IBIA CONVENTION 2025: Industry Sees Little Cause for IMO Optimism

A wide range of speakers at the IBIA Annual Convention discussed the IMO delay during Wednesday's session. Image Credit: Ship & Bunker

Senior executives in the bunker and shipping industries see little cause for optimism over what comes next at the IMO after last month's net-zero framework (NZF) delay, but are calling for a united and pragmatic response to determine what can be salvaged in the way of global marine decarbonisation measures.

The UN body's Marine Environment Protection Committee decided last month to delay a vote on the NZF by a year after significant opposition to the NZF emerged, in particular from the US.

The question now facing shipping is what can be achieved over the next year to allow some elements of the NZF to be carried forward.

Shipping and bunkering executives speaking at the IBIA Annual Convention in Hong Kong on Wednesday were less than optimistic about the prospects for the NZF, but made practical suggestions about what could be done to keep the regulatory agenda for shipping's energy transition moving at the IMO level.

"This delay, this pause button, should be seen as the starting signal for recalibration and renewed results," Constantinos Capetanakis, chairman of IBIA, said in opening remarks at the event.

"It reminds us all that transformation is rarely linear."

Alexander Prokopakis, the organisation's executive director, echoed his remarks, calling for a coordinated response.

""This delay gives all of us - industry stakeholders, regulators and associations - the time and responsibility to work together, align interests and deliver practical solutions for a greener and sustainable shipping industry," Prokopakis said.

Decarbonisation Delay

The delay to adoption of the NZF put a spanner in the works for maritime decarbonisation investment plans, with those looking to make those investments having previously relied on the regulation's penalty and reward systems to incentivise the shift to zero-carbon technologies.

"The green footprint got kicked out of the room," a bunker buyer said in a panel session at the event.

"Planned investments have already now been stopped because IMO was not able to get a yes.

"We see dual-fuel built vessels that have been cancelled and been changed back to conventional fuel; we're not talking about 10 vessels, we're talking about 50 to 100 vessels."

Patrick Verhoeven, managing director of the International Association of Ports and Harbors, expressed concern that the delay would halt investment in underdeveloped ports that would be crucial for shipping's energy transition.

"One of the major reasons that we regretted that there was no agreement, especially on the economic measure, is that the fund that would have been established .. would also, at least we hoped, bring investment to port infrastructure in developing countries like the global south, and that is where we need it," he said.

"The network that you will have to create all over the world of energy hubs, especially in places where these fuels are produced - and that is in the south of the world - where are we with that?

"The investment needs are substantial; if there is no net-zero fund, which other funds are available to make sure that the infrastructure is in place?

"We're talking about anything between 50 to 80 billion US dollars of investments that are needed to bring these ports up to speed with ports in the global north."

But Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation, said the MEPC delay was not the only reason for decarbonisation slowing, and argued the case should now be made for shorter-term decarbonisation strategies that can be achieved without the global framework.

"It's unfortunate that it wasn't approved, but the truth is, decarbonisation efforts had slowed even before that," Loo said.

"What GCMD had done at the beginning of the year was to embark on a strategy where we said it's really important to focus on near-term solutions.

"We're not giving up on the longer-term solutions, we're still working on them, but we're going to double our efforts on the near-term solutions, because those are things that you can adopt today."

US Opposition

The US under the Trump Administration was widely cited as being the driving force behind the NZF delay.

The US had threatened to impose tariffs and other punitive measures on countries voting for the deal if it passed, with President Donald Trump characterising the framework as 'this global green new scam tax on shipping'.

"Whilst we believe that it is not a fully thought-out framework, it is the best that's on the table right now," Caroline Yang, CEO of bunker supplier Hong Lam Marine, said in a panel session.

"Let's agree on it, and then let's go into the detailed discussion, and we can have those robust discussions for the next two, three years and we'll come up with a set of rules.

"The way the countries went about it, in a very calculated, strategic and brute-force way of getting the countries to explain or disagree with the net-zero framework, is quite shocking to the system.

"I read an article saying it was like using a cruise missile to redress a traffic violation."

"But they brought up some good points. 

"I think the fund, asking the IMO to hold billions of dollars of fund, does not sit well with the US, and there are other issues."

Maria Skipper Schwenn, the outgoing director of public affairs at global marine fuels group Bunker Holding, said supporters of the deal should be looking at factors beyond US opposition for why it was not yet adopted.

"We have to understand and do a deep dive into the reasons why member states voted the way they did," Skipper said.

"There may be different reasons; some of the reasons took place outside the meeting room ... the US threats of all kinds of retaliations.

"Some were probably also inside the meeting room, actually concerned about some of the consequences of the net-zero framework.

"It's not rejected the net-zero framework, and it's not adopted with explicit acceptance; that would have been far worse, I completely agree, and would have turned IMO into a very weak regulator with huge ramifications and consequences.

"It takes a lot more before this can actually be brought to the table.

"The proponents, at IMO, cannot afford to lose this one."

Net-Zero Fund Blocks Progress

Several speakers highlighted the inclusion of a net-zero fund within the framework as a key reason for opposition.

The NZF would have required the purchasing of 'remedial units' by ships with carbon intensity over the required thresholds, with funds from the sale of these units controlled by the IMO and distributed in part to ships using zero- or near-zero-carbon fuels. Critics aligned with the Trump Administration characterised this aspect as the UN imposing a global carbon tax, and questioned whether the funds raised would be handled appropriately and transparently.

"I think it is going to be difficult now for IMO to agree a mechanism that includes a fund, certainly a fund that was going to generate - let's be clear - tens of billions of dollars," Simon Bennett, deputy secretary general of the ICS, said.

Bennett stressed that this was his personal view rather than that of the ICS as an institution, as the organisation had not yet formed its own conclusions on the subject.

"I think it's very unlikely that the US is going to change its position, and we have to recognise that the US does wield incredible power, both inside and outside the organisation.

"But actually, it's always good to be optimistic.

"I think IMO can adopt some kind of agreement ... it could be a technical agreement primarily, but potentially we could still keep the surplus units, or maybe we can think of something else that would be acceptable to the Americans and their red line, which is really about having a UN organisation collecting lots of money."

No Change Means No Framework

Most speakers were united in the view that attempting to put the NZF up for a vote again late next year with little change would be unlikely to deliver results.

"With IMO, something has to change to put the same proposal back on the table in November," Bud Darr, CEO of the Cruise Lines International Association, said.

"To me, it is an opportunity to fail exactly as we failed before, or maybe with some variation.

"Because I don't think success here is defined as, 'OK, we have two thirds of the parties to the annex present voting yes - you lose'.

"It has to be more sophisticated than that, and more collaborative than we have seen to date in that regard."

But he doubted whether that could be achieved in time.

"I do not currently see a process in place that has the structure to allow another reasonable proposal to be made, or a modified one," he added.

"That needs to happen now, and the industry, I think, needs to be calling for it, and we need to work together."

Others questioned whether the IMO itself was the right body to be tackling the issue, now maritime decarbonisation has taken on such political intensity.

"It's not about whether IMO should control anything; it's about what is the best way of doing it," Edmund Hughes, IBIA's IMO representative, said.

"I'm a great believer in IMO, but maybe it's beyond its abilities, and we have to accept that."

"Maybe we have too much expectation and put too much pressure on the IMO, because my belief is IMO didn't fail," an audience member said

"The governments failed, because IMO doesn't have the power."

But several others argued progress should be continually fought for at the IMO, with a unified approach from all stakeholders key to delivering results.

"Let's continue to work together in IMO despite the adjournment," Verhoeven said.

"I think we need together as a supply chain to come up with a united front there."