ICS and IBIA Push for Significant Green Fuels Rewards at IMO

ICS and IBIA want IMO to set clear rewards for using green fuels from 2026 to support the 2030 target. Image Credit: Ship & Bunker

The International Chamber of Shipping (ICS) and bunker industry body IBIA are urging the IMO to establish robust financial incentives for ships powered by zero and near-zero (ZNZ) marine fuels.

In a submission to the IMO this month, the two organisations press for reward guidelines to be agreed at MEPC 84 in 2026.

Without them, they warn, shipowners and bunker suppliers will not have the certainty needed to commit to the large-scale investments required to meet the goal of 5-10% of shipping's energy coming from ZNZ sources by 2030.

Their proposal centers on the IMO Net-Zero Fund, a key element of the IMO's wider Net-Zero Framework. The fund is designed to collect GHG pricing contributions from ships and redistribute them as rewards for ZNZ fuels and technologies, while also supporting research and infrastructure development.

The IMO Net-Zero Framework was agreed in principle by member states in April and is set for adoption at an extraordinary MEPC session next month.

Fund Could Raise $10-15 Billion in 2029

Under the plan, the framework would enter into force in 2027, with ships beginning compliance reporting the following year. That verified data from 2028 would then underpin the fund's first likely disbursements in 2029, rewarding ships for their use of ZNZ fuels.

ICS and IBIA argue that the revenues from GHG pricing expected between 2029 and 2033 should be more than sufficient to cover these rewards.

"Due to the very low availability of ZNZs between 2028 and 2032, the total amount of revenue that will be generated for the IMO Net-Zero Fund from GHG emissions pricing contributions by ships between 2029 and 2033 will be much larger than the industry had anticipated," the document states.

"Even in 2029, it is estimated that it will not be less than the US$10 to US$15 billion that has been suggested by some commentators."

How Rewards Could Work

The submission calls on IMO to fix a guaranteed reward rate per tonne of CO2e avoided for the five-year period 2028-2032.

An example calculation in the document illustrates how a ship using 1,000 mt of a ZNZ marine fuel could avoid 1,561 mt of CO2e emissions and, at a reward rate of $100 per tonne avoided on a well-to-wake basis, receive $156,100.

But the co-sponsors stress that the reward rate should be even higher to close the price gap between conventional marine fuels and low-carbon marine fuels.