Is a New Biofuel Opportunity Emerging on the High Seas?

by Cassidy Walter (Successful Farming) • Oceangoing vessels over 5,000 gross tons make up 85% of global shipping CO2 emissions, according to the International Maritime Organization.

According to the International Maritime Organization (IMO), the U.N. agency that oversees international shipping, vessels over 5,000 gross tons make up 85% of global shipping CO2 emissions. Ships of this size consume about 70–80 billion gallons of fuel per year, according to the Renewable Fuels Association (RFA), a trade association for the U.S. ethanol industry. RFA CEO and President Geoff Cooper wrote in an association position article in fall of 2025 that 5% of that market “would equate to a game-changing demand boost of 4–5 billion gallons, while simultaneously increasing corn demand by 1.5 billion bushels or more.”

“Our industry has been, in some respects, kind of artificially pegged to that 15–16 billion gallons, even though we have the capacity right now to do over 20 billion gallons,” said Tad Hepner, RFA vice president of strategy and innovation. “And then, we also have the ability for farmers to deliver more corn to ethanol plants to produce even more. And so, our opportunity lies in just being able to participate in this fuel pool.”

The American biodiesel and renewable diesel industries are also eyeing marine transportation.

Volkmar Galke, executive director of sales for WinGD, which designs marine engines, described typical marine fuel, known as heavy fuel oil, as a residual product of the refining process and is “quite literally the bottom of the barrel.” Galke said it has historically been one of the lowest-cost fuel options available to the shipping industry.

He added the economics of shipping have long been built around using the cheapest fuel options, making the transition to lower-emission alternatives a significant commercial and operational shift for the industry.

“Moving to cleaner fuels is not simply a technical transition,” he said. “It represents a fundamental change in how the industry thinks about fuel, cost, and long-term investment.”

A couple of efforts underway may incentivize the industry to use biofuels. One is the IMO’s Net-Zero Framework, aimed at reducing greenhouse gas (GHG) emissions from oceangoing vessels over 5,000 gross tons.

Zoltán Szabó, secretary general of the Climate Ethanol Alliance, said under the IMO Net-Zero Framework, biofuels would be attractive options for shipping vessels to reduce emissions. The Climate Ethanol Alliance has a consultative status to the IMO and the right to submit proposals.

Szabó said the IMO was set to consider the framework last October but then, unexpectedly, the U.S. opposed the initiative, and discussion was postponed. The next opportunity it will have to be adopted as official policy is December 2026.

According to the IMO website, the framework “sets up a global system where ships, regardless of their flag, must use cleaner fuels or technologies. If their GHG fuel intensity is too high, they will pay a price corresponding to the greenhouse gases they emit above certain thresholds. Ships will get rewarded for using cleaner fuels.”

In a joint statement last October explaining U.S. opposition to the framework, U.S. Secretary of State Marco Rubio, Energy Secretary Chris Wright, and Transportation Secretary Sean Duffy said:

“The administration unequivocally rejects this proposal before the IMO and will not tolerate any action that increases costs for our citizens, energy providers, shipping companies and their customers, or tourists. The economic impacts from this measure could be disastrous, with some estimates forecasting global shipping costs increasing as much as 10% or more.”

Szabó said he hopes the administration can come to see the Net-Zero Framework as a policy for U.S. agriculture and industry but as of mid-March did not see much progress on that front. Onstage during a panel discussion at the RFA’s National Ethanol Conference in late February, Szabó said without support from the United States, the framework won’t be adopted.

Modifying the Renewable Fuel Standard

A different approach that may incentivize U.S. shippers to use biofuels is to modify the Renewable Fuel Standard (RFS). The Renewable Fuel for Ocean-Going Vessels Act would allow biofuel gallons used in those vessels to count toward refiners’ RFS obligations.

The bill was introduced in both chambers of Congress last March but has yet to pass. Cobb said refiners are concerned the bill would lead to increased demand for biofuels and, therefore, higher RFS obligations. READ MORE