The European Commission has unveiled its Sustainable Transport Investment Plan (STIP), a new framework designed to accelerate the development and deployment of renewable and low-carbon fuels in Europe’s maritime and aviation sectors. The initiative represents a core component of the EU’s Clean Industrial Deal and Competitiveness Compass and aims to unlock investment in the technologies needed to meet FuelEU Maritime and ReFuelEU Aviation targets.
By 2035, the EU estimates that around 20 million tonnes of sustainable fuels will be required across the shipping and aviation sectors, demanding approximately €100 billion in investment. Yet, despite the strong regulatory framework in place, including FuelEU Maritime, the Commission warns that production capacity for advanced biofuels and e-fuels remains insufficient beyond the end of this decade.
No major e-fuel projects in the EU have yet reached a final investment decision, which is indicative of persistent barriers, including high upfront capital costs, limited access to feedstocks, and a reluctance among fuel users to commit to long-term offtake agreements.
STIP seeks to address these issues through a coordinated package of financial instruments, policy measures, and support mechanisms. In the short term, the plan aims to mobilise at least €2.9 billion in public funding by 2027, distributed across a series of EU programmes.
These include €2 billion via InvestEU to stimulate production of sustainable alternative fuels, €300 million through the European Hydrogen Bank to support hydrogen-based maritime and aviation fuels, €293 million for maritime fuel projects through the Innovation Fund, and €133 million for fuels-related research and innovation under Horizon Europe.
A key element of STIP is the creation of an intermediary market mechanism to connect fuel producers and offtakers, providing revenue certainty and reducing investment risk. The Commission also plans to launch an ‘Early Movers Coalition’ for synthetic aviation fuels by 2026, expected to mobilise at least €500 million through a pilot double auction system. This model could later be expanded to cover e-fuels for the maritime sector, establishing a unified European framework for offtake contracting and price stabilisation.
Industry reactions have broadly welcomed the initiative, while warning that the level of funding remains insufficient to trigger large-scale private investment. Christophe Tytgat, Secretary-General of SEA Europe, described STIP as a ‘coherent initiative’ but noted that €2.9 billion in EU funding is ‘far from enough’ to catalyse the level of private capital required.  He urged the Commission to ensure that a greater share of revenues from the EU Emissions Trading System is reinvested in maritime decarbonisation, particularly in shipyards and equipment manufacturers.
Similarly, Danish Shipping called for common European targets for green fuel production and welcomed proposals for de-risking long-term contracts and introducing two-sided auction mechanisms. Anna Vejlby Ib, head of the organisation’s EU representation, warned that the bloc risks being overtaken by China and other ambitious players in the race to build production capacity for green fuels.
Beyond financing, STIP outlines steps to strengthen Europe’s enabling environment for low-carbon fuels. These include measures to streamline certification and reporting under FuelEU Maritime and the EU Emissions Trading System, to align national incentives for renewable fuels in ports, and to explore the use of power purchase agreements and tripartite contracts to reduce financial risk. The forthcoming EU Ports Strategy and Industrial Maritime Strategy will also reinforce the role of ports in supporting the energy transition.
The Commission argues that the plan will not only accelerate emissions reductions but also enhance Europe’s industrial resilience by anchoring new production capacity within the EU. By giving investors policy certainty and reducing administrative barriers, the bloc aims to create a competitive internal market for renewable and low-carbon fuels while maintaining fair conditions for imports.
EU Commissioner for Sustainable Transport and Tourism, Apostolos Tzitzikostas, stated, the plan represents a ‘decisive step towards a sustainable future’, one that is intended to make Europe ‘stronger, more competitive and resilient’ in the global race to decarbonise transport. Success, he added, will depend on close cooperation among Member States, industry, financiers and civil society to turn Europe’s clean fuel challenge into an industrial opportunity.
