The Global Maritime Forum (GMF) has published a document outlining crucial IMO policy measures and discussion points for the upcoming MEPC 83 meeting (April 7–11, 2025), reports Global Maritime Forum.
Current Situation
In recent months, IMO (International Maritime Organization) Member States have been collaborating to find common ground on maritime decarbonization measures. However, several critical issues remain unresolved:
- Global Fuel Standard (GFS):
- Establishing regulations for the greenhouse gas (GHG) content of maritime fuels.
- Economic Instrument:
- Designing an economic mechanism, such as a universal levy on emissions.
- Just and Equitable Transition:
- Creating mechanisms, including revenue-sharing models, to ensure a fair energy transition.
Within these broad areas, numerous specific details need to be addressed:
- Penalties for non-compliance with the GFS.
- Alternative compliance options (e.g., flexibility mechanisms within the GFS).
- Defining zero- and near-zero GHG emission fuels (ZNZ fuels).
- Determining the emissions factors for various fuels.
- Establishing the objectives and methods for revenue disbursement.
Furthermore, while the overarching framework of these measures is expected to be formalized as regulatory text in MARPOL Annex VI, many of the detailed procedures and guidelines will likely be developed separately and implemented between the adoption and enforcement of these measures.
Energy Transition
The shipping industry’s decarbonization hinges on transitioning to scalable zero-emission fuels. To meet increasingly stringent greenhouse gas (GHG) intensity limits, fuels must possess both significant GHG reduction potential and scalability. While technologies like carbon capture and LNG offer some emissions reductions, they are not considered viable long-term solutions. Biofuels and e-fuels are the remaining options to achieve IMO’s (International Maritime Organization) goals from 2040 onward.
However, e-fuel production is in its early stages and faces challenges related to cost, risk, and availability. Therefore, an early transition to e-fuels, with a gradual increase in their use, is crucial for several reasons:
- Cost Reduction Through Learning and Scale:
- Early adoption allows producers and technology providers to improve their processes and achieve economies of scale, leading to reduced production costs over time.
- Delaying adoption postpones these cost reductions, prolonging dependence on fossil fuels.
- Developing Skills and Workforce:
- Building a skilled workforce for e-fuel production, handling, and distribution requires time.
- Early action allows for gradual skill development, preventing a sudden need for rapid training when demand surges.
- Building Global Supply Chains:
- E-fuels necessitate global value chains, involving production in areas with abundant renewable energy and transportation to end-users.
- Initiating the development of these supply chains early enables controlled growth and minimizes potential bottlenecks in the future.
The Requirements
To realize e-fuel powered shipping, four key investment and commitment areas are essential, each driven by distinct factors:
- Shipowners:
- They must invest in new vessels, considering capital expenditures, fuel costs, and the residual value of various fuel and technology choices.
- Fuel Producers:
- They will invest in production facilities based on anticipated demand for e-fuels.
- Ports:
- Ports need to invest in bunkering and storage infrastructure to support the supply and distribution of e-fuels.
- Cargo Owners:
- Cargo owners will select fuels based on immediate cost and availability.
The cost of compliant fuels will be a critical determining factor. Deep-sea shipping operates within a highly competitive market characterized by relatively narrow profit margins. In the context of IMO (International Maritime Organization) policies, this implies that shipowners and operators will prioritize the selection of the most cost-effective fuels and technologies to meet the Global Fuel Standard (GFS) requirements in the short term.
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Source: Global Maritime Forum
