The total climate footprint from production to combustion should be considered in the EU ETS for maritime, according to the World Shipping Council (WSC).
The WSC joins with Danish Shipping and renewable energy producers, shipowners and other organisations in an open letter to EU's decision-makers.
The European Commission has proposed to include shipping in the EU's emissions trading system (ETS) as of 2023.
WSC said the crucial details in the regulation are currently being negotiated and therefore the World Shipping Council, Danish Shipping and several other organisations representing the full value chain behind green fuels are asking policymakers to push the regulation in the greenest possible direction.
In the open letter sent to central representatives in the tripartite meetings on the legislative proposal, the signatories emphasize the importance of looking at the climate impact of the new green fuels from extraction at the source to combustion.
"To support shipping's transition to renewably produced marine fuels, the EU ETS must provide the right signal, taking into consideration the GHG emissions of fuels across their full lifecycle," said Jim Corbett, the World Shipping Council's environmental director for Europe.
"We are concerned that the current ETS language for maritime unintentionally favours so-called brown fuels from fossil production that increase GHGs," Corbett added.
WSC noted that in other words, when you set a price for fuel emissions, it is important that a fuel is not considered green if it has left a significant climate footprint during extraction and production.
"Liner carriers are already investing in alternative fuels and technologies, and urge the EU to ensure policies are geared to accelerate investments in the necessary renewably derived fuels by adopting a full life-cycle perspective," Corbett added, noting that aligning EU ETS pricing with other EU Green Deal measures also supports Europe's potential to become a major producer of renewable marine fuels.
The open letter is sent to representatives of the European Parliament, the Council and the Commission in the tripartite meetings on the legislative proposal.
The signatories include Danish Shipping, Methanol Institute, the Renewable Hydrogen Coalition, the Royal Association of Netherlands Shipowners, the Swedish Shipowners' Association, and the World Shipping Council.