Shipping industry faces fuel dilemma in bid to cut emissions with unclear regulatory guidelines

Global shipping firms are looking for ways to lower their carbon footprints, particularly as the International Maritime Organization (IMO), which regulates the global shipping industry, is being pushed to implement a charge on the sector’s greenhouse gas emissions.

81^st IMO MEPC meeting last week, participants agreed on a possible draft outline of an IMO net-zero framework still open to discussion and could be adopted or amended at the group’s next meeting this September.

Shifting to cleaner burner fuels is one path to lowering emissions, executives said last week at the CERAWeek energy conference in Houston, but many in the industry are reluctant to make the changes needed to run new fuels – such as retrofitting engines or purchasing new vessels – given the lack of a longer-term regulatory framework.

“None of us like the fact that we are burning dirty fuel. But no authority is answering what the best fuel is”, Andrew Jamieson, co-head of Clearlake Shipping said on the sidelines of the conference..

The lack of clarity leaves players unwilling  to commit to one less carbon-intensive fuel over another for their fleets, be it hydrogen-carriers methanol, ammonia, biodiesel or liquefied natural gas (LNG).

Fuel-uncertainty is driving up costs as companies are forced to diversify their investments across multiple fuel options, Seonghoon Woo, the CEO of Amogy which builds zero-emission ammonia-fueled power systems, told a panel at CERAWeek.

And cleaner marine fuels, like methanol and ammonia, are also seeing demand from other sectors, such as across Asia where countries are seeking to decarbonize power plants away from coal.

“The question is where shipping will be in the pecking order of availability of fuels going forward”, American Bureau of Shipping CEO, Christopher Wiernicki said on Thursday 28 Mar at CERAWeek.