SINGAPORE, Oct 16 (Reuters) – Shippers’ appetite for lower-carbon marine fuels weakened this year as the fate of a regulatory emissions framework from the International Maritime Organization (IMO) remained cloudy while some are using carbon credits, industry executives said.
IMO member nations are set to meet by early November on the formal adoption of a net-zero framework to guide the industry towards zero carbon emissions by 2050, after last year’s vote to delay the move.
Demand for marine biofuel, a more readily available alternative fuel on which shippers have focused more, has softened this year at the world’s largest bunker hub of Singapore.
Marine biofuel sales at the port totalled about 603,000 tons between January and September, down 47% from the corresponding 2025 period, government data showed. Total 2025 volumes had more than doubled from 2024.
“I don’t expect the biofuel demand to increase so much until we have an IMO decision,” said Jens Maul Jorgensen, a director of dry bulk shipowner Oldendorff Carriers.
“If anybody wants to have just a slightly greener world, IMO will have to step up,” he told Reuters.
“What we see now at the moment is a surplus of (carbon) credit to the FuelEU Maritime, and that is competing with biofuel (uptake),” added Jorgensen, speaking on the sidelines of the Singapore International Bunkering conference (SIBCON).
He was referring to an EU regulation that requires ships exceeding gross tonnage of 5,000 tons and calling at EU ports to reduce emissions.
While the FuelEU Maritime regulation has supported biofuels uptake in the European bunker hub of Rotterdam, the demand increase fell short of expectations.
“Some of the tax benefits in Europe have prompted a little more uptake on biofuels, but in general we are a little bit surprised about the lack of demand,” said Peter Grunwaldt, chief executive at Cargill-Hafnia joint venture Seascale Energy.
“Even though biofuels (post-Iran war) are cheaper than gasoil (on some occasions), we are seeing people stick with gasoil. That’s a little bit of a surprise to us, that the demand is not greater,” said Grunwaldt.
Total bio-blended bunker sales at Rotterdam have risen 28% in the year’s first half over the first half of 2025, port data showed.
“We need clear regulatory signals for the industry to work with,” said Jesper Sorensen, global head of alternative fuels at KPI OceanConnect. “Right now, the only regulatory things in place are the emissions trading system and the FuelEU.”
The US-Israeli war with Iran has prompted more shippers to continue diversifying supplies, however.
“Shipowners who have ordered alternative-fuel tonnage and dual-fuel tonnage are building optionality into their fuel mix,” added Sorensen. “The disruption in the Middle East has shown that optionality is a good thing.”
Fossil-based marine fuel prices this week are at least 70% higher than levels before the Iran war began in February.
(Reporting by Jeslyn Lerh and Florence Tan; Editing by Clarence Fernandez)
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