Shipping companies face mounting difficulties in adopting low-carbon fuels due to an uncertain and fragmented regulatory landscape, according to the top marine executive of Finnish technology group Wartsila. The assessment follows the International Maritime Organization’s failure to adopt a global decarbonization framework, as reported by Platts, part of S&P Global Energy.

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The UN agency voted in October 2025 to postpone discussions on the adoption of a Net-Zero Framework by one year, and an increasing number of member states are calling for revisions to achieve consensus. The framework was originally intended to impose a cost on greenhouse gas emissions from ship operations starting in 2028, but the current President of the United States has strongly opposed the carbon pricing element, arguing it could lead to inflation.

Wartsila Marine President Roger Holm commented that shipping companies could struggle financially to transition to sustainable fuels and to incentivize greater production without a carbon pricing mechanism. Low-carbon fuels are more expensive due to limited availability. According to the Platts bunker cost calculator, May’s average delivered bunker prices for very low sulfur fuel oil in Rotterdam were $18.56 per gigajoule, compared with $27.39 per gigajoule for B30 (30% used cooking oil methyl ester and 70% very low sulfur fuel oil) and $35.90 per gigajoule for bio-LNG.

Holm indicated that without a cost on carbon, companies cannot afford to decarbonize and that a way must be found to bridge the gap gradually. The IMO delay has created more uncertainty for shipowners, who do not know when a global regulation will be in place and are increasingly forced to contend with regional regulations. Holm emphasized that predictability is key, but shipowners must live with uncertainty because they do not know exactly when regulation will come into effect.

The European Union has extended its Emissions Trading System to cover shipping since 2024 and introduced FuelEU Maritime rules on marine energy’s greenhouse gas intensity since 2025. The United Kingdom has proposed covering international maritime transportation in its ETS from 2028, with UK domestic maritime emissions to be covered from July 2026. Djibouti and Gabon have started charging ship operators for their emissions, and China, the world’s largest seaborne trading nation, has been exploring maritime decarbonization rules.

Holm expressed hope for a single global regulation, noting that the current path of regional regulations is the worst possible situation for shipowners. Because a ship’s lifespan can exceed 20 years, Holm advised shipowners to seek maximum flexibility in fuel propulsion technologies while improving energy efficiency amid regulatory challenges. For example, a shipowner could choose to build a dual-fuel vessel capable of running on LNG and conventional fuels while preparing it for future conversion to methanol during the newbuild design stage. This flexibility could help when one alternative fuel becomes more available and cheaper as a compliance option.

Holm described flexibility as a relatively cheap insurance for changing fuel during a vessel’s lifetime. Shipowners can also save fuel expenses by adopting energy-saving equipment such as gate rudders or supplementary batteries, which could be financially prudent regardless of fuel choice. Wartsila, one of the world’s largest makers of four-stroke engines used on cruise ships, offshore supply vessels, and other ships in shortsea trades or smaller, has planned to expand its engine production capacity by 35% from the 2025 level by the end of the first quarter of 2028, followed by an additional 30% expansion in the first quarter of 2029. Holm said this expansion is about the company’s capabilities to further accelerate development of engines running on green fuel, adding that while the technology and engines exist, predictability of regulations and availability of green fuels are lacking.

Source: IndexBox Market Intelligence Platform