Ramped-Up Pressure on Maritime Sector to Adopt Biofuels as Regulatory Noose Tightens

The maritime industry recognizes the urgency for radical change in their fuel consumption habits, in response to impinging environmental legislation and the overall global motion towards sustainability. Various players, including yacht owners, builders, management companies, and captains are exploring alternatives that could displace fossil fuels, but the task isn’t straightforward. It presents a complicated blend of economic, technological, and regulatory challenges that need surmounting.

What’s surfaced from the labyrinth of options is biofuel, more specifically Hydrotreated Vegetable Oil (HVO), as a reliable means to achieve a drastic reduction in greenhouse gas (GHG) emissions and other marine pollutants, such as particulate matter (PM) and sulphur oxides (SOx). Fatty Acid Methyl Ester (FAME), another biofuel variant, is blended with traditional marine fossil fuels. In comparison, HVO provides superior storage stability, but with a prohibitive higher cost that curtails its broader adoption.

The International Maritime Organization (IMO) has sketched ambitious interim targets aiming for a 20 to 30 percent cut in emissions by 2030 and 70 to 80 percent by 2040, compared to 2008 levels. It has put the maritime sector on notice to reach net zero emissions about 2050. For the first time, yachts were acknowledged in the IMO’s greenhouse gas study, indicating that the luxury yacht market can no longer insulate itself from these global environmental directives.

Despite the steadily increasing demand for marine biofuels —jumping from negligible usage in 2020 to more than 1 million tonnes in 2023 at major fueling stations— it accounts for merely 1.7 percent of total fuel sales. This lackluster adoption could be due to competition for feedstock from aviation and road transport sectors, leading to constrained supply and elevated prices. Carbon pricing could potentially narrow this cost gap and make HVO more commercially attractive for yacht usage, but this is currently conjecture.

Positive momentum is perceptible, however, as shipbuilding companies now deliver new vessels with HVO specified. Management companies are also lending support by incorporating biofuels into their operations. Both yacht owners and captains increasingly view biofuels as the most viable short-term alternative to fossil fuels while they await the maturation of future energy solutions. Selecting only certified fuels that ensure a minimum of 65 percent emissions reduction compared to marine