News
04/09/26
Q&A: ZCS hopeful on IMO Net Zero Framework in 2026
Sao Paulo, 4 September (Argus) — The shipping sector's energy transition appears
to have slowed since the postponement of an International Maritime Organization
(IMO) vote on its Net-Zero Framework, which may face changes before agreement is
reached. But optimism remains. Daniel Barcarolo, head of regulatory affairs at
the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping (ZCS), and
Francielle Carvalho, its regulatory affairs manager, told Argus they see a
possible agreement in the IMO's December session. They said regulatory clarity
will be the primary driver of alternative fuels adoption. With the US-Iran
conflict reinforcing the debate on energy security in Europe, will this
accelerate adoption of alternative fuels in shipping, or is it an effect that
fades once the conflict ends? This type of geopolitical shock strengthens the
energy security argument in favor of fuel diversification. We saw something
similar during the war in Ukraine and the gas crisis in Europe, which forced the
continent to seek new energy sources. However the conflict itself is not the
main driver of the transition. What tends to remain after the crisis ends is the
realisation that dependence on a limited number of fossil fuel suppliers
represents a structural vulnerability, and that diversifying energy sources is
the appropriate response. Such episodes also serve as real-world price
sensitivity tests, effectively putting into practice scenarios that illustrate
how increases in fossil fuel prices are absorbed by society and supply chains,
along with the associated impacts. It is the same mechanism at play in the
pricing of fossil carbon emissions. Political momentum, however, tends to fade
once the conflict is resolved unless it is translated into binding long-term
regulation. Energy security may accelerate the conversation, but what ultimately
sustains adoption of alternative energy sources is predictable regulation, not
temporary price spikes. With the food-versus-fuel debate in Europe and with
FuelEU and RED III excluding or limiting first-generation biofuels in
decarbonisation targets, is there room for these rules to change with the
current energy security pressures? A clarification is needed: RED III does not
completely exclude first-generation biofuels. Rather, it imposes a cap on their
use. The directive maintains a ceiling for food and feed-based biofuels while
continuing to prioritise advanced biofuels and Renewable Fuels of Non-Biological
Origin (RFNBOs). Under FuelEU Maritime, first-generation biofuels are indeed not
eligible, but there is room for biofuels certified as low indirect land-use
change (ILUC) risk. This could open the door for pathways such as 'intermediate
crops', including Brazil's second-crop corn, as well as biomass produced on
degraded land. Nevertheless, regulatory interpretation remains unclear. The
debate has gained traction through research initiatives and demonstration
projects involving fuels that could qualify as intermediate crops, and there is
an expectation of greater regulatory clarity this year. The argument has gained
political weight due to current geopolitical conditions. But changing the
food-versus-fuel calculation in Europe remains sensitive. Concerns over food
security and land use are deeply established, negotiations are lengthy, and any
changes require consensus among member states. At the IMO level, however, the
rules are likely to follow a different path, which could create room for
first-generation biofuels on a global scale. Following the postponement of the
IMO Net-Zero Framework vote, what is your view for the latest attempt to achieve
approval in 2026? What can supporters of the framework do to improve chances of
success? We still see a path for the IMO to reach an agreement with only a
limited delay. The session has been rescheduled for December 2026, and we remain
optimistic about a new agreement at that time. It is difficult to expect the
final outcome will be identical to the current proposal, as discussions are
already moving toward adjustments to the regulatory framework. We have four new
submissions from member states addressing concerns raised by other countries,
which demonstrates a willingness to seek compromise and ensure a framework is
ultimately adopted. From a political standpoint, this kind of signal is
important because it demonstrates intent. The first meeting, in September, will
be closely watched as countries gather for the initial round of discussions. If
this trajectory is confirmed, it will be a positive signal for the sector,
proving even a complex and sensitive framework can be agreed upon multilaterally
and provide a stable basis for investment. Regarding what supporters can do, the
postponement was primarily political rather than 'technical', and that is where
the effort now lies. It involves direct negotiations with the most skeptical
countries and, above all, changing perceptions of what this regulation
represents. The framework is often viewed only as a cost and a burden, whereas
in practice it can create opportunities through new markets for alternative
fuels, infrastructure development, and job and income generation. Translating
these opportunities into concrete national benefits could make a significant
difference. Supporters are working to provide greater clarity on issues beyond
ambition levels or financial contributions, including fuel certification rules
and lifecycle assessment (LCA) methodologies. Is the text as approved by the IMO
sufficiently ambitious to place shipping on a pathway to net zero by 2050, or
will stricter targets be needed? The current draft should be viewed as a floor
rather than a ceiling for ambition. The IMO's 2023 Strategy established
indicative targets for 2030 and 2040, including at least 5pc, striving for 10pc,
uptake of zero- or near-zero-emission fuels by 2030, along with review
mechanisms that allow ambition to be increased over time. Historically, this is
how the IMO operates: discussions focus on the level of ambition required to
achieve agreed goals, studies are conducted, and consensus is built. Debating
whether the targets are ambitious enough is a necessary part of the process. We
cannot have a framework that lacks ambition because ambition is what drives the
transition forward. At this stage, what we consider most important is having a
binding global mechanism in place. Once that exists, work can begin on
implementation, including emissions measurement and reporting, fuel
certification, testing of new fuels, and the procedures and administrative
requirements associated with them. These are challenges that only truly emerge
once the framework starts operating, and solving them is a prerequisite for
raising ambition in the future. The sequence matters: first establish the
structure, address implementation challenges, and then progressively increase
ambition from that foundation. Beyond the framework itself, long-term
predictability is equally important. FuelEU Maritime has demonstrated this in
practice. Having a long-term target enabled fuel producers and shipping
companies to plan ahead, knowing that by 2040-45 they will need to meet a
specific level of ambition. One of the biggest barriers is the cycle of
shipowners waiting for greater alternative fuel availability before investing,
and fuel suppliers waiting for stronger demand before expanding production. What
can break this deadlock? What breaks this cycle is regulatory certainty combined
with first-mover consortia. Long-term regulation creates the market conditions
that innovation needs in order to compete with established fuels. We have seen
evidence of this, with companies ordering ammonia-fueled vessels even before
ammonia has been commercially deployed as a marine fuel, and with early trials
of ethanol as a marine fuel. These are signs the sector is moving to assess
alternatives before a consolidated fuel supply exists. This can scale when
producers, shipowners, charterers, and ports organize around green shipping
corridors with multi-year supply agreements, supported by newbuild vessel
orders. Mechanisms such as contracts for difference can also help bridge the
cost gap for the first production facilities and accelerate deployment. By
Natália Coelho Send comments and request more information at
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