Europe could lose ground to China in the production of e-fuels for the maritime sector unless it bridges the price gap between domestically produced e-fuels and fossil fuels, according to Transport & Environment (T&E).

An updated e-fuels tracker published by T&E shows that Europe is home to 69 e-fuel projects that could serve the maritime sector, yet only six are currently operational. The organisation says effective financial support, combined with clean fuel targets at EU level, would help more and larger projects to reach operational status.

The introduction of FuelEU Maritime — the EU's e-fuel target for shipping, adopted in 2023 — has been followed by the development of projects across Europe. Spain has the highest number of projects, followed by Denmark, Finland and France. According to T&E, if all 69 projects were to become operational, they could produce up to 4.09 million tonnes of oil equivalent (Mtoe) of e-fuels by 2033, equivalent to 14% of European shipping's fuel needs.

One development cited by T&E is the Andalusian Green Hydrogen Valley project, which reached a final investment decision (FID) in February, with a projected production of 474,000 tonnes of oil equivalent per year of e-ammonia and e-methanol.

However, T&E's analysis found that three operational projects in China are already producing around ten times the volume of what the operational plants in Europe are generating. The organisation warns that this ability to scale more quickly could see Europe cede ground, and that Chinese production without competition from Europe risks flooding the European market.

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

T&E says Europe must invest in local e-fuels production to ensure it remains competitive in what it describes as a strategic new market.