Keeping EU Shipping Competitive in the Energy Transition
Shipping is not merely a mode of transport. It is the strategic backbone of Europe's economy, powering industrial development, ensuring supply chain continuity, and enabling energy security. As the driving force behind Europe's broader maritime cluster, shipping sustains high-quality employment and drives innovation across shipyards, equipment manufacturers, technology providers, and service industries. Recognised in the Draghi Report as one of the ten critical sectors essential to restoring European competitiveness, maritime transport demands a policy framework that both defends the EU's strategic autonomy and keeps its trade routes open and resilient.
At the European Shipping Summit in March 2025, during the UGS's special event, Charles Michel—President Emeritus of the European Council (2019–2024) and former Belgian Prime Minister—captured the sector's importance: 'Shipping is a key driver of Europe's competitiveness and economic strength, ensuring the seamless movement of goods that sustain industries and trade.'
'Decarbonisation must go hand in hand with competitiveness'
In the face of mounting competition from Asia, the UGS emphasises the need to maintain the EU's existing maritime support framework which levels the playing field with third countries.
During her keynote address at the opening of the 'European Shipping Summit 2025,' Melina Travlos, UGS President, said: 'It is necessary to establish and implement policies that ensure the safeguarding of European shipping's leading global position, acknowledging that competitiveness and sustainability are not opposing forces but parallel paths to be pursued together.'
This imperative extends to EU climate regulation, which must be fully aligned with global measures under the International Maritime Organisation (IMO). Upon IMO's adoption of a global fuel standard and carbon pricing mechanism (IMO Net-Zero Framework) the EU must harmonise its instruments, particularly the FuelEU Maritime Regulation and EU ETS, to avoid regulatory duplication, double payment, and distortions in the global market.
Speaking at the Shaping the Future of Shipping Summit in Athens in June 2025—co-hosted by the Hellenic Ministry of Maritime Affairs and Insular Policy, the International Chamber of Shipping, and the UGS—Melina Travlos issued a clear message: 'Policymakers cannot regulate shipping without shipping,' she said, urging that regulation should foster innovation, support decarbonisation, and ensure fair competition, not stifle progress. Ms. Travlos called
for maritime policy at every level—national, regional, and global—to be shaped with full respect for the industry's deep operational knowledge.
'Decarbonisation will not move beyond ambition without safe, scalable, and globally accessible alternative fuels'
At the core of shipping's green transition lies one indispensable ingredient: alternative marine fuels. Yet the industry warns that progress will stall unless fuel suppliers are held accountable for providing safe, affordable, and compliant fuels at sufficient quantities. Instead of relying almost exclusively on shipowners, a self-defeating approach that only serves revenue-generating purposes, binding targets must also be set on fuel producers, together with meaningful incentives, to ensure adequate supply of alternative fuels at competitive prices.
Funding remains a critical piece of the puzzle. Revenues from national, EU or international climate-related measures should be reinvested directly into maritime decarbonisation. Funding instruments must reflect real-world industry requirements and cater for the needs of all shipping sectors, including bulk/tramp shipping, which accounts for almost 85% of the global transport work. Priority should be given to bridge the significant price gap between traditional and alternative fuels.
While the EU Innovation Fund has taken initial steps, its complexity and misaligned eligibility criteria with EU shipping realities, make it unsuitable for SMEs and the bulk/tramp sector. A redesign of the EU funding mechanisms is needed to serve this sector and its SMEs, too.
'Without access to competitive ship finance, there can be no fleet expansion and renewal, no innovation, and no decarbonisation'
Access to finance is becoming increasingly out of reach for many shipowners, particularly SMEs that are practically excluded from capital markets. Reversing the decline in traditional bank lending is critical for the competitiveness of EU shipping. The UGS advocates for a revitalised ship finance ecosystem, with enhanced traditional ship financing tools, primarily bank lending, including potentially new financial instruments tailored to the specific needs of EU shipping SMEs.
Equally, the EU Taxonomy must be adapted to support realistic decarbonisation pathways. Cargo-based restrictions—such as penalising ships capable of transporting fossil fuels, even when those vessels meet strict emissions criteria—are counterproductive and should be abolished to unlock critical green investments.
The forthcoming EU Port Strategy and Sustainable Transport Investment Plan are seen as key opportunities to correct past oversights. Prioritising fuel availability, infrastructure, and enhanced access to ship financing will be vital. Integrating initiatives like Clean Energy Marine Hubs — a global public-private platform coordinating clean fuel production and distribution — will also be crucial, especially for the bulk/tramp sector, which, being itinerant in nature, needs access to alternative fuels worldwide.
''Training the workforce of the future''
No industrial strategy is complete without people. With hundreds of thousands of EU seafarers requiring upskilling in alternative fuels, digital tools, and modern safety systems, investing in training and employment is no longer optional—it is vital to the sector's long-term competitiveness, operational safety and a prerequisite for maintaining maritime know -how in the EU.
'Avoiding the pitfalls of protectionism'
While strengthening European shipbuilding is a legitimate policy goal, stakeholders caution against protectionist measures disguised as industrial policy. Only voluntary, market-based incentives should be sought to attract investment and enhance Europe's competitive edge in this area.
As the EU charts a course toward a green and competitive industrial future, the principles outlined in the Draghi Report offer a clear compass: embrace openness, uphold realism, and align ambition with global market realities. For Europe's maritime sector, these are not abstract ideals—they are the foundation of its survival and success.
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