Decarbonizing the European Maritime Industry Using RFNBOs. A Techno-Economic-Emission Analysis on the Effects of FuelEu Maritime Legislation in the EEA Fuel Mix with Special Focus on RFNBOs

Abstract

The oceanic maritime sector, crucial for global trade, predominantly relies on polluting Heavy Fuel Oils (HFO), contributing to approximately 3% of annual GHG emissions. Decarbonizing this sector poses a significant challenge due to its international nature and the substantial technological investments required. The recently adopted FuelEU Maritime (FEUM) legislation, as part of the European Green Deal (EGD), is a pioneering piece of legislation mandating incremental greenhouse gas (GHG) intensity reductions for maritime fuels. Additionally, the law features several instruments to incentivize the uptake of Renewable Fuels of Non-Biological Origin (RFNBO), such as e-ammonia (NH3) and e-methanol (CH3OH). FEUM targets the fuel tanks within commercial vessels exceeding 5,000 GT (gross tonnage) voyaging from and to ports within the European Economic Area (EEA). Previous research has focused either the effects of FEUM on the container ships category or on global maritime sector decarbonization pathways. This study offers a comprehensive analysis of FEUM’s techno- economic and emissions implications on the entire EEA-operating fleet. Through a combination of scenario analysis and cost-minimization modelling from the perspective of shipping companies, fleet size, optimal fuel mix and GHG abatement costs were assessed. Key findings indicate a shift away from liquid towards gaseous fossil fuels and a notable increase in demand for RFNBOs in the late 2030s, particularly NH3 over CH3OH. Despite an 80% reduction GHG intensity in 2050, absolute emissions decline marginally due to sector expansion. Total fuel associated costs premiums range between 61-74% by 2050. Geographical RFNBO production location, minimally impact RFNBO demand and costs in the long run. Assessing FEUM’s implications serves to gauge the legislation’s (cost-)effectiveness in achieving its targets and guides policy recommendations.