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Q&A: ZCS hopeful on IMO Net Zero Framework in 2026

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 feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.