The International Maritime Organization's (IMO) failure to adopt a net-zero framework (NZF) for international shipping could slow the adoption of sustainable marine fuels, although longer-term goals remain achievable, according to market participants in the major bunkering hub of Singapore.
The vote at the IMO late last week to delay the NZF, which includes a global greenhouse gas (GHG) emissions pricing mechanism for international shipping, could hit the adoption of alternative fuels such as biofuels, LNG and methanol.
"A delay in the NZF framework will not be great for investor confidence and would potentially impact investor confidence in scaling up. However, it also depends on what the governments want in terms of the GHG strategy for their economies," said a Singapore-based shipbroker.
"Many clients are now in a wait and see mode…[and this is] slowing efforts," said an advisor to shipbuilders and shipowners.
It "might take a few years" for the pricing framework to be adopted, particularly given the US is against the proposal, a Singapore-based supplier said
"It's a missed opportunity," said a trader with an international trading firm. "We are progressing nicely in our bio and carbon plans, so it's a shame to see it pushed back, but will only make us stronger in the year ahead," he added.
Demand for biodiesel may weaken because of the delay in IMO adoption, several traders said. But buying interest for conventional bunkers such as very-low sulphur fuel oil (VLSFO) and high-sulphur fuel oil (HSFO) is expected to hold steady, even if there is limited demand for bio-bunkers, a few traders said.
"For us as bunker traders it doesn't really make much difference, we buy what the shipowners need, so we just carry on the same," a UK-based trader said.
Meanwhile, IMO's previous guidelines and existing compliance requirements like the Carbon Intensity Index (CII) and the EU-led FuelEU Maritime and EU Emissions Trading Scheme (ETS) remain in force.
The concerns expressed were also countered by a quiet determination that the region can still meet its maritime decarbonisation goals.
"Opposing member states will undoubtedly use the coming year to grow the no-camp," said a representative from a key classification society, clouding hopes of a clear mandate when the motion will be tabled again by the IMO in 2026.
"The NZF is not off the cards, nor is the 2050 net zero shipping emissions target. In the best case, the NZF will be delayed by a year," he further added. Discussions on implementing NZF guidelines at the Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG-GHG) have not been called off, the official noted.
The 20th ISWG-GHG session, being held in in London on 20-24 October, may be beneficial for addressing concerns or reaching consensus before a new vote in 2026, he added.
The current session is reviewing the proposed Life Cycle Assessment framework, which is included in the NZF. ISWG-GHG is a technical group that reports to the IMO's Marine Environment Protection Committee and these sessions aim to reduce GHG from shipping.
