Global Emission Rules to Lift Alternative Bunker Fuel Demand: Panel

Global regulations to curb the shipping industry’s greenhouse gas emissions will bolster demand for alternative bunker fuels and spur their production, an expert panel at the International Bunker Industry Association’s annual convention said on Wednesday.

Bethann Rooney, Director of Port Department of the Port Authority of New York and New Jersey, said there was a “chicken-and-egg” situation in expanding the use of alternative bunker fuels for more than a decade at her agency, which operates 180 maritime facilities in the two states.

“We’ve got plenty of capacity in terms of companies willing to provide an alternative fuel. But there has to be enough demand in order for them to make the investment to switch over,” Rooney said. “And there’s not a lot of demand.”

Of the estimated 3,000 deep-draft vessels that visited PANYNJ in 2024, only four vessels could consume alternative bunker fuel. However, the number of vessels is expected to rise to 45 by the end of the year, she said.

Despite that rapid transition, none of those vessels can refuel alternative sources in New York and New Jersey due to a lack of infrastructure, and there are state regulations that restrict ship-to-ship transfer of liquefied natural gas, Rooney noted.

In late October, the Ports of Los Angeles and Long Beach have identified LNG and methanol as the most viable alternative marine fuels in the near to medium term, with combined demand potentially reaching 365,000 metric tons/year by 2030.

Meanwhile, the global shipping industry is considering other alternative bunker fuels including methanol, ammonia, biofuel, hydrogen and electricity.

Bo Cerup-Simonsen, CEO of Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, a nonprofit advocacy group, said at the panel that bunkering companies will be motivated to create a supply chain for alternative marine fuels in response to strong demand signals if global regulators like the International Maritime Organization set a clear target.

Cerup-Simonsen said demand for low-carbon fuel had also surged following the adaptation of IMO 2020 — a landmark marine environmental rule that came into effect at the start of 2020 and reduced the maximum allowable sulfur content in ships’ fuel oil from 3.5% to 0.5% outside designated emission control areas.

The IMO is expected to vote on Net-Zero Framework — a set of regulations aiming to reduce greenhouse gas emissions from global shipping — in late November to early December. The regulations look to help the IMO meet its goal of net-zero emissions by or around 2050.

Reporting by Frank Tang, frank.tang@dowjones.com and Allegra Fradkin, allegra.fradkin@dowjones.com; Editing by Dean Visser, dean.visser@dowjones.com

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