Proposed revisions to the European Union's carbon compliance regime could subsidise ship operators adopting alternative marine fuels, potentially making bio-LNG more economical than traditional bunker fuel oil, according to reporting by OilPrice.com citing analysis by consultancy Rystad Energy.
Under regulatory changes tabled by the European Commission in July, the EU Emissions Trading System (ETS) framework would allocate up to 110 million carbon allowances between 2028 and 2040 to support maritime decarbonisation.
The earmarked permits are intended to fund the Sustainable Maritime Alternative Propulsion (SMAP) initiative. This mechanism is designed to absorb a portion of the premium that alternative bunker fuels command over conventional marine petroleum products, though the distribution of support across different alternative fuel types remains uneven.