Three Impacts Of The IMO’S New Fuel

Before EEDI was enforced in 2013, there were no efficiency criteria for newbuild vessels, meaning there are a large portion of low quality, poor efficiency vessels in the fleet that are aging to the 15YO+ age range. Credit: Veson Nautical

The International Maritime Organization (IMO) recently hosted the 83rd meeting with the Marine Environmental Protection Committee (MEPC 83), resulting in a new fuel intensity target, which is set to come into force no later than March 2027.

This new regulation is similar to the Fuel EU regulation enforced this year, but with global fleet coverage. The major effect of this new IMO GHG regulation will be to enforce a financial penalty for using cheaper, carbon intensive fuels like Heavy Fuel Oil (HFO), with the money collected from the scheme being fed back into the “IMO Net-Zero Fund” which will used to develop and support green shipping initiatives.

The regulation should level the playing field for alternative fuels such as ammonia and methanol. Due to the significantly higher costs of building and operating alternative-fueled vessels, these vessels are at a significant economic disadvantage compared to those that are conventionally fueled, unless use…