissions from aviation and shipping, which account for around 26.4% of the EU’s transport sector emissions.
With the EU’s binding climate goal of achieving climate neutrality by 2050 compared to 1990 levels, reducing emissions in aviation and shipping is both essential and a challenge for the EU27.
Commercial aircraft and ships are the most difficult means of transport to decarbonise and are still primarily powered by fossil fuels to this day, despite EU legislation aimed at helping the shipping and aviation sectors become climate neutral.
“This package aims to strengthen Europe’s competitiveness while moving decisively towards a net-zero future. By investing in the expansion of renewable and low-carbon fuels, we will make Europe’s transport systems cleaner, more resilient and more affordable for its citizens,” said Apostolos Tsitsikostas, Secretary for Sustainable Transport and Tourism.
The EU executive estimates that around 20 million tonnes of sustainable fuels, including biofuels and electronic fuels, will be needed by 2035 to meet green fuel targets for aviation and maritime transport. Achieving this will require an estimated investment of €100 billion, the European Commission said.
The approximately 3 billion euros announced on Wednesday is expected to be disbursed from the EU’s multiannual budget until 2027 and invested in renewable and low-carbon fuel technologies.
Under current EU law, the maritime sector must reduce greenhouse gas (GHG) emissions by 2% compared to 2025-2020 levels. By 2050, the shipping industry is expected to reduce its GHG intensity by 80%.
In the aviation sector, 20% of sustainable aviation fuel (SAF) (raw materials such as used cooking oil, agricultural waste and recovered carbon) is expected to be supplied at EU airports from 2035. 5% must be e-SAF, a type of synthetic jet fuel made from carbon dioxide, water and renewable electricity.
By 2050, aviation green fuels should account for 70%, of which 35% should be eSAF.
However, according to the European Commission, bio- and e-SAF availability and estimates are far from meeting green fuel needs for aviation beyond 2030.
“Mandatory alone will not make the SAF market work. It’s time for us to collectively acknowledge that and take action to accelerate affordable SAF,” Ourania Georgzakou, managing director of aviation lobby group Aviation Europe (A4E), said in a statement.
“Ultimately, reducing the cost of SAF is essential to ensure that air travel is accessible to everyone, while strengthening the competitiveness of European airlines,” A4E said.
Electronic fuels and biofuels
More than 40 e-fuel production projects are in the planning stages in the EU, but none have yet reached a final investment decision, the European Commission said.
Challenges in scaling up e-fuels are hampered by the availability, cost, and maturity of renewable energy, eligible carbon storage and capture technologies, and the energy intensity associated with green hydrogen production.
Anthony Froggatt, senior director for aviation, shipping and energy at campaign group T&E, welcomed the European Commission’s plans and the introduction of e-fuels.
“For the first time, the EU will develop effective financial instruments to start production. To maintain Europe’s technological leadership in e-fuels, the EU must now deliver on these commitments,” Froggatt said.
Concerns have been raised about the use of biofuels, but Mr Froggatt said it would only “undermine” e-fuel efforts.
“As there are no market barriers to biofuel production, it is important that only e-fuels qualify for the auction,” T&E said in connection with the European Hydrogen Bank auction, scheduled for the end of the year with a €300 million quota for aviation and maritime projects. This is part of the €2.9 billion revealed by the European Commission.
Jim Corbett, environment director at the World Shipping Council (WSC), said the European Commission’s plan was a “promising first step” to accelerate the energy transition in European shipping.
“WSC is keen to work with the European Commission to ensure that the Sustainable Transport Investment Plan provides concrete measures to close the cost gap between renewable marine fuels and conventional bunkers. Without this, production and intake will stagnate despite the liner sector’s already significant ship investment,” the statement reads.
