An array of measures focused on efficiency needs to be applied to the existing global fleet in order for the maritime industry to minimize the amount of alternative fuels required and, thereby, cut the overall cost of the energy transition, a new paper from the Athens-based non-profit organization Maritime Emissions Reduction Center (MERC) has found.
As underscored in the paper , titled “The IMO Mid-Term GHG Reduction Measures as a Driver for Efficiency” , the maritime industry is at a critical crossroads, balancing the delicate scales of its role as a cornerstone of global commerce and economic growth while the urgency to slash greenhouse gas emissions rises. Pressures from both regulatory bodies and a market increasingly driven by sustainability leave little room for complacency.
In July 2023, the International Maritime Organization (IMO) charted an ambitious course with a revised set of GHG reduction targets , spotlighting the need for “concrete” changes in how the industry operates.
Expected to be approved in April 2025 and to enter force in 2027, the measures entail reducing carbon dioxide (CO2) levels by 40% by 2030, the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources representing 5%—striving for 10%—of energy sources used by 2030 as well as going net-zero by 2050. The measures also include an economic element, i.e. a GHG pricing mechanism.
That said, according to the paper, while alternative/low-carbon fuels will play a critical role, most of them are as of yet unsuitable for existing vessels. They are expected to come with a ‘significant’ price tag compared to conventional fuels, especially in the early phase of the energy transition, and be available only at ‘key’ bunkering hubs.
It is understood that this will most likely be the case for the medium 2030 term as demand skyrockets, with shipping currently estimated to use less than around 0.5 million tonnes of pure biofuels yearly, accounting for circa 0.2% of the energy used by the industry.
At the same time, the shipping industry is competing with other sectors, in particular aviation and road transportation, for suitable drop-in fuels, i.e. alternatives to fossil fuels that can be blended or used directly in existing installations without major technical modifications.
The IMO’s mid-term measures’ impact on fleet efficiency
As per the paper, the mid-term measures may carry the possibility to enhance shipping efficiency through the introduction of the aforementioned economic elements, in particular, which will put both a direct and indirect price on GHG emissions and, might, therefore, encourage investments to cut energy use.
These factors were discussed at the last IMO meetings, namely the Intersessional Working Group on Reduction of Greenhouse Gas Emissions from Ships (ISWG GHG 17), held in September 2024, and the Marine Environment Protection Committee (MEPC 82), held from September 30 to October 4, 2024.
As per the paper, discussions also included talks on whether the measures would be integrated or if there would be two separate technical and economic elements, as well as the incentive/reward for using zero or near zero fuels and energy sources.
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As disclosed in the paper, a Comprehensive Impact Assessment (CIA) analysis has hinted that the reduction of energy use in the global fleet could decrease the need for low GHG emission fuels and onboard carbon capture which could, as a result, minimize overall costs and increase the ability to reach emissions trajectories under fuel feedstock supply constraints.
The paper found fleet efficiency to be vital in another aspect: achieving GHG targets could increase costs by 16–40% by 2030 under the “base” trajectory and 26–71% under the “strive” trajectory.
That said, a veil of uncertainty still cloaks the view of the future regarding the trajectory the IMO will agree on concerning the reduction of GHG intensity in shipping, as options whether there will be a standalone pricing element—in the form of a contribution or levy—or an element as part of an integrated measure are being weighed.
It is for this reason, MERC emphasized, that improving fleet efficiency must be a priority. In other words, given the financial components and the current availability of drop-in fuels, such as biofuels, fleet efficiency could play a “make or break” role in reducing GHG emissions and ensuring that the existing fleet contributes to worldwide decarbonization efforts while continuing its role in supporting global trade.