Europe risks losing its competitive edge to China in green marine fuel production unless more e-fuel projects advance beyond the planning stage, according to the environmental campaign group Transport & Environment (T&E).

In a press release issued on Thursday, T&E highlighted that Europe currently has 69 e-fuel projects with the potential to supply the maritime sector. However, only six of these are operational, despite the introduction of the FuelEU Maritime regulation designed to accelerate the adoption of sustainable maritime fuels. The regulation, which entered into force in January 2025, mandates a progressive reduction in the greenhouse gas intensity of energy used by ships calling at EU ports and is a cornerstone of the bloc's effort to decarbonize a sector that the International Maritime Organization estimates accounts for around 3% of global greenhouse gas emissions.

E-fuels — synthetic fuels produced using renewable electricity, typically through green hydrogen combined with captured CO₂ or nitrogen — are widely regarded as among the most promising pathways for deep decarbonization of shipping, as they can be dropped into existing engines and bunkering infrastructure with relatively modest modifications.

T&E estimates that if all planned projects come to fruition, they could produce up to 4.09 million metric tons of oil equivalent (Mtoe) of e-fuels by 2033. That output would be sufficient to meet approximately 14% of European shipping's total fuel demand.

Spain leads the European project pipeline, followed by Denmark, Finland, and France.

On the Chinese side, T&E noted that while China has only three operational e-fuel projects, those facilities produce roughly 10 times more than Europe's operational plants combined. This disparity, the group cautioned, enables China to scale up production capacity at a significantly faster pace.

T&E warned that Europe could become increasingly dependent on imported e-fuels unless governments step in with stronger financial backing and policy measures to stimulate domestic output.

"While Europe hesitates, China is actually getting e-fuels off the ground," said Constance Dijkstra, maritime policy manager at T&E.

"If Europe wants to be a leading e-fuels producer, it needs to bridge the price gap between EU-made e-fuels and fossil fuels, and get shipping companies to start using those fuels instead of defaulting to imported LNG or biofuels," Dijkstra added.

Source: Ship & Bunker