IMO climate rules challenge LNG fuel assumptions

Sustainable fuels certification, defining ’underway’ and factors affecting compliance credit trading

IMO will also require all fuel emissions to be certified under a Sustainable Fuels Certification Scheme, with emissions values recorded on a Fuel Lifecycle Label accompanying the Bunker Delivery Note.

While LNG is likely to be included, variability in source gas production and liquefaction methods could result in large swings in GFI outcomes.

Certification standards will be published by March 2027.

One of the less-discussed but highly impactful developments for LNG carriers concerns the amended definition of ’underway’ used in fuel consumption calculations. The new definition aligns with the start and end of sea passage rather than broader interpretations previously in use.

As LNG carriers often spend extended time at anchor or conducting cargo operations with propulsion on standby, this change could affect their fuel efficiency ratings unless clearly defined operational modes are agreed with flag administrations.

The Net-Zero Framework also introduces the GFI Registry and an IMO Net-Zero Fund, a quasi-financial institution to manage greenhouse gas pricing contributions. Surplus units from compliant ships can be transferred or banked, introducing compliance trading into IMO regulation for the first time.

LNG carriers operating above the Direct Compliance threshold may need to procure surplus units or pay into the Fund directly.

However, the scope of inter-fleet transfers and monetisation remains unclear pending development of 14 technical guidelines between now and 2027.

These developments come alongside ongoing revisions to the Energy Efficiency Existing Ship Index (EEXI) and Carbon Intensity Indicator (CII), both of which directly affect LNG carriers.

MEPC 83 confirmed an annual CII reduction factor of 2.6% through to 2030. From 2026, a second phase will review challenges and metrics, potentially introducing further refinements affecting LNG shipping’s compliance trajectory.

Ballast water and NOx amendments also have indirect relevance.

LNG carriers often operate globally and must meet complex emissions requirements across regions.

MEPC 83’s decision to designate the North-East Atlantic as an Emission Control Area for NOx, SOx and particulate matter introduces further compliance burdens, especially for vessels with older dual-fuel engines. From 2027, new LNG carriers contracted or delivered must meet NOx Tier III standards in this area.

One area of minor relief was the approval of an interim circular allowing bunker ships certified under Marpol Annex I to carry biofuel blends up to 30%.

While not directly applicable to LNG bunkering, it signals openness to flexible arrangements that may be extended to other fuel carriers in future.

Despite the complexity, MEPC 83 maintained the political momentum seen since the adoption of the 2023 IMO Greenhouse Gas Strategy. The session was characterised by urgency. Observers noted an atmosphere of necessary compromise, shaped by the geopolitical uncertainty following President Trump’s imposition of trade tariffs.

To paraphrase a comment one delegate made to Riviera: the feeling was that deals had to be made – if not now, then who knows what might happen next.

As MEPC 83 concluded, industry observers reflected on the pace and direction of regulatory change.

LNG shipping, once considered a transitional compliance hedge, now faces a more uncertain future. LNG as a marine fuel may still play a role, but its status as a low-emissions solution is no longer assured under IMO’s evolving metrics.

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