There are a large number of potential sustainable marine fuels being discussed for the future, including renewable ammonia, methane, methanol, hydrogen, and bio/synthetic diesel. These fuels can primarily be produced as biofuels or as e-fuels (electrofuels). The production method has a significant impact on the climate performance; for example, using manure to produce methane fuel can even result in negative greenhouse gas emissions.

These fuels can be used in fuel cells or combustion engines. Combustion engines are well developed for synthetic diesel, methane, and methanol, and work is ongoing to increase the maturity of ammonia and hydrogen engines. Fuel cells are mainly used with hydrogen, but methanol and ammonia can also be directly used in certain types of fuel cells. There is also growing development and adoption of pure electric solutions with batteries. Technologies to harness wind for primary propulsion or as assistance are also under development.

Adoption of Alternative Marine Fuels

Approximately 99.5% of all ships in operation worldwide are powered by conventional fossil fuels. Among ships without conventional propulsion, battery-powered vessels account for 0.3%, LNG-powered vessels 0.2%, and methanol-powered vessels 0.01% (DNV Energy Transition Outlook 2021 - Maritime forecast to 2050). At the same time, a large share of the ships currently on order are designed to be able to run on alternative fuels, and an even larger share when measured by total ship capacity, with methane and methanol representing a significant portion.

The share of future ships powered by each renewable fuel in the longer term, and the share of total consumption that each fuel will represent, will depend on many factors—many of which can only be estimated with qualified guesses. Factors include how technology and safety develop regarding production, handling, storage, and use; costs for production, storage, and handling; and the potential to produce large quantities of each fuel. Different solutions suit new versus existing ships differently, work better for short versus long distances, and production efficiency may vary between regions. Despite this uncertainty, these qualified assessments are currently what we must rely on when making decisions about which fuels to choose.

Available Solutions

Examples of fuels and solutions considered viable now and in the future include:

• Electrification

• Hydrogen in fuel cells or combustion engines (piston engines or gas turbines)

• Wind propulsion and wind assistance

• Methane

• Ammonia

• Methanol

• Renewable diesel fuels such as HVO and RME

• Carbon Capture and Storage (CCS)

Many fuels can be produced with varying degrees of sustainability and environmental performance. The alternatives described here assume each fuel is produced sustainably from renewable inputs such as renewable electricity with low climate impact, biomass substrates, etc. We also assume lifecycle emissions in terms of climate impact are low compared to today’s fossil alternatives (reductions of over 80%).

Engine Technology and Fuel Flexibility

Today, engine manufacturers like MAN and Wärtsilä offer so-called dual-fuel engines that can run on conventional diesel fuels such as MGO or renewable variants like HVO or RME, or alternatively on MGO or methane/methanol and, in the future, ammonia. In 2022, MAN announced that some of their existing engines will be retrofittable to run on new renewable fuels.

The most optimal overall solutions will often be combinations of multiple technologies. For example, battery-electric ships may be equipped with wind assistance to reduce the need for installed battery capacity, or hydrogen-powered ships might have engines that can also run on a fuel with higher energy density for backup or range extension.

Electrification

From an energy resource perspective, ships powered by electric motors with battery electricity are a very good solution because overall conversion losses are low. Cost-wise, battery solutions can already be profitable compared to conventional fossil fuels. Examples include smaller vessels operating on fixed, short routes with frequent charging opportunities. Where battery solutions are possible, they should be considered.

The technology is mature but still developing, with many examples of smaller and larger ships powered by electricity. Challenges with electric battery propulsion include weight, cost, range, and charging logistics.

To achieve pure electric propulsion at a reasonable cost, battery size may need to be limited. This often requires ferries or ships to be fast-charged during their operating hours or as frequently as possible. Given current battery technology, performance does not yet support longer routes such as intercontinental traffic.

Hydrogen

Producing hydrogen requires an electrolyzer and access to electricity and water. From an energy efficiency standpoint, pressurized hydrogen is most efficient, since liquefying hydrogen requires additional energy for cooling. Hydrogen as fuel is generally more energy efficient than storing hydrogen in other media like ammonia.

Hydrogen can be used in fuel cells and combustion engines. Currently, most engine manufacturers do not have engines running on pure hydrogen, but such models are under development for both piston engines and gas turbines. Using hydrogen in fuel cells produces almost only electricity, water vapor, and heat.

Storage is a major challenge, as hydrogen takes up a lot of space compared to fossil fuels. Liquefied hydrogen requires very low temperatures (~-253°C) and well-insulated tanks. Over time, the hydrogen warms up and evaporates, limiting storage duration.

Infrastructure is also lacking. Hydrogen is explosive and ignites more easily and over a wider range of air mixtures than methane.

There is also evidence that hydrogen leaks contribute to greenhouse gas effects through secondary impacts. The extent and potency of these emissions require further research.

Technical maturity for hydrogen and ammonia is currently lower than for biofuels like HVO, biogas, and electric solutions, and further development is needed for marine applications. The lack of regulations and standards also poses a barrier, requiring operators to prove safety on a case-by-case basis.

Wind

Historically, wind has been used for ship propulsion. Today, wind assistance solutions exist, and vessels where wind will be the dominant propulsion are in development. A notable commercial project related to Swedish shipping is the Oceanbird concept initiated by Wallenius Marine, now run by AlfaWall Oceanbird. They are designing a sailing car carrier planned to operate in 2026, which would be the world’s largest sailing ship with a capacity of 7,000 vehicles, 220 meters long, sailing at 10–12 knots. About 90% of propulsion energy is expected to come from wind. Several other consortia and shipping companies are also developing sailing concept vessels.

Ships can also be fitted with wind-assisting devices like Flettner rotors—rotating cylinders mounted on deck that generate propulsion via the Magnus effect. Flettner rotors have been tested on ships since the 1920s and can reduce fuel consumption for propulsion by about 5–15%. They can be installed on newbuilds or retrofitted.

Biogas / Renewable Methane

A key advantage of biogas is that LNG-powered ships can be fueled with liquefied biogas (LBG) without technical or operational changes, as LNG and LBG are chemically identical molecules with fossil vs. renewable origin.

Biogas production in Sweden started in the 1980s, initially at sewage plants to reduce sludge volume. With the accelerating green transition, interest in biogas from organic waste streams has grown. Sweden currently uses about 4 TWh of biogas annually, with about half produced domestically. Production potential studies estimate up to 20 TWh. EU’s RePower EU initiative aims to increase European production significantly, reducing dependence on Russian gas.

Sweden has incentives for biogas production, including subsidies introduced in 2021 and regulated in 2022. Production of biogas upgraded to natural gas quality can receive support of up to 0.30 SEK/kWh, with additional support for LBG. This program is planned to continue until 2040.

Methanol

Methanol as a ship fuel requires adapted engines and is already used commercially to some extent. Though much methanol used today is fossil-derived, the onboard technology needed for renewable methanol is the same. An international standard for methanol also exists.

Shipping companies like Maersk see renewable methanol and renewable ammonia as the two primary renewable fuels for the future.

Combustion of methanol produces fewer harmful emissions than conventional fuels but still emits unburned hydrocarbons, nitrogen oxides, and particulates, which can be problematic in populated areas.

In Sweden, companies like Liquid Wind are developing methanol production based on captured CO₂ and renewable electricity, with a first plant planned to start production in Örnsköldsvik in 2024–2025.

Ammonia

For ammonia to be widely adopted as a ship fuel, ongoing work is needed to ensure that its toxicity risks can be managed safely. A major advantage of ammonia is that it contains no carbon. When renewable fuels like ammonia and methanol are used in conventional combustion engines, issues remain with harmful emissions like nitrogen oxides, particulates, and noise. These can largely be avoided if the fuels are used in fuel cells.

For ammonia, as with hydrogen and e-methanol, the expansion and cost of renewable electricity is a critical factor. Combustion properties and possible emissions of nitrous oxide (N₂O) and ammonia leakage also require further study.

As of 2023, mainly design studies of ammonia-powered ships have been presented. Engine manufacturers like MAN and Wärtsilä plan to introduce ammonia-capable marine engines in 2024.

From a historical perspective, greenhouse gas emissions from shipping have been a less regulated area compared to other industries. Fossil fuels have been used completely untaxed, and shipping has also not been included in emissions trading systems or similar mechanisms.

In recent years, among others, the IMO has set goals to achieve reduced greenhouse gas emissions from shipping, followed by initiatives to improve energy efficiency. At the same time, the EU and other regions have introduced initiatives such as the ongoing incorporation of shipping into the EU Emissions Trading System (ETS).

From a comparative societal development perspective, it long felt as if shipping lagged decades behind other industries in terms of environmental performance. Today, the feeling is that this gap is narrowing and that shipping, like other industries, is genuinely beginning to move toward becoming long-term sustainable from an environmental and climate perspective. However, the time horizons are long, the processes take time, and the transformation is still estimated to take 20–30 years at the currently planned pace.

This environmental monitoring mainly focuses on the various initiatives underway within the EU, as these are at an exciting stage, as well as developments within the IMO.

EU - Green Deal

The European Green Deal aims to make the EU the world’s first climate-neutral region (by 2050 at the latest), and the EU Climate Law from 2020 contains a target to reduce carbon dioxide emissions by 55% by 2030 (compared to 1990).

The European Green Deal, presented by the European Commission in 2019, aimed to promote a fair and prosperous society with a modern, resource-efficient, and competitive economy with net-zero emissions while maintaining social balance by 2050. A series of upcoming legislative proposals and strategies were announced. The Green Deal was followed in July 2020 by two complementary strategies: "Powering a Climate-Neutral Economy: An EU Strategy for Energy System Integration," and "A Hydrogen Strategy for a Climate-Neutral Europe." Both strategies aim to help fulfill the goals of the Paris Agreement and Agenda 2030, and strengthen the EU’s industrial competitiveness.

In summer 2021, the European Commission presented a comprehensive package of legislative proposals under the "Fit for 55" framework.

Fit for 55

The EU has committed to achieving climate neutrality by 2050, in line with its international commitments under the Paris Agreement. The "Fit for 55" package is designed to put the EU’s ambitions into practice.

Fit for 55 has not yet been fully processed by the Council or Parliament and remains partly a proposal. Several parts of the proposal affect shipping.

Fit for 55 includes, among other things:

• Revision of the EU Emissions Trading System (ETS) to include shipping.
  In overview, all maritime transport within the EU as well as half of voyages to and from the EU will be included.

• Revision of the directive on the deployment of alternative fuel infrastructure (AFIR). It is revised to include a future requirement that shore power must be made available for ships in ports. Member States must also ensure bunkering opportunities for LNG in ports.

• Regulation on fuels for shipping (FuelEU Maritime).
  This includes a target to gradually reduce the greenhouse gas intensity of fuels used by ships by up to 80% by 2050. It also requires passenger ships, RoPax, and container ships to use shore power from 2030.

• Revision of the Renewable Energy Directive (RED3).
  The renewable energy target is proposed to be tightened to 42.5% of the total energy mix by 2030, up from the previous target of 32%.

• Revision of the Energy Efficiency Directive (EED3).

• Revision of the Energy Taxation Directive (ETD).
  The proposed revision has included suggestions to tax shipping, which would mean marine fuels and electricity used for intra-EU voyages would be taxed.

• New regulation on Carbon Border Adjustment Mechanism (CBAM).

• A social climate fund.

• Reduction of methane emissions in the energy sector.

• Revision of the third energy package for gas.

The proposals in Fit for 55 aim to:

• Gradually increase the use of sustainable and renewable energy in shipping with reduced greenhouse gas intensity. This includes CO₂, nitrous oxide, and methane, as well as requirements for shore power for passenger and container ships.

• Contribute to improved air quality.

• Support innovation and technological development.

Nationally, the Swedish Government represents Sweden in negotiations in Brussels and continuously consults the Swedish Parliament’s EU Committee. The Government Offices gather input from expert authorities among others.

The process leading to adopted directives and regulations involves:

• The European Commission submitting legislative proposals (directives or regulations).

• The European Parliament and Council jointly adopting the legal acts after negotiations.

• Parallel negotiations between the Council and Parliament.

In the proposals on incorporating shipping into the EU ETS, EUFuel Maritime, and the revision of the alternative fuel infrastructure directive (AFIR), all include clauses that consequences should be reviewed over time.

The MRV Regulation, which is related, is also being revised.

Inclusion of the Shipping Sector in the EU ETS

The EU ETS is the emissions trading system launched in 2005, and shipping is now being incorporated. Over time, the overall cap on maximum allowed emission allowances within the EU ETS will be reduced, which will also affect the price of emission allowances.

The EU Council and Parliament have agreed on how shipping emissions will be included under the EU ETS framework:

• A gradual introduction with 40% of verified emissions included for 2024, 70% for 2025, and full participation from 2026.

• Most larger ships will be covered by the EU ETS from the start. Some ship types and offshore vessels between 400–5,000 gross tonnage will be included in the MRV regulation from 2025, with their inclusion in the EU ETS to be reviewed in 2026.

• 100% of emissions from intra-European voyages and 50% from extra-European voyages to and from the EU will be included.

• The agreement takes into account geographical characteristics and proposes transitional measures for smaller islands, ice-class ships, and voyages concerning outermost regions and essential services.

• Some Member States with a relatively large number of shipping companies will receive a share (3.5%) of auctioned emission allowances to distribute among them.

• Methane and nitrous oxide emissions will be included in the MRV regulation from 2024 and in the EU ETS from 2026.

• Specific investments for the shipping sector will be made within the Innovation Fund framework.

• Measures are included to reduce the risk of carbon leakage from the shipping sector to other regions.

Regulation on Infrastructure for Alternative Fuels (AFIR)

AFIR aims to ensure the availability and usability of infrastructure for alternative fuels throughout the EU. The proposed regulation applies to all transport modes. It replaces Directive 2014/94 and complements requirements on ships in the EUFuel Maritime regulation. The regulation mainly concerns onshore infrastructure and a small part on shipping (three articles, 9–11).

Article 11 requires shore power connections for passenger and container ships in the TEN-T network. This will apply to terminals with more than a certain number of port calls per year and is estimated to affect around 20 Swedish ports.

From 2025, the requirements might apply to ports included in the core network (TEN-T – Luleå, Trelleborg, Malmö, Stockholm, Gothenburg). From 2030, it is expected to apply to ports included in TEN-T comprehensive. However, these and other details are still under negotiation.

The requirement is intended to be designed so that affected ports can provide 90% of the energy demand in the form of shore power for container ships, Ro/Pax & high-speed vessels, as well as passenger ships where the ship type calls at the port a certain number of times over a three-year period. Calls under two hours or calls by zero-emission vessels are not counted.

Regardless of ship type, calling ships should have the right to connect if the connection possibility is available.

Regulation on Fuels for Shipping (FuelEU Maritime)

The purpose of the FuelEU Maritime regulation is to increase demand and use of sustainable renewable energy in shipping to meet climate goals, improve air quality, and promote innovation and technological development.

The provisional agreement signed in March 2023 includes, among other things:

• A phase-in schedule for how much greenhouse gas intensity in fuel is allowed in the future relative to fuels in 2020 (see Figure 1).

• An annex with standard values for greenhouse gas intensity from a life cycle perspective for several fuels for those not wishing to report their own calculations. Well-To-Wake (WTW) perspective. Methane and nitrous oxide are also included.

• Provisions on when ships must connect to shore power. Principally/passenger (including RoRo) and container ships must connect to shore power at berth (>2h) in larger ports (TEN-T) from 2030.

The regulation applies to ships over 5,000 GT. Warships, fishing vessels, etc., are exempt, and special handling is planned for ice-class vessels. The regulation covers voyages between EU ports and 50% of voyages to/from ports outside the EU.

Figure 1. Requirements on the development of greenhouse gas intensity in fuel relative to 2020 according to the design of FuelEU Maritime.

The relatively low blend required until 2045 means the regulation's effect on the amount/share of alternative fuels will be moderate over the next 20–25 years, with growth expected thereafter according to IVL calculations (see Figure 2).

Figure 2. Example of estimated future fuel use in TWh from 2020 to 2050 for domestic and international shipping in Sweden based on assumed fuel mix likely to become relevant after implementing EUFuel Maritime, taking into account that this also contributes to increased energy efficiency and some reduction in transport volumes. Modeled by IVL as supporting material for a report to the Swedish Energy Agency on fuel scenarios, April 2022.

The regulation was under trilogue negotiations in December 2022.

Work within IMO

In 2018, IMO adopted a strategy to reduce greenhouse gas emissions from shipping, which was revised in 2023 and will be revised again in 2028. The strategy establishes a common vision and a goal to achieve net-zero greenhouse gas emissions around 2050.

The intensity of greenhouse gas emissions shall be reduced so that emissions per transport work decrease by 40 percent by 2030, using 2008 as the base year.
Total international shipping greenhouse gas emissions shall be reduced by 20% by 2030 and 70% by 2040, using 2008 as the base year.
International shipping's greenhouse gas emissions shall be zero, or close to zero, around 2050.

In 2023, IMO also adopted guidelines for calculating the life cycle intensity of greenhouse gases for marine fuels (LCA guidelines). Currently, IMO is working on policy measures and actions to achieve the emission targets, with the work scheduled to be completed by 2028.

The short-term measures adopted so far include the Energy Efficiency Design Index (EEDI), Ship Energy Efficiency Management Plan (SEEMP), and Energy Efficiency Operational Indicator (EEOI). EEDI is an index that specifies the minimum energy efficiency a ship must have. It applies to new ships from 2013, and the requirements are gradually tightened. SEEMP means that ships must have an energy efficiency plan, outlining how emissions can be affected through measures such as speed choice, route planning, maintenance, and more.

In 2021, IMO decided on several medium-term measures. These include the introduction of the Energy Efficiency Index for Existing Ships (EEXI), which is a similar index to EEDI but applies to existing ships (built before 2013). EEXI became effective on January 1, 2023. This is a kind of one-time rule, and ships that do not meet the requirements by 2023 will not be allowed to operate. There are various measures ships can take to comply (the most common likely being engine power limitation combined with speed reduction), but some ships will probably be scrapped.

Another tool decided upon is the Carbon Intensity Indicator (CII), which also came into effect in 2023. CII measures how efficiently a ship transports cargo or passengers and is expressed in grams of CO2 emitted per cargo capacity and nautical mile (ship emissions per nominal transport work). An annual indicator value is calculated for each ship, which then is classified from A to E depending on ship type and size. The requirements for the various A–E levels are gradually tightened until 2030 to reduce the overall emission intensity of shipping. Ships that achieve a D rating for three consecutive years or an E rating in a single year must develop and have approved a corrective action plan as part of the SEEMP. CII applies to all cargo, RoPax, and cruise ships over 5,000 GT. CII is expected to lead to efficiency improvements (e.g., reduced top speed) rather than increased use of alternative fuels.

IMO has also introduced a database (Ship Fuel Oil Consumption Database) where all ships over 5,000 GT annually report fuel consumption and distance traveled. The information in this database is not public.

Within IMO, work is ongoing to develop guidelines to calculate greenhouse gas emissions from shipping fuels from a life cycle perspective (LCA). There is currently a draft LCA guideline, but much technical work and political decisions remain.

It should be noted that the measures decided so far focus on emission intensity. With increasing shipping volumes, these will not be enough to meet the absolute targets. IMO is also discussing more long-term policy instruments, so-called market-based measures (MBMs). This discussion started in 2010, went dormant for a while, but has now resumed. Several proposals have been submitted to IMO, aiming to have something in place by 2030. Global policy instruments under discussion include carbon taxes, emission trading systems, etc. These are being evaluated. The EU and its Emissions Trading System (EU ETS) are also monitored in this context.

The idea is to make climate-neutral fuels economically more attractive than fossil fuels. The long-term proposed instruments include:

• Charges on marine fuels (e.g., collected in an international fund to reduce greenhouse gas emissions)

• Emission trading (various versions, either as part of existing ETS or a dedicated shipping system)

• Hybrid variants combined with and using the Energy Efficiency Design Index as a benchmark, among other proposals.

Ahead of IMO’s meeting MEPC 79 in December 2022, the working group on reducing ship greenhouse gases (ISWG-GHG) had advanced the development of proposals regarding global policy measures such as greenhouse gas fees or fee-bate mechanisms, greenhouse gas fuel standards, emission trading, and a financing/reward system linked to how ships comply with CII requirements (energy efficiency). These proposals were discussed at MEPC 79, and there is growing support within the committee to advance these policy instruments, primarily a greenhouse gas fee and a fuel standard (GHG Fuel Standard). MEPC 79 also prepared a draft revised IMO GHG Initial Strategy containing a summary of various proposals. The goal is to adopt such a strategy at the next meeting (MEPC 80 in June 2023).

Significant differences remain to be resolved, including emission factors from a life cycle perspective (tank-to-wake and well-to-wake) and how funds collected from possible fee systems should be used.

National policy instruments

Domestic shipping is included in climate goals according to the Climate Policy Framework. The goals include, among other things, an interim target by 2030 for emissions from domestic transport (excluding domestic aviation) to be reduced by 70 percent compared to 2010 levels. By 2045, the goal is that Sweden shall have no net greenhouse gas emissions. Emissions from activities within Swedish territory shall be at least 85 percent lower than in 1990 by 2045, and the remaining reductions can be achieved with compensatory measures. Emissions from international shipping (defined as emissions from bunker fuel for international shipping) are not covered by these goals.

In October 2020, the Environmental Objectives Council was tasked to propose a comprehensive strategy and prepare targets for climate impact from Swedish consumption, regardless of where emissions occur. The council shall, based on a broad analysis of the climate impact of aviation and shipping and opportunities for emission reductions, also propose interim targets for aviation’s climate impact and prepare the possibility for interim targets for shipping’s climate impact.

Currently, there are national policy instruments relevant to shipping such as:

• Eco-bonus, which is an environmental compensation for shifting goods to shipping, aimed at shipowners to stimulate new shipping transport arrangements. In 2022, the government announced plans to broaden the eco-bonus. The effort will amount to 100 million SEK per year between 2022 and 2024. The broadened eco-bonus targets shipping, rail transports, combined transport modes, and measures that improve transshipment efficiency and stimulate new transport solutions.

• Environmentally differentiated fairway dues have existed in Sweden for many years, and since 2018, fairway dues have been differentiated based on several environmental factors, including climate adaptation.

The national coordinator for domestic and short-sea shipping at the Swedish Transport Administration is investigating the possibility of establishing equivalent environmental and climate incentive measures also in port fees. Furthermore, the coordinator’s mandate includes exploring how green shipping corridors can contribute to emission reductions in shipping and working to establish these in line with the Clydebank Declaration, launched at the UN climate meeting in Glasgow in 2021.

In September 2022, the Swedish Transport Analysis Agency reported on a commission related to providing input for the upcoming climate policy action plan in the transport sector. The aim was to provide proposals and data to ensure national and global climate goals can be achieved sustainably and cost-effectively in the transport sector. For shipping, eight potential policy measures were identified: Development of the Swedish Maritime Administration’s fees, climate-differentiated shipping support, national fuel requirements for smaller vessels, developed requirements for government fleets, developed requirements in contracted Gotland traffic, expanded mandate for the national shipping transition coordinator, transition programs following the Norwegian model, and consultancy support for greener shipping following the Norwegian model. (www.trafa.se/etiketter/transportovergripande/Klimatuppdrag-12168)

Over time, compilations of completed projects in various subject areas have been conducted, including those related to shipping and the shipping transition. As part of the Lighthouse project "Research and Development Towards Fossil-Free Ship Operation," such a review was conducted in 2021. In connection with the work on the knowledge base within the Lighthouse Focus Group Fossil-Free Shipping, this information has now been updated.

Based on recommendations from previous studies

The conclusion from the project Research and Development Towards Fossil-Free Ship Operation was that there is a need for further national efforts to improve coordination in the area of “shipping’s transition towards sustainability.” Among other things, a systematic and regular compilation of projects and initiatives in the field could contribute to a better overview. Part of the knowledge base being developed within the Focus Group’s work on fossil-free shipping therefore includes exactly this.

The intention is for the compilation to be kept updated and easily accessible also going forward.

Examples of the benefits of a compilation of completed and ongoing projects related to the shipping transition:

• To make consolidated information about completed projects available, which can contribute to increased dissemination of results.

• To contribute to more efficient coordination and use of R&D resources.

• To assist in international initiatives, such as applications and implementation of EU projects.

• To simplify and initiate collaborations between different ongoing initiatives.

• For those who have knowledge needs and need to know who has previously worked on the issue and who has ongoing efforts.

• To more easily extract results from already completed projects.

• To facilitate the often time-consuming initial work when projects are formulated, by seeing what has already been done in a given area.

• For research funders to assess whether the question has already been investigated.

• To more easily identify areas where knowledge gaps exist.

For the compilation of information to be useful for international actors, the content also needs to be international to provide full value. However, this need contrasts with the idea of creating a simple and easily managed system, so a balance must be made. This compilation therefore focuses on projects with a clear connection to Swedish actors.

Regarding content and scope, we have received feedback that it is important to cover the various areas needed to achieve the desired transition. Many organizations active in the sector are technology-driven but still welcome the inclusion of, for example, commercial and financial research projects.

The compilation has deliberately been kept simple, partly to ensure the process is sustainable over time and does not consume excessive administrative resources. The assessment has been that it is better to get started with compiling and that it should be quick and easy to collect information.

It has become clear that it is not easy to get a comprehensive compilation of projects that covers all needs and desires. The compilation and selection could have been somewhat different with a slightly changed focus, and it is difficult to set principles that are entirely objective.

If international projects and initiatives could also be included in the compilation, we recommend further work be done to investigate what has already been compiled within existing international collaborations and cooperation platforms. The possibility of conducting compilations in collaboration with one or some of these organizations should be explored to improve the quality of the information.

Areas identified as needing more focus

Regarding areas where there are specific challenges is, among other things, achieving an effective transition of the existing fleet. This is particularly important since ships generally have a long lifespan. Another area that can be seen as a key factor for success is to seriously address how large volumes of renewable fuels for shipping will be produced. Lead times to build such production capacity are long and will require significant investments.

Missing projects from the list?

Projects relevant to the shipping transition are warmly welcome to be added. The starting point is that projects and initiatives should contribute to the shipping transition towards sustainable operations to help achieve goals of significantly reduced and ultimately zero negative impact on climate and natural environment from shipping, focusing on phasing out greenhouse gases and improving energy efficiency.

If you want to add projects or initiatives, please send an email with project details to Lighthouse (This email address is being protected from spambots. You need JavaScript enabled to view it.) with the subject line: “Addition of projects – shipping transition.”

The possibility of fully or partially automating information collection to streamline project identification has been discussed. Ideas include developing an AI tool for information search, with manual review of the material afterward. Another idea is to explore whether some of the available project databases with project-related information could be made available in a form that APIs could scan and directly retrieve information. If not, shipping research could be a suitable area to introduce and test such a methodology.

Download compilation of ongoing and completed projects

Today, there are relatively large opportunities to apply for support for transition projects for those who want to invest in new solutions that contribute to a better environment and reduced greenhouse gas emissions. Here are some of the opportunities available, including the Climate Leap (Klimatklivet) and the EU Innovation Fund, based in part on presentations by Jakob Länje from the County Administrative Board of Västra Götaland and Andreas Englund from IVL at a meeting organized by Lighthouse Focus Group Fossil-Free Shipping.

Climate Leap – for a Climate-Smart Society

Climate Leap is an investment grant that supports various climate investments in municipalities, regions, companies, and organizations. Between 2021 and 2026, there is a budget of 6.5 billion SEK allocated to climate projects. The main purpose of Climate Leap is to ensure the investment leads to maximum climate benefit at regional and local levels. Primarily, this means reducing greenhouse gas emissions but also contributing to the dissemination of technology and market introduction, as well as impacting other environmental quality objectives, health, and employment.

Climate Leap is regulated by a directive stating that support should primarily be given to the measure or measures judged to provide the greatest lasting reduction in greenhouse gas emissions per invested krona. This is a key factor within Climate Leap. If several applications have equivalent greenhouse gas reductions, consideration should be given to their potential to reduce emissions in agriculture, technology dissemination and market introduction, as well as effects on other environmental goals, health, and employment.

Who Can Receive Support and For What in Climate Leap?

Support can be granted to all except private individuals, such as companies, municipalities, regions, housing cooperatives, and other organizations. Climate Leap only supports physical investments. Examples of supported measures include the purchase of biogas trucks, biogas production, bike lanes, charging stations, shore power connections on tankers, and replacing oil boilers with biofuel boilers.

Primarily, it is a national support intended for emission reductions within Sweden. However, there are also applications supported where the majority of emissions occur outside Sweden’s borders.

Examples of Shipping-Related Activities Supported by Climate Leap:

• Erik Thun shipping company was granted support in 2022 for installing shore power connection on a tanker during new construction, covering the additional cost of approx. 900,000 SEK for this environmental measure.

• Furetank received about 1 million SEK in 2022 for shore power connection onboard a tanker.

• Sjöbyggnationer Stenungssund was granted support in 2022 for converting their tugboat from diesel to electric propulsion.

• Gävle Port received about 5 million SEK in 2021 for shore power connection of tankers, about 4 million SEK for crane electrification at the bulk terminal, and about 450,000 SEK in 2022 for shore power connection of bulk carriers.

• Västtrafik was granted support in 2021 for charging infrastructure for ferry traffic to Koster, installing charging facilities in Strömstad with approx. 3 million SEK.

• Gothenburg Port was granted about 10 million SEK in 2021 for shore power connection of tankers and expanding their shore power offerings.

• Northern Offshore Services received about 800,000 SEK in 2021 for battery installation on the vessel Northern Skagerrak.

• Koster Marin AB was granted 9 million SEK in 2021 for converting a vessel to electric propulsion.

• TT-Line received about 6 million SEK in 2021 for energy efficiency through data-driven machine learning onboard several vessels to reduce fuel consumption.

• Green City Ferries received about 29 million SEK in 2021 for a hydrogen-powered fast ferry in commuter traffic and about 28 million SEK for an electric high-speed ferry in Stockholm commuter traffic.

• Kapellskär Port received about 3 million SEK in 2020 for shore power connection of vessels.

• Donsö Shipping received support in 2020 for two measures: hybrid electric retrofitting of two vessels with battery systems allowing shore charging, and waste heat recovery using ORC technology on two vessels to reduce emissions.

• Stockholm Port received about 27 million SEK in 2020 for shore power connection of cruise ships.

• DFDS Seaways was granted support in 2018 for electric connection to a ferry terminal where four ferries are being converted to enable shore power in port, in cooperation with Gothenburg Port.

What Is Required to Get an Application Approved?

To receive support from Climate Leap, the measure must have sufficiently high climate benefit, measured by dividing the total emission reduction by the total investment cost. This is the single most important factor for receiving support. Another condition is that the measure is not too profitable, meaning it should not pay back within 5 years without support, as then it is assumed that the investment could be done without support. The measure must not have started before the support decision; costs incurred before the decision date are not eligible.

Measures Not Eligible for Support

Measures required by law, other regulations, or permit conditions are not eligible. Nor can investments that qualify for other support or bonuses, such as climate bonus cars, be supported. Double funding is not allowed. Support cannot be granted for measures primarily aimed at marketing or information. Renewable electricity production such as solar or wind power is not supported, except for electricity from biogas produced through digestion and converted to electricity in stationary plants.

Amount of Support and Advice for Applications

Support for companies is provided according to EU state aid rules. On average, support covers 41% of investment costs but can be up to 70% for companies. Other applicants can get up to 50%. Support is granted only as much as needed for the project to proceed.

Tips for applying include describing the measure clearly, current situation, emissions sources, planned changes, expected future scenario, permitting status, timeline, and budget realistically. Focus on emission calculations and profitability analysis is critical. The Swedish Environmental Protection Agency offers templates and guidance. Advisors and county administrative boards can also assist.

Application Process

Step 1: Submit the application to the County Administrative Board digitally in the relevant region during specified periods.
Step 2: The County Board reviews and may request additional information. They check compliance with criteria and regional climate goals.
After 3–4 months, the Swedish Environmental Protection Agency makes a decision. They may also ask for clarifications.

Only applications during specific rounds are accepted. County Boards cooperate with the Swedish EPA for administration, knowledge sharing, and follow-up.

If a Measure Doesn’t Fit Climate Leap

Other supports include the Climate Premium (Klimatpremien) for environmental vehicles, targeted at companies, municipalities, and regions buying environmentally friendly trucks or machinery.

For industry, Industriklivet supports earlier work, feasibility studies, pilot and demonstration projects related to process industry emissions and strategic industrial measures.

Innovation Fund – Funded by EU ETS

The Innovation Fund is one of the largest funds globally for innovative demonstration projects reducing greenhouse gases, currently not directly targeting shipping. However, areas relevant to shipping, such as renewable energy production, energy storage, and carbon capture, fall under the fund.

Funds come from a portion of EU ETS emissions trading revenues. With shipping entering EU ETS, shipping is likely to become more integrated with the fund in the future.

Innovation Fund Details

Handled by CINEA (The European Climate, Infrastructure and Environment Executive Agency), the fund has two calls per year for small and large projects. Since it’s financed by fees companies pay into EU ETS, it’s not state aid and can be combined with other public support.

EIB (European Investment Bank) also offers loans and advisory services for project development.

Eligible projects should be at TRL 6–9 (Technology Readiness Levels), meaning technology demonstrated in relevant environments up to proven, operational systems. Projects must be implemented within the EU, Norway, or Iceland.

Other funding schemes include LIFE (pilot/demo projects), EIC Accelerator (for SMEs and startups), and Eurostars (international SME projects).

Sectors Covered by Innovation Fund

• Innovative production and use of renewable energy

• Carbon capture, utilization, and storage (CCUS)

• Energy storage

• Innovative low-carbon technologies in energy-intensive industries

Shipping can fit especially in renewable energy use, CCUS, and energy storage.

Examples, Financing, and Application Tips

Large projects can get up to 60% of investment and operating costs for up to 10 years; small projects only cover investment costs for up to 3 years. Applicants must commit to CO2 reductions, with penalties for failure to deliver.

Up to 40% of agreed funds can be paid in advance at financial close. Full financing need not be in place at application, but the more ready, the better the scoring.

Applications undergo cascading assessment: innovation level, CO2 reduction, project maturity, scalability, and cost-effectiveness.

Applications are complex (~300–350 pages) and take about six months to assess plus a similar time for contracting.

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