IMO may codify alternative net-zero bunker rules in 2027: US FMC

The International Maritime Organization (IMO) may begin discussing an alternative Net-Zero Framework (NZF) in the coming weeks, with finalization expected in 2027, according to US Federal Maritime Commission Chairman Laura DiBella. The UN agency is set to hold meetings from November 23 to December 4 to discuss the framework, following a decision in 2022 to postpone its adoption by a year due to US opposition.

DiBella expressed optimism about reaching a consensus, although she did not expect any formalization this year. The NZF, as currently proposed, would impose mandatory costs on maritime greenhouse gas emissions starting in 2028, aiming to drive a shift towards low-carbon bunker transition. The US has estimated that the framework could cost the shipping industry between $53 billion and $265 billion annually, arguing that the additional expenses would ultimately be passed onto businesses and consumers.

The US has indicated a preference for a commercially viable, technology-neutral NZF with achievable emissions targets, voluntary compliance, and no mandatory carbon levies collected by the IMO. Washington is open to the idea, suggesting that such an approach would help industry make necessary investments in alternative fuels and accelerate the transition.

DiBella has shown a favorable attitude toward LNG and bio-LNG, stating that the fuels could potentially meet over 60% of global maritime bunker demand by 2050. She expressed confidence in the US's capacity to supply these fuels as the world's largest LNG exporter, potentially fostering investments in the expansion of bio-LNG production through a "well-designed global fuel standard."

According to Platts' global bunker cost calculator, the average price for 0.5%-sulfur fuel oil was $17.90 per gigajoule in Rotterdam in October, compared to $28.78 per gigajoule for LNG and $51.71 per gigajoule for bio-LNG.