{
  "id": 16530100,
  "title": "EU Proposed SMAP subsidy favors e-fuels and bioLNG",
  "url": "https://urgent.news/2026/10/25/eu-proposed-smap-subsidy-favors-e-fuels-and-biolng",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-25T22:00:50.000Z",
  "source": {
    "name": "Hellenic Shipping News",
    "slug": "hellenic-shipping-news",
    "url": "https://www.hellenicshippingnews.com/eu-proposed-smap-subsidy-favors-e-fuels-and-biolng/"
  },
  "original_language": "en",
  "account": "The European Union is contemplating a new subsidy program aimed at encouraging shipowners to switch to alternative marine fuels. Proposed in July, the European Commission's revision of the EU Emissions Trading System (EU ETS) would allocate up to 110 million allowances between 2028 and 2040 for a Sustainable Maritime Alternative Propulsion (SMAP) mechanism. This initiative is designed to help bridge the price gap between conventional marine fuels and sustainable alternatives, such as bioLNG and renewable e-fuels.\n\nRystad Energy's analysis suggests that the proposed subsidy, combined with existing EU ETS and FuelEU Maritime regulations, could significantly alter the cost dynamics of marine fuels within Europe. BioLNG and renewable e-fuels are poised to benefit the most from this scheme, while biodiesel derived from used cooking oil (UCO) and animal fats, which are currently widely used, would not receive any support. The timing of this proposal is crucial, as shipping companies are required to surrender ETS allowances for 100% of their verified emissions from 2026, including methane and nitrous oxide, under the new FuelEU Maritime regulation.\n\nThe impact of these rules on shipowners, charterers, and fuel suppliers remains to be seen. SMAP would cover 55% of the remaining price gap for biogas and advanced biofuels, and 90% for RFNBOs like e-ammonia and e-methanol, with additional benefits for feedstocks sourced within the EU. Support is scaled based on the size of the cost gap, with the most expensive fuels receiving the highest payouts. EU-produced e-ammonia could potentially have its entire premium covered under this scheme.\n\nHowever, there are exceptions. Liquid biofuels produced from waste oils and fats, which form the backbone of Europe's biodiesel industry, are excluded from SMAP support. This exclusion is significant given that by 2030, crops and waste lipids are expected to make up about 96% of the region's biodiesel and renewable diesel production capacity. The proposal still requires approval from the European Parliament and European Council, but the overall trend is clear: alternative fuels that perform well under the ETS, FuelEU Maritime, and SMAP are likely to gain favor among shipowners, particularly those with LNG dual-fuel capabilities and early adopters of e-fuels. Those relying on waste-oil biodiesel may face a widening cost gap in the future.",
  "summary": "Europe’s carbon market could soon start paying shipowners to switch fuels, but the support on offer is far from equal. In July, the European Commission proposed a revision of the European Union’s Emissions Trading System (EU ETS) that would reserve up to 110 million allowances between 2028 and 2040 for a new Sustainable Maritime Alternative ...",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}