The European Commission has approved the Netherlands’ state aid scheme to acquire a fleet of ships running on renewable hydrogen or methanol in shortsea trades amid tightening regulatory requirements, the EU executive said July 27.

The scheme will provide direct grants for purchasing new zero-emission ships and retrofitting existing vessels to run on the two low-carbon fuels renewable methanol or renewable hydrogen, with funding available from 2027 through 2031, according to an EC statement.

The Netherlands will target passenger, cargo and work vessels primarily operating in the shortsea shipping segment, with the EU Emissions Trading System and FuelEU Maritime rules imposing stricter decarbonization requirements on shipping companies, the EC added.