The Wait on Maritime Fuels

September 24, 2026

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by Don Schinske (Low Carbon Fuels Coalition) Hawaii's newly approved Clean Fuel Standards (CFS) legislation includes an "opt-in" provision for maritime fuels, in line with the programs in California and Washington. Which makes it tempting to look at the map now and at least play with the idea that these states could align policies to spur a reduction in the carbon impact of their shared ship traffic.

"Tempting" if not exactly "encouraging." State opt-in policies are helpful. For example, under California's LCFS program, with an opt-in for maritime fuel, the US Navy has been able to generate several million dollars in credits each year by ships plugging into shore electricity when docked in San Diego. But CFS programs by themselves prompt the most change to the degree that the fuel is fungible (as in the case with RNG), and when infrastructure changes are modest. Some ocean-going vessels and port facilities could potentially be retrofitted to work with different fuels. However, CFS programs alone won't spark the decades-long planning and finance commitment required to build new ships, new port facilities, and new storage. Also needed are consistent supplies of replacement fuel, be it methanol, hydrogen, ammonia, and so on. Crucially, government policy at the state, national and international levels needs to be stable, long-term, and reasonably well-aligned.

To that end, we might expect some encouragement for transition from the new federal 45Z regulations. Producers of alternative fuels deemed "suitable" for on-road or airplane use can claim credits even if that fuel is ultimately used by ships. Also in the works is bipartisan federal legislation, the Renewable Fuel for Ocean-Going Vessels Act (S. 881), which would allow producers of alternative maritime fuels to retain their RIN credits from the federal Renewable Fuel Standard if the fuel gets used by ocean-going vessels. Clean fuel program credits (in states where they exist) can stack with RINs to increase the financial incentive to switch.

Right now, surely the key action to track is the reopened deliberations of the International Maritime Organization (IMO). The international body of 176 countries has charged itself with adopting programs to reduce emissions from global shipping to net zero by 2050, with several tough milestones along the way. Negotiations last year adjourned in exasperation, with supporters of an international carbon tax (the EU and Brazil) clashing with the opposing oil-producing countries and "flag states" of Liberia and Panama. China is working its own angles but nonetheless supporting the process. Not surprisingly, the US is behaving like its current weird self: throwing elbows, bashing global agreements of any kind, and tapping one guy's shoulder over here then blaming that guy over there.

Here's a good write-up of the situation in the UK publication Carbon Brief. It's almost like following the World Cup, minus the rowing Norwegians. As it happens, Norway, despite being an oil producer, is on board with the IMO carbon tax proposal. READ MORE

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Q&A: How countries got the global 'net-zero' shipping deal ‘back on track’ (Carbon Brief)

Excerpt from Carbon Brief: Opponents said they were trying to seek consensus, but supporters, such as Brazil, the EU and Pacific islands, pointed out the framework was already a “careful balance of interests”.

Liberia and Panama – “flag states” for a third of the world’s commercial shipping – led a counter-proposal, alongside Argentina, which effectively cut carbon pricing from the framework.

Ultimately, however, the meeting ended with a reconfirmation that delegations are committed to rebuilding consensus on global shipping emissions.

The framework survived the negotiations and the committee will now try to adopt it at its December 2026 meeting.

Below, Carbon Brief explains why the framework has proved so contentious, who the major players have been and what the final outcome was at the latest IMO meeting.

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A coalition of countries, including the US, Saudi Arabia and various fossil-fuel producers, strongly oppose the IMO net-zero framework that was agreed last year.

They were supported by a wider group of industry bodies and major flag states – countries where many ships are registered – which were instrumental in advancing “alternative frameworks” at the latest meeting. (See: What ‘alternative frameworks’ were discussed?)

Documents submitted ahead of the April 2026 meeting laid out the basis for this opposition, with the US criticising the net-zero framework’s “significant shortcomings”, concluding:

“The most appropriate path forward is to end consideration of the IMO net-zero framework entirely.”

More nuance came in a statement from a group of primarily large fossil-fuel producers, including Saudi Arabia, Russia and Algeria, which was also backed by the US.

It stressed the need for “alternative” frameworks, with an emphasis on achieving consensus, as well as “practicability, equity and trust”. In practice, this meant a system without any carbon pricing, “top-down restrictions” or “international penalties”.

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Opposing countries said any outcome should be “technology-neutral”, meaning it should not disadvantage specific fuels, potentially including liquified natural gas (LNG) and other fossil fuels.

These nations also stressed what they claimed were the potential impact of additional net-zero costs on “food and energy security”.

Much of their criticism was based on supposed economic harm that the net-zero framework would cause, particularly in developing countries.

These arguments purported to be about fairness for these countries. Yet some opponents of the framework were also calling for the IMO fund to be abandoned.

If this IMO fund were lost, then developing countries could lose out on a potential source of support for their own maritime decarbonisation, as well as potentially their broader energy transitions.

As well as supporting the fossil-fuel producers’ call for “alternative frameworks”, the UAE filed its own submission questioning the legitimacy of the IMO in establishing a new fund.

The US submission to the IMO stated that the fund would provide “pennies on the dollar compared to the economic hardship” brought about by the framework overall.

US delegates distributed flyers at the IMO meeting, emphasising the financial burden they claimed the framework would place on developing countries. While low-carbon shipping will come with substantial costs, analysts said the US figures were “not credible”.

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Campaigners accused the US of “pretending to care about other countries’ economies”, pointing out that the energy crisis – triggered by the US-led war on Iran – is costing the shipping industry billions.

Moreover, they stated that the Trump administration’s new port entry fees would be a far greater financial burden for the global shipping industry than the mooted net-zero rules.

Analysis by UCL shipping researchers ahead of MEPC84 concluded that the Trump administration would potentially be less able to exert “soft power and influence” at the talks than last year. Additionally, it pointed to a Supreme Court ruling that limited the US’s capacity to impose punitive tariffs.

What ‘alternative frameworks’ were discussed?

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What do supporters of the net-zero framework want?

There were many vocal supporters of the net-zero framework at MEPC84, including a broad range of developed and developing countries.

Among them were the EU, Brazil, Mexico, Kenya, Pacific island states, Australia and the UK.

Having supported the net-zero framework last April, but voted to postpone its adoption in October, China expressed support for a carbon-pricing system and an IMO fund in a technical submission issued ahead of MEPC84.

The major shipping nation had remained quiet during the US-Saudi disruption in October last year, so its submission was viewed as a positive for backers of the framework.

Colombia, which was simultaneously hosting a global conference on “transitioning away” from fossil fuels, also emerged as a supporter of the net-zero framework.

There has also been support from some sections of the shipping industry, including a large coalition of ports, logistics companies and clean-fuel providers.

Supportive nations pointed out that the net-zero framework was the result of years of talks and already represented what Pacific island states called a “fragile compromise”. They framed it as the “only politically viable option” for hitting the IMO’s net-zero goal.

Pacific islands and around 50 other nations had originally called for a universal carbon levy on shipping. Ultimately, they were forced to accept the net-zero framework as a compromise, but Pacific islands said they would revert to their call for a levy if they felt the framework was being “watered down”.

The demand for a levy was strongly opposed by numerous countries, including some of the current framework’s supporters, such as Brazil and Australia.

In a bid to revive the net-zero framework, a submission by Brazil sought to “dispel any possible potential misunderstandings”, stressing that the approach is “flexible” and “should not be mistaken for a ‘global tax’”.

For example, Brazil notes that the framework “does not exclude any fuels” and that even existing “bunker” fuels and LNG could be used, as long as carbon intensity targets are met. (Ships could, for example, use carbon capture and storage to meet the goals.)

Michael Mbaru, a low-carbon shipping expert for the Kenya climate special envoy, told a briefing ahead of the conference that the net-zero framework was in developing countries’ interests:

“If the global package unravels, pressure grows for more regional and unilateral measures instead, and this is particularly difficult for African and other developing countries, because fragmented regulation raises compliance, complexity [and] transaction costs.”

In response to the Argentina-Liberia-Panama proposal that opponents of the framework had coalesced around, the Solomon Islands pointed out that, in seeking “consensus”, this group was ignoring the numerous parties that wanted more ambition, rather than less. It stated in a submission:

“There is no reason to expect that a new proposal, that differs from the IMO net-zero framework, would find a majority, much less a consensus.”

Nevertheless, supporters of the net-zero framework also acknowledged that there were some areas where greater clarity might help countries to finalise the details.

These areas include clarifying technical considerations such as: how fuel intensity is calculated; addressing the potential impacts of net-zero rules on food security; the governance of the IMO fund; and regulation of sustainable fuel certification schemes.

Given this, there was broad support for more discussions at an extra “intersessional” meeting later this year, in order to hash out these final details before attempting to approve the net-zero framework once more.

What was the final outcome from the IMO meeting?

Ultimately, the IMO’s net-zero framework remains on the table and will now be negotiated further in the autumn, ahead of the next MEPC session in December 2026.

The decision, as well as the general willingness to move forward noted by numerous observers, was broadly welcomed. IMO secretary-general Arsenio Dominguez said:

“We are back on track, but we have to rebuild trust. I encourage you to maintain this momentum through your intersessional work and to prepare submissions that can bring the membership together.”

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According to the UCL Shipping and Oceans Research group, despite numerous efforts to put forward options that would be more acceptable to the US and Saudi positions – such as technical-only proposals – these failed to find “viable ways forward”.

This is important, as normally within the IMO, when two proposals have similar levels of support such as this, they can be merged or a compromise found.

On the final day of negotiations, countries agreed to take forward the original net-zero framework, which was agreed in principle back in April 2025.

More than half of the nations at the IMO meeting were in favour of it, including members such the EU, Brazil, Colombia, Kenya, Tuvalu and others. They accepted the framework, as originally agreed, as the basis for further work.

The countries that supported it remain largely unchanged from previous meetings, but there was additional support.

Most of the supporters had opposed the adjournment at the IMO session in October, which pushed the adoption of the net-zero framework back. But five additional countries that had supported adjournment switched sides, along with 10 countries that had not taken a side, now clearly supporting the framework, according to UCL.

Others pushed back against the net-zero framework and called for reopening it for substantial changes. This included the US, UAE, Saudi Arabia, Liberia and others, predominantly oil and gas exporters. READ MORE