IBIA is very concerned about the impact on bunker suppliers of the new EU proposals on naval fuel

For the association, in fact, the difficulties that the new regulations for the reduction of emissions from maritime transport proposals by the European Commission as part of the "Ready" plan for the 55" would create to the shipping companies and the Suppliers of marine fuels are of concern, while the ability of these new rules to move into the next decade the demand from fossil fuels to fuels renewable and low-carbon seems to be limited.

IBIA analysed, in particular, four measures of the Complex proposal formulated by the European Commission which, in the case of notice of the association, will have a more direct impact on the maritime sector and bunkering sector, starting with from the FuelEU Maritime initiative, whose objective - he recalled the association - is to incentivize the use of renewable and low-carbon fuels (RLF) setting ever stricter limits on intensity greenhouse gas emissions from fuels used from 2025 onwards. The second measure assessed is relative the inclusion of vessels of more than 5,000 gross tonnage tonnes in the EU ETS, the emissions trading scheme of the European Union, starting from 2023 and applicable to all maritime travel within the European Economic Area and at 50% of trips to and from non-European countries. Another measure formulated by the EU Commission which, for IBIA, may have an impact relevant on shipping is the one that proposes the revision of the Energy Taxation Directive and which provides for the abolition from 2023 of the tax exemption on bunkers sold within and for use within the European Economic Area, applying a minimum degree of taxation compared to other sectors to prevent carbon leakage. Finally, the attention of the IBIA has also turned to the measure on alternative fuels infrastructure sets out the requirements for creating an adequate infrastructure of bunkering of liquefied natural gas by 2025 and for the supply of electricity to ships from shore by ports by 2030.

IBIA, while noting that these measures have been carefully designed to prevent the relocation of Carbon emissions recognising that the international nature of the Maritime transport could easily induce ships to stock up of bunkers outside the European Economic Area by circumventing the specific EU taxation on fuel, as well as taxes and requirements on the intensity of greenhouse gases, considers, however, that such proposals could potentially alter the parity of conditions.

In particular, referring to the EU Commission's proposal to eliminate tax exemptions on fuel for ships and aircraft starting from 2023 updating the European directive on taxation the association estimated that, on the basis of factors approximate conversion, the proposed tax on Heavy Fuel Oil sold and used within the European Economic Area it would be almost 38 euros (or 45 dollars) per ton. such price difference - noted the IBIA - would make the prices of the bunkers provided in the ports of the European Economic Area less competitive, potentially eliminating the current advantages in price terms resulting from bunkering in ports of the EEA space, and would cause a shift in the demand for bunkers to the detriment of EEA ports.

On the other hand, with regard to the FuelEU Maritime initiative, which has the the aim of increasing the market share of fuels for the renewable and low-carbon shipping, the IBIA has explained that one of the main concerns related to these proposals is the complexity that these would introduce both for ship fuel suppliers and for users in trying and certify the entire "well-to-wake" cycle of the greenhouse gas emissions from alternative fuels Fossil. For shipping companies - noted the IBIA - this would extend the obligation to notify annual emissions of CO2 equivalent under the EU MRV Regulation, using verifiers accredited to ensure accuracy and completeness of monitoring and reporting by the companies. The association pointed out that in addition, on the basis of the proposal, suppliers of marine fuels at the level global wishing to provide non-fossil fuels for meet the regulation should document on the bubbles of bunker delivery greenhouse gas emission factors "well-to-tank" as well as co2 equivalents for gram of fuel, along with a separate certificate identifying the fuel production path. Certifying the real GHG emissions well-to-tank and the supply chain - has underlined the IBIA - it could be very complex since it is very likely that the new alternative fuels, just like today's petroleum-derived fuels will be mixtures of components from different manufacturers and production methods.

Referring then, in this regard, to the criticism made by the shipowners' associations to the FuelEU Maritine initiative as places the onus on shipping companies to comply, and obtain compliant fuel, while according to these associations such burden should be imposed on bunker suppliers, the IBIA has noted that if this is entirely understandable, however, the Commission's proposal makes it clear that this responsibility has been placed on the consumers of energy in order to create a demand that might not otherwise materialize. According to the IBIA, in this regard it is possible to make a parallel with the limit of sulphur content in the fuels for use the obligation to comply with was always placed in the hands of ships, while there is no obligation suppliers to supply fuels with a low fuel content sulphur, but only to meet that limit if they choose to supply these fuels. Whenever regulations have resulted in a increased market demand for low-sulphur fuel - underlined the IBIA - on the supply side it is always an answer came.

With regard to the inclusion of shipping in the EU ETS, according to the IBIA there may be two main impacts on the market of fuels for marine use: one related to how much this signal in Price terms will incentivize the use of alternative fuel to low carbon emissions and the other related to the extent to which will induce a reorganization of the networks of sea routes to reduce their exposure to the EU ETS. second the association, both impacts will depend on the price of the carbon which - for IBIA - should be relatively high to have a significant impact. According to the IBIA, therefore, the prices carbon expected between 2023 and 2030 under the EU ETS amounting to about EUR 45-50 per tonne of CO2 should have a very limited ability to stimulate the use of fuels Alternative.

The IBIA hopes for a response to these concerns and to the many other questions so far unanswered on the impact of the proposals of the European Commission before these are adopted as new rules.