Support of the new EU renewable and low carbon fuel ecosystem for waterborne transport

Project’s results are expected to contribute to all the following expected outcomes:

• EU Fuel producers, fuel infrastructure developers and bunkering facilities will jointly benefit from the creation of relevant business models that will accelerate the deployment of renewable and low carbon fuels for waterborne transport.
• EU Fuel producers will become more competitive in the production of renewable and low carbon fuels for waterborne transport.
• Significant increase of pipeline projects supported by various programmes and institutions in relation to renewable and low carbon fuels production and usage.
• Developing a diverse portfolio of scientifically sound mature proposals for the deployment of technological solutions to reduce Greenhouse Gas emissions, in line with the EU climate targets, especially taking into account the Fitfor55 package.
• Added value creation and increased competitiveness within the EU waterborne transport fuel ecosystem.

The European Commission is currently involved in several initiatives that aim to accelerate the deployment of solutions relevant for the market uptake of renewable and low carbon fuels. Firstly, following the initiative from the Commission, the EU has adopted FuelEU Maritime Regulation, which sets the binding reduction targets for GHG intensity of energy used on board for maritime vessels. As a flanking measure to this regulation, the Commission has promoted the Renewable and Low Carbon Fuel Alliance, which encompasses a large portion of all fuel producers, with the goal to facilitate the investment in renewable and low carbon fuels for waterborne and aviation, aiming to clarify feedstock availability, demand, and supply forecast, and to promote a commercial pipeline of projects.

The Revised ETS directive has put shipping under the umbrella of ETS with corresponding revenues to be allocated to green shipping projects. Consequently, the Commission is preparing the first dedicated calls under the Hydrogen Bank, focusing on maritime applications.

In the context of international collaboration, the Commission is currently working, together with the Joint Research Centre, on a study about the Global Gateway Green Shipping Corridors (GGGSC). This report aims to identify ports outside of the EU of strategic interest to the bloc that can be part of such corridors and to aggregate them into corridors that meet a combination of policy priorities. In this context, the Commission will also look into possible actions to support partner countries to ensure the availability of renewable and low carbon fuels within the selected ports.

In addition, the Commission has published a number of studies, including on the “Development of outlook for the necessary means to build industrial capacity for drop-in advanced biofuels”^[1] and has published a call for a second tender for a study on “How to mobilize industrial capacity building for advanced biofuels”^[2]. The EIB published the study “Financing sustainable liquid fuel projects in Europe: Identifying barriers and overcoming them” in May 2024. In addition Horizon Europe includes a call "HORIZON-CL5-2024-D3-02-13: Support to the activities of the SET Plan Key Action area Renewable fuels and bioenergy”, with deadline in February 2025. Advanced biofuels are also an option for renewable energy supply in waterborne transport. Furthermore, under topic HORIZON-CL5-2023-D2-01-07: Support for the deployment of R&I results for climate mitigation, five coordination and support actions have been selected. Synergies should be drawn in relation with the Innovation Fund program.

Projects are expected to take the previous initiatives as a starting point and go beyond their conclusions. In particular, they must address all of the following aspects:

• Provide project development support to at least 20 proposals^[3] within the renewable and low carbon fuel ecosystem for waterborne transport in order to increase the number of applications in programmes such as Horizon Europe and its successor, Innovation Fund, CEF AFIF and schemes such as EIB Loans, structural funds, as well as initiatives at national and regional level and at international level within the Global Gateway strategy. The proposal should consider coordination of their activities with already existing EU project assistance providers such as the EIB Advisory project development assistance scheme, avoiding duplication. Proposals will propose KPIs in relation with additional projects and activities to be performed thanks to its action. The support to projects should be provided following a competitive selection process, prioritizing projects admitted to the RLCF Alliance Project Pipeline and/or Global Gateway. The proposal shall elaborate on project selection methodology.
• Creation of an analytical financial tool which allows users to model a project and understand the economic rational of a business case and identify those assumptions, drivers and barriers which are critical to ensuring that the underlying projects are financially and economically viable. The projects for which the analytical tool will be developed are those which produce renewable and low carbon fuels necessary for the sustainable goals of the waterborne transport sector, as defined in the Green Deal, especially by ensuring a wide European geographical coverage in the EU. These models must take into account the results delivered through the Roundtable 4 of the RLCF Alliance in their financial analysis. The models will aim to preserve the industrial competitiveness of the EU industry, in alignment with RED, FuelEU maritime and ETS, also considering any potential unlevelled playing field risks/challenges vis-a-vis other countries outside the European Union. These models will examine the scalability potential of the fuel considering production, transport and distribution, security of supply in ports in and outside Europe, GHG emission saving on Well to Wake basis, distance continuously sailed on the fuel, size of ship in terms of installed power, total distance sailed and transparency on the project costs. Additionally, these models will also aim to leverage potential synergies between RFNBOs and advanced biofuels technologies development should be identified and utilized for the benefit of both pathways. Appropriate linkage to the RLCF Alliance is encouraged.
• In collaboration with the RLCF Alliance, develop and conduct a series of workshops/trainings with financial institutions and relevant waterborne stakeholders to facilitate the market uptake of waterborne and renewable and low carbon fuel production solutions for waterborne transport, with a particular attention to the access to capital for demonstration projects with a higher technological risk profile and dissemination of best practices to access financing and funding. The project will need to carry out relevant dissemination activities to communicate the results of the project to all relevant policy makers as well as stakeholders from the industry and civil society.

[1] Development of outlook for the necessary means to build industrial capacity for drop-in advanced biofuels - European Commission (europa.eu)

[2] Call for tenders CINEA/2024/OP/0005 STUDY ON HOW TO MOBILIZE INDUSTRIAL CAPACITY BUILDING FOR ADVANCED BIOFUELS

[3] Individual proposals will not be considered public deliverables to ensure full confidentiality