Abstract
The Sustainable Energy Transition in Shipping through Agreements, Industrial Leadership and Subsidies (SET-SAILS) project explores how competition and industrial policy can contribute to the market uptake of a future-proof alternative maritime fuel (AMF). To meet global and EU climate targets, the EU shipping industry is called upon to phase out conventional fossil fuels in favour of AMF, which encompass technologies with a different degree of market-readiness (liq.natural gas, biofuels, methanol, ammonia, etc.). So far, AMF account for a small fraction of total fuel demand and the high level of uncertainty on which AMF will become the next market standard undermines investments. Absent a comprehensive strategy for the AMF market uptake, the EU only prescribes a gradual reduction in carbon intensity of ships, while leaving the task of identifying the 'winning' AMF up to market forces. Hence, shipping companies and ports have an incentive in choosing less costly, short-term options, which diverts resources from AMFs that are more economically efficient and sustainable in the long term. By combining legal and economic research methodologies in the field of competition policy and transport policy, SET- SAILS provides the first extensive theoretical and qualitative analysis of AMF market dynamics and regulators' practice within the EU. International workshops and a stakeholder survey will provide further evidence that will be translated into recommendations to policy-makers. A detailed map of the market ecosystem and regulatory framework will be drawn for each AMF type, while possible sustainability agreements between port and shipping operators will be assessed, as well as public-private funding to de-risk investments in AMF.
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