What's Happening?
Europe's development of e-fuels for the shipping industry is progressing slowly, with many projects not reaching the final investment decision stage. According to a 2025 update from T&E's shipping e-fuels observatory,
80 green hydrogen and e-fuels projects are underway, but only a small fraction is dedicated to shipping. The total production is unlikely to meet the targeted levels without new policy incentives. The current projects could produce 3.6 million tonnes of oil equivalent by 2032, but less than 5% is earmarked for shipping, falling short of the EU's 2031 and 2034 e-fuel uptake targets.
Why It's Important?
The slow progress in e-fuels development for shipping has significant implications for Europe's climate goals and energy security. The maritime sector's transition to e-fuels is crucial for reducing emissions, but the lack of dedicated projects and policy support could hinder these efforts. This situation represents a missed opportunity for Europe to assert its climate leadership and strengthen its industrial and energy security. Without clear EU and national policies, Europe may have to rely on imported fuels, which could undermine its strategic objectives.
What's Next?
To meet its e-fuels targets, Europe will need to implement new policy incentives and financial support for the maritime sector. Countries like Denmark, Spain, and France have potential projects that could contribute to the shipping industry, but further investment and policy alignment are necessary. The EU may need to reassess its strategies and provide clearer guidance to ensure that the maritime sector can transition to e-fuels effectively. This could involve increased collaboration between governments, industry stakeholders, and financial institutions to drive the necessary changes.
