Alternative Fuels

The International Maritime Organization’s revised GHG Strategy adopted in July 2023 includes an enhanced common ambition to reach net-zero GHG emissions from international shipping on or around 2050 and more specifically, a commitment to ensure an uptake of zero and near-zero GHG fuels by 2030. 

The IMO Life Cycle GHG Intensity Guidelines establish a methodology for determining the Well-to-Wake (WtW) lifecycle GHG intensity of all marine fuels. The guidelines also contain instructions on how to label fuels using the Fuel Lifecycle Label (FLL) system to convey the relevant information in a harmonised way from the fuel producers to the ships receiving the fuels. In the future, such FLLs will need to be verified and certified by third party verifiers as evidence of compliance with the expected international fuel standard (IMO GHG Fuel Standard (GFS)). 

Alternative fuels include electro fuels (eFuels) manufactured in a sustainable way, ie by the use of sustainable energy sources. Such fuels are for example green ammonia, green hydrogen, and green methanol. Alternative fuels could also be blue fuels produced using carbon capture and storage (CCS), and biofuels, such as dimethyl ether (DME), produced from sustainable biomass. Adapting the global merchant fleet and the global fuel supply chains to alternative fuels remains a key challenge. Innovative solutions and investments are required to secure the availability of large-scale renewable energy sources. Such sources are fundamental for upscaling the production of alternative fuels and to deliver sufficient quantities to achieve the IMO GHG Strategy goals. This will require large investment in energy infrastructure. There is a limited number of market players large enough to create a demand of proportionate volume to justify such investment. Certainty in future uptake and demand from the maritime industry is key and the basis on which economically viable investments will be made.  

Safe use of alternative fuels 

Alternative fuels may be a challenge for safe ship operations because many of these fuels are significantly more hazardous than fossil fuels. BIMCO has worked with a group of flag states and classification societies in the Maritime Technologies Forum (MTF) to develop guidance for the safe implementation of alternative fuels in ships. This guidance is being shared with IMO. Safety on board ships is managed in accordance with the International Safety Management (ISM) Code which was recently confirmed fit for purpose by IMO’s Maritime Safety Committee, so the guidance focuses on how to apply the ISM Code in the context of implementation and use of alternative fuels.  BIMCO is also working with the MTF to explore relevant training aspects related to the Standards of Training, Certification and Watchkeeping for Seafarers (STCW) Convention, such as the development of regulatory requirements (model courses) and providing incentives for commercial training providers. Finally, the MTF has identified a gap in the Maritime Labour Convention (MLC) where health and safety impacts from use of alternative fuels on seafarers’ working and living conditions could potentially be addressed. 

Traceable and reliable fuel certificates 

A thorough WtW life cycle assessment approach is critical when considering alternative fuels. This rest on implementation of traceable fuel certificates containing reliable fuel lifecycle labels for the Well-to-Tank (WtT) emissions. 

It is not possible for a ship to ascertain if an information, such as GHG intensity, stated on a bunker delivery note (BDN) is correct. 

Robust oversight throughout the entire fuel supply chain is necessary to mitigate risks of fraud with documentation and fuel certificates. There is limited sustainable biomass available globally for production of biofuels, thus creating a potential gap between demand and supply. This could inadvertently incentivise the use of non-sustainable biomass, leading to biofuels falsely certified as sustainable. Such a scenario could have considerable negative consequences in relation to biodiversity, natural carbon sequestration, and land-use. 

Although the European Union Database for Biofuels (UDB) and fuel certificates under the Renewable Energy Directive (RED) provides a step in the right direction, the difficulty with the regional European measures is that they attempt to enforce EU legislation to a global market for production and supply of alternative fuels to ships. Additionally, the UDB, the RED and "the Gas package"¹ are written with focus on European land-based industries and are difficult to implement by the global shipping industry, where ships call at ports and bunker fuels worldwide 

To prepare for an upscaling of the supply and geographical spread of alternative fuels, BIMCO is developing contractual solutions for the industry addressing various aspects of the transition to alternative fuels. An LNG Annex to the BIMCO Bunker Terms 2018 has already been published as have additional clauses to be incorporated in charter parties for LNG fuel supply. BIMCO is currently working on developing supply terms for methanol followed by ammonia as well as terms addressing future sustainability requirements.

¹ The European Regulation on the internal markets for renewable gas, natural gas and hydrogen, and the European Directive on common rules for the internal markets for renewable gas, natural gas and hydrogen.