Government
Risks increasing
Momentum is building behind a universal GHG price and a package of IMO mid-term measures to be rolled out this year . While the measures are aimed at strongly incentivizing the fuel transition , the risk facing shipowners as they choose fuel pathways is also increasing .
“ At the point when it is beyond doubt that fossil fuel technologies — including LNG — face rapid contraction , it will be too late for many to take corrective action ,” Smith warned .
Vessels capable of running on LNG or methanol comprised 70 % of container ship orders in 2024 . Shutterstock . com
The IMO will be voting on mid-term measures that include a fuel standard and an economic pricing mechanism on carbon emissions at its Marine Environment Protection Committee ( MEPC 83 ) meeting in April . Assuming its member states approve them , the IMO plans to implement those measures in October .
Wood-Thomas said the decisions made at the IMO will be “ massively important ,” with the economic measure intended to narrow the price gap between current bunker fuels and the greener alternatives .
But he said that , for the transition to greener fuels to be effective , the IMO ’ s economic measures , whether direct carbon pricing or other mechanisms , needed to “ actually enable the use of better , lower-emission fuels .”
“ Merely narrowing the price differential doesn ’ t necessarily cut it ,” Wood-Thomas said . “ For example , if we ’ re looking at a $ 1,500 per metric ton price on a particular fuel , and the measure cuts that gap by $ 300 , it doesn ’ t matter .
“ Because you can ’ t run a vessel in a commercially viable manner if you are taking a $ 1,200 hit for every ton of fuel you burn , especially if your competitors are able to exist on another fuel footing ,” he added .
email : greg . knowler @ spglobal . com www . joc . com March 3 , 2025 | Journal of Commerce 51