Reinforcing the ETS SMAP to guarantee long-term shipping decarbonisation
The SMAP mechanism introduced under the ETS represents an opportunity to help the maritime sector to transition towards clean fuels and propulsion technologies, and strengthen Europe’s industrial leadership. With an estimated support of €15 billion between 2028 and 2040, such a mechanism could encourage shipping companies to use green e-fuels, which will need to be ...
The ETS SMAP mechanism, introduced under the EU's Emissions Trading System, offers a chance to help the maritime industry shift towards cleaner fuels and propulsion technologies, bolstering Europe's industrial standing. With an estimated €15 billion in support between 2028 and 2040, this mechanism could motivate shipping firms to adopt green e-fuels.
However, to achieve long-term decarbonisation, e-fuels must be scaled up significantly during this period. The European Commission's Sustainable Transport Investment Plan (STIP) predicts that 4.6 million tonnes of e-fuels will be required to meet FuelEU targets within a decade. While SMAP’s provision of a high price difference for e-fuels is a promising step, it may not be enough to foster a genuine transition to e-fuels.
The production of e-fuels is capital-intensive, necessitating long-term offtake agreements between producers and companies to secure investments. The current SMAP proposal might not be sufficient to facilitate this process. SMAP should primarily incentivize long-term e-fuel use rather than short-term fuel and propulsion technologies that might already be supported by existing legislation.
As discussions on the ETS file progress, the European Federation for Transport and Environment urges the inclusion of two changes to SMAP to ensure the mechanism drives investments in genuine long-term e-fuel options: 1. Dedicate a substantial portion of SMAP allowances to e-fuels. This would ensure that the mechanism aids long-term decarbonisation e-fuel options, including those produced in Europe, and does not merely subsidize short-term solutions already on the market.
2. Implement a book-in-advance mechanism for e-fuels. In the absence of guaranteed price support, shipping companies are unlikely to commit to long-term offtake agreements with e-fuel producers. A book-in-advance mechanism, already incorporated in the Sustainable Aviation Fuel (SAF) Allowance proposal, would enhance the reliability of e-fuels projects, most of which are still in the pre-FID stage.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
