Dutch company GoodFuels has been analysing the recent IMO MEPC 80 meeting and concluded that this has brought forth promising regulatory updates to benefit marine decarbonisation trajectories, including the use of Sustainable Marine Fuels (SMF).
The company says that the ambition to strive for net-zero GHG emissions in 2050 is a welcome, overarching result, promising to help accelerate the common goal of decarbonisation of global shipping.
To actually achieve the set GHG reduction goals, it now comes down to designing the right measures for the sector. To this end, IMO’s GHG Strategy sets out two types of measures which will be developed:
- A technical element, namely a goal-based marine fuel standard regulating the phased reduction of the marine fuel’s GHG intensity; and
- An economic element based on a maritime GHG emissions pricing mechanism
For the marine fuel standard, GoodFuels expects to see something very similar to the Fuel EU Maritime regulation (effective in the EU per 2025). Within IMO, there is broad support for such a measure. For the emissions pricing mechanism, it remains a little more vague, as different proposals are on the table. It is still unclear if the mechanism will come in the form of tradeable allowances (like the EU ETS, effective in 2024) or more in the form of a ‘carbon levy’.
GoodFuels is particularly encouraged by the adoption of Lifecycle Assessment (LCA) guidelines. These confirm the use of a well-to-wake calculation of GHG emission factors of different fuels, which provides a clear and uniform standard going forward. Having a clear and defined method of measuring helps shipowners in making fair comparisons in choosing the most suitable green fuel for their fleet. It will help stakeholders collaborate and clear the way for longer-term emissions reduction strategies to be formed. The adopted LCA Guidelines are expected to be further developed and fine-tuned in the coming years.
Although the LCA Guidelines do not yet apply to calculating the influence of biofuel use on a ship’s CII score, this is to be addressed at the next revision of CII in 2026. Meanwhile, as IMO felt a need to provide clarity on the effect of biofuels on CII scores, interim guidance would apply in the meantime, taking effect from 1 October 2023. This means that biofuels can use a CO2 conversion factor equal to the WTW GHG emissions factor if they:
- Are certified by an international certification scheme (i.e. ISCC or RSB);
- Meet sustainability criteria;
- Provide WTW GHG emissions reduction of at least 65% compared to fossil MGO (of 94 gCO2e/MJ); and
- Have a Proof of Sustainability (PoS) or similar documentation from a recognised scheme, to be provided along with the bunker delivery note.
GoodFuels supports this interim solution while awaiting definitive application of the LCA Guidelines under CII. This allows the shipping sector to take immediate measures to decarbonise. As a matter of principle, the use of GoodFuels’ sustainable biofuels ensures a minimum GHG emissions reduction of 75% (typically being even 83% or higher), which will allow customers to achieve even steeper improvement of their CII score.
Goodfuels says it ensures shipowners that all feedstocks for its biofuels are certified as waste or residue, with no land-use issues and no competition with food production.
