IMO midterm measures could add $100B per year to fleet bunker costs

May 8 ------ The International Maritime Organization’s (IMO) recently agreed Net-Zero Framework is projected to add an 82% premium on top of the fleet bunker costs by 2035. 

Money raised could amount to almost $100 billion annually for bunker fuel within the next decade, according to Maritime Strategies International (MSI), a UK-based research and consultancy firm for the shipping industry. MSI released a new integrated platform for market analysis, vessel performance and asset valuation which has given an early indication of the impact of the IMO’s mid-term measures on the bunker market. As explained, the platform projected the future fuel costs for all conventionally-powered ships included in it (over 30,000 vessels). 

From another perspective, this also highlights the opportunity for the shipping bunker market – an annual pot directed towards drop-in biofuels and low-carbon alternatives that could rise to $100 billion per year within the next decade. Last month, the global climate regulation agreement was approved by the IMO at the 83rd session of the Marine Environment Protection Committee (MEPC 83). The Net-Zero Framework is said to be the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector. Specifically, the approved measures include a new fuel standard for ships and a global pricing mechanism for emissions. These measures are set to be formally adopted in October 2025 and enter into force in 2027. 

Once adopted, they will become mandatory for large ocean-going ships of over 5,000 gross tonnage, which emit 85% of the total CO2 emissions from international shipping. By progressively decreasing the GHG fuel intensity and accelerating decarbonization of ship fuels, the consequential reduction in GHG emissions is expected. 

Source: offshore-energy.biz