In an unprecedented collaboration, European Shipowners | ECSA , Airlines for Europe (A4E) , and the environmental transport group Transport & Environment T&E have issued a joint statement urging the European Commission and EU member states to accelerate the production of clean shipping and aviation fuels in Europe.
This call to action showcases how urgent and decisive measures are required to secure Europe’s leadership in green innovation, reach the ambitious aims of the European Green Deal, and maintain the competitiveness of these industries. The statement, released on February 20, 2025, focuses on the immense challenges faced by the shipping and aviation sectors, which are among the most difficult to decarbonize due to their heavy reliance on fossil fuels.
According to the Draghi report, it is estimated that European shipping alone requires €40 billion annually in investments to decarbonize by 2050. When combined with the needs of the aviation sector, the total investment required for the energy transition in these industries amounts to approximately €100 billion per year. These concerning figures show the scale of the issue at hand and the necessity of ramping up clean fuel production to meet climate goals.
A Unified Vision for Decarbonization
The associations argue that scalable renewable fuels, such as hydrogen-based e-fuels, are necessary to decarbonise the shipping and aviation sectors. These fuels offer a viable pathway to reducing emissions in industries where electrification or other alternatives are not feasible. However, significant barriers, including high production costs, technological risks, and mismatched business models between producers and users, are slowing any progress. Producers often seek long-term contracts at high prices to justify their investments, while users, such as shipping companies and airlines, prefer shorter-term commitments for smaller fuel volumes to mitigate risks. This disconnect creates financial uncertainty that deters private investment.
To address this, a strategy has been outlined that includes public financial support, revenue certainty mechanisms, and infrastructure development. As a first step, the organizations called for the Clean Industrial Deal to include scalable renewable fuels and innovative technologies for shipping and aviation within its scope. These sectors are among the most difficult to decarbonize, and their inclusion in the Clean Industrial Deal will help achieve the EU’s climate and industrial objectives. They also hope to take advantage of the Sustainable Transport Investment Plan (STIP) to reduce investment risk and scale up the production and distribution of renewable fuels. The STIP should aim to produce at least 40% of the fuels required under FuelEU Maritime and ReFuelEU Aviation within the EU, aligning with the Net-Zero Industry Act (NZIA) and the Competitiveness Compass. The inclusion of these sectors in the Clean Industrial Deal published at the end of February is a first step towards the scaling-up of the production of clean fuels.
Ensuring Revenue Certainty
One of the most interesting recommendations in the statement is the use of public financial support from EU and national Emissions Trading System (ETS) revenues to alleviate risk from certain projects. Mechanisms such as contracts for difference can address the uncertainty arising from high production costs and long-term offtake commitments, which currently deter investment. These mechanisms would provide revenue certainty for both producers and users, making it easier to secure financing for larger scale projects. The idea of developing an integrated matchmaking platform to simplify access to EU and member state financing schemes was also mentioned. This one-stop-shop mechanism would enhance transparency, simplify applications, and improve communication between companies and authorities, building on the existing EU Hydrogen Bank.
The Role of Ports and Airports as Renewable Fuel Hubs
Ports are seen as vital hubs for the distribution and use of renewable fuels. The Clean Maritime Fuels Platform, a bottom-up industry initiative, aims to enhance communication between the shipping sector and fuel producers, identifying common challenges and solutions Building a supply chain for renewable and low-carbon fuels in Europe is a priority to ensure shipping meets its decarbonization targets. Infrastructure mandates should be introduced to develop ports and airports as hubs for renewable fuels, fostering international cooperation among ports to facilitate the distribution and use of clean fuels.
Industry Perspectives
Sotiris Raptis, Secretary General of European Shipowners | ECSA, commented that these measures are vital to maintaining European shipping’s international competitiveness while ensuring a thriving, innovative industrial cluster. “The Clean Industrial Deal must set the conditions to make clean fuels available for shipping. We need certainty through robust binding requirements and simplified access to public and private financing,” he said.
William Todts, Executive Director of T&E, pointed out that Europe has the financial resources, technical expertise, and ambitious climate goals necessary to lead the global transition to clean fuels. However, he warned that the lack of clever financial instruments to kickstart manufacturing and uptake of hydrogen-based fuels remains an obstacle. “We must act now to build the industries of the future or risk losing out to other global players once more,” Mr. Todts said.
Ourania Georgoutsakou, Managing Director of A4E, echoed these sentiments, “Airlines and shipowners are coming together to deliver a simple message: we need these fuels now to decarbonize. The EU must step up and help unlock the vast public and private investments needed to make them a reality.”
The decarbonization of shipping and aviation is not just an environmental imperative but also a strategic one for Europe. Shipping carries 76% of the EU’s external trade, ensuring the security of supply for energy, food, and goods. Similarly, aviation is a cornerstone of global connectivity and economic growth. ECSA, A4E, and T&E stress that without immediate action, Europe risks falling behind in the global race for green innovation.
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