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Business Standard
31-05-2025
- Business
- Business Standard
India to revamp maritime rules for emission goals; shipping costs to rise
The Indian government is drafting new rules to align the maritime sector with the International Maritime Organisation's (IMO) upcoming emission regulations, Mint reported on Saturday. The move is part of a broader effort to support India's maritime development and green transition goals. The proposed rules will influence the design, construction, and operational costs of ships, as well as the structural planning for new mega ports and shipyards. Developed under the IMO's Revised GHG Strategy 2023, these standards will introduce new fuel norms for ships and a global carbon pricing mechanism. 'These regulations will also define parameters for building green fuel filling stations at ports, and training programmes for the workforce involved in related activities,' a source told Mint. New ships built at Indian shipyards will either need dual-fuel capabilities or be entirely designed to run on green fuels such as compressed natural gas, liquefied natural gas, methanol, ammonia, green hydrogen, or electricity. Currently, diesel is the primary fuel for vessels operating on inland waterways, select coastal routes, and international voyages. Phased emission reductions The new rules will feature a phased plan for carbon dioxide (CO2) emissions reduction and a timeline for green upgrades at ports. Shipowners will be required to engage classification societies for early compliance assessments. The Directorate General of Shipping (DGS), under the Ministry of Ports, Shipping and Waterways, has already issued a guidance note outlining the IMO's Net Zero Framework and Greenhouse Gas Fuel Intensity (GFI)-based compliance requirements. The advisory aims to help stakeholders familiarise themselves with the regulations and plan for their implementation. The IMO's action plan targets net-zero emissions from international shipping by 2050 through a mix of technical fuel standards and market-based pricing mechanisms. The GFI-based system will formally take effect in March 2027 and become operational in 2028. It requires a gradual reduction in the carbon intensity of fuels used by ships over 5,000 gross tonnes (GT) engaged in international trade. This applies to all ships flagged under MARPOL, the main international convention for preventing marine pollution. Economic and strategic impact According to Mint, the new regulations are expected to have far-reaching operational, economic, and strategic implications for shipowners, ports, training institutes, classification societies, and fuel suppliers. The DGS estimates that India's compliance cost could be $87–100 million annually by 2030, translating to a 14 per cent increase in fuel costs and a 5 per cent hike in freight rates. However, India could also see strategic benefits, as it aims to produce 5 million tonnes of green hydrogen by 2030, which would enable the production of 28 million tonnes of ammonia and 26.3 million tonnes of methanol — both qualifying for compliance credits under the IMO's GFI system. Implementation strategy The DGS has advised all stakeholders — shipowners, port authorities, fuel suppliers, and training institutions — to review the guidance note and begin preparations, including fuel intensity monitoring, workforce training, and green infrastructure planning. Although only 14 per cent of India's registered fleet currently qualifies for IMO compliance, domestic shipyards are already exploring retrofitting and green ship designs to capture new market opportunities. Exporters relying on foreign ships may face higher freight costs if those vessels fail to meet GHG compliance, making it essential to factor these regulations into chartering decisions.
Mint
31-05-2025
- Business
- Mint
India to notify new rules to meet IMO's zero emission regulations; to get ports and shipping green compliant
The Union government is planning new rules for ships and ports to meet the forthcoming International Maritime Organisation (IMO) emission regulations, according to two persons aware of the matter. This move will have a significant bearing on the country's ambitious maritime development agenda. The new regulations will have an impact on design, construction and operation costs of ships; along with structural design of existing and new mega ports and shipyards. It will also include new fuel standards for ships and a global pricing mechanism for emissions. The rules will specify norms for putting up green fuel filling stations at ports including programmes for training of manpower in related activities, the two persons in the know said. The rules will also suggest design parameters for new ships being built at Indian shipyards so that they have dual fuel options for ships or design ships that are completely built to use green fuel such as compressed natural gas/liquefied natural gas, methanol, ammonia, green hydrogen and even electricity. Currently, diesel is the primary fuel for vessels, ferries and tugboats plying on inland waterways, certain coastal routes and on international routes. The rules will also have provisions for phased reduction in carbon dioxide (CO2) emission, and a time-bound plan for green upgrade of ports; with mandatory engagement of classification societies for earlier compliance assessment. 'The directorate general of shipping (DGS) under ministry of ports, shipping and waterways has already issued guidance note on IMO's Net Zero Framework and Greenhouse Gas Fuel Intensity (GFI)-based compliance measures to enable stakeholders across across the Indian maritime ecosystem to understand, prepare for, and comply with the forthcoming regulatory requirements under the IMO's Revised GHG Strategy 2023,' said the first person quoted above. 'The Guidance Note shall serve as an initial orientation document until formal rules and national-level implementation guidance including operational guidelines, compliance templates, and capacity-building frameworks are notified by the directorate in line with forthcoming IMO decisions,' he added. The new IMO regulations for the shipping industry aims to achieve net-zero emissions from international shipping by or around 2050, subject to national circumstances through mid-term measures comprising a technical Global Fuel Standard (GFS) and a market-based GHG (green house gas) pricing mechanism. The GFI-based mechanism, expected to formally come into force in March 2027 and effectively from 2028, mandates aprogressive reduction in the lifecycle carbon intensity of fuels used by ships above 5,000 GT engaged in international voyages. The mechanism is applicable to all ships flying the flag of a party to MARPOL (International Convention for the Prevention of Pollution from Ships). MARPOL is the primary international convention, developed by the IMO, aimed at preventing marine pollution from ships. 'The IMO regulations will have significant operational, economic, and strategic implications for shipowners, ports, training institutes, classification societies, and fuel suppliers. The new regulations will prepare the industry to comply with International obligations while also establishing national-level policies on green shipping,' said the second person quoted above. According to the Directorate General of Shipping, the total compliance cost for India is projected at $87-100 million annually by 2030, assuming partial reliance on remedial units. This is equivalent to a 14% increase in fuel cost and 5% increase in freight rates—well within industry operating margins. But, India may also benefit from IMO regulations, given its target of producing 5 million tonnes (MT) of green hydrogen by 2030. This enables production of 28 MT of ammonia and 26.3 MT of methanol, which qualify under the IMO's GFI reward system. Green fuels with lower lifecycle emissions earn compliance credits and shipping rewards, boosting India's export potential and investment in clean bunkering infrastructure. Query mailed to the ministry of ports , shipping and waterways (MoPSW) remained unanswered till press time. The country is already taking big strides towards greening its maritime structure, which includes the development of green hydrogen hubs and the initiation of alternate fuel programmes at ports. 'Kandla and Tuticorin ports are set to become the country's first green hydrogen and green ammonia refuelling hubs for green shipping,' said Rajiv Jalota, former chairperson of Mumbai Port Authority and advisor at Indian Ports Authority. The government has also initiated a green tug programme under which harbour tugs powered by cleaner and more sustainable fuels would be used at all major ports. 'Moreover, Harit Sagar, green port guidelines have been issued by the shipping ministry that targets reduction of carbon emissions at major ports through focused implementation and close monitoring of green initiatives. Ports are being encouraged to plan infrastructure for green bunkering and digital inspection protocols to streamline compliance verification. These should allow India to comply with any global regulations without having any adverse impact on the industry,' he added. The main issue with the proposed IMO regulation on net zero emissions is the distribution of money collected by the organisation by levying penalties on ships that are non-compliant with emission standards, he said. 'While discussions are still on how to distribute funds accumulated by IMO to countries such as India to help its industry get technology and fuel required to reduce emissions by the industry,' Jalota said. To facilitate the Indian shipping sector in smoothly embracing the 2027 IMO regulations, there is a need for a concerted, multi-stakeholder approach, said Pushpank Kaushik, CEO & head of Business Development at Jassper Shipping, a Hyderabad-based global shipping and logistics firm. The government needs to offer transparent regulatory road maps complemented by green finance interventions, tax breaks, and retrofitting incentives. 'Refurbishment of domestic shipyards is vital, and their inclusion in the Harmonized Master List of Infrastructure Sub-sectors is a welcome and opportune step,' Kaushik added. As significant is building capacity, Indian seafarers and technical staff need to be equipped to deal with new propulsion technologies and alternative fuels. Use of digital fleet management systems to track emissions and optimize operational efficiency will also be critical. 'India will also have to partner with global maritime organizations and utilize tools such as the IMO Net-Zero Fund to fund green infrastructure and training of the workforce,' he added. With sound policies, collaborations, and investments, regulatory compliance can be a dynamic driver of maritime innovation and world leadership, he said. According to the DGS, all stakeholders—including Indian shipowners, managers, port authorities, fuel suppliers, classification societies, and training institutions have been advised to review the Guidance Note issued by it in detail and initiate necessary preparatory measures. This includes monitoring ship-level fuel intensity data; reviewing procurement strategies for low-GHG fuels; enhancing technical training on GFI methodologies; planning green infrastructure upgrades at ports and engaging with classification societies for early compliance assessment. The immediate impact of IMO regulations would be limited on the Indian Maritime segment, given that out of India's current fleet (Indian flagged) strength of 1,524 registered vessels; only 212 ships (14%) qualify as foreign-going and are of above 5,000 gross tonnage (GT). Also, of these, only 135 ships are regularly engaged in overseas trade and would be subject to IMO compliance. While the global shipbuilding market is dominated by China, South Korea and Japan; India currently has 28 shipyards. But, Indian yards are already exploring retrofitting solutions and green ship designs. The regulation incentivizes demand for dual-fuel ships, alternative propulsion, and emission monitoring systems-creating new opportunities for domestic innovation and international competitiveness. Also, exporters chartering foreign ships will indirectly bear additional freight costs if vessels are non-compliant. Indian exporters are encouraged to factor GHG compliance in chartering decisions to minimise long-term freight inflation risks, the first person said.
The Hindu
13-05-2025
- Business
- The Hindu
How is the shipping industry tackling emissions?
The story so far: After a decade of deliberations towards decarbonising the maritime industry, at its 83rd session, the Marine Environment Protection Committee (MEPC-83) of the International Maritime Organization (IMO) was faced with the challenge of coming to a consensus on a proposed emissions levy on global shipping. The session's objective was to adopt a Market-Based Measure (MBM) that balanced environmental effectiveness with economic fairness. What were the proposals? Five distinct proposals were tabled in the meeting. The first was by the International Chamber of Shipping which advocated for a fixed levy per every tonne of CO₂ emitted. Secondly, China proposed a market-driven approach where ships could trade compliance units and invest in alternative fuels. The European Union suggested a fixed Greenhouse Gas (GHG) levy, managed by an IMO-administered fund while India propositioned a 'bridging mechanism', which would target only under-compliant ships to bear the financial burden, while rewarding those using Zero or Near-Zero (ZNZ) fuels. Finally, Singapore also joined the fray by proposing an enhanced version of India's model, involving a GHG Fuel Standard (GFS) and a tiered system rewarding surplus emission units and requiring the purchase of remedial units for underperformance. Even before the debate on MBMs could fully unfold in the IMO, geopolitical tensions took centre-stage. The U.S. Trump administration, which had already withdrawn from the Paris Agreement and stripped the agency that responds to disasters from their climate work related responsibilities, did not participate in the IMO deliberations. It warned of 'reciprocal measures' if the EU-backed uniform carbon levy were passed. What was decided? The MPEC-83 of IMO voted 63 to 16 in favour of accepting Singapore's hybrid model based on India's proposal as the IMO's Net Zero Framework, making international shipping the first global industry to adopt a mandatory emissions levy framework. Having piloted a compromise formula amidst extremely divergent views, both India and Singapore have claimed credit for the successful outcome. However, the decision of the MEPC-83 is not final yet. Despite the vote, the path to implementation is far from straightforward. The MEPC-83's decision, having approved the Net Zero Framework, now needs to amend Annex VI of the MARPOL convention, which governs air pollution from ships. The amendment will undergo a six-month circulation period among all contracting parties to MARPOL. For final adoption, it requires a two-thirds majority of votes from members present and voting; this means that if all 101 parties participate, at least 67 must support the measure. Even if adopted, the amendment could still be blocked, should one-third of the parties — provided they account for at least 50% of global shipping tonnage — formally object in writing. Currently, with 63 votes in favour, 16 against, and 22 abstentions, the outcome remains uncertain. The process ahead is critical and could reshape the dynamics of global shipping regulation for decades to come. What other interests were at play? The wide range of positions expressed during the MEPC-83 underscores the enduring dominance of national interests in global climate diplomacy. Oil-exporting countries, led by Saudi Arabia, opposed any significant transition to green fuels, prioritising the protection of their fossil fuel markets. In contrast, small island nations and least developed countries advocated for steep carbon levies, seeking to redirect revenues into broader green development initiatives. Moreover, China, along with other large shipping nations, pushed for minimal levies to preserve competitiveness while focusing on investments in cleaner fuels. Norway and other Scandinavian countries have been seeking recognition for their early and costly efforts in decarbonising shipping, proposing that these efforts be rewarded through surplus credit systems. Brazil has been advocating for a rapid shift to methanol as a primary marine fuel, while several nations, citing a lack of viable green technologies, hoped for delayed implementation. Even after voting, scepticism has lingered among shipowners in traditional maritime powerhouses like Greece, who question the necessity and feasibility of a green levy altogether. The range of these responses illustrates the immense challenge the IMO faces in crafting a universally acceptable emissions framework. Why does green shipping matter? Shipping may seem invisible to most consumers, but it plays an outsized role in global emissions. The sector emits approximately one billion metric tonnes of GHG each year, representing about 2.8% of total global emissions. If ranked as a country, international shipping would be the sixth-largest emitter in the world, between Germany and Japan. Projections indicate that, without corrective action, emissions from shipping could rise by as much as 50 to 250% by 2050. Even though the sector contributes less than road transport emissions, they face heavier regulatory pressure because of their international nature. Therefore, to align with the 13th UN Sustainable Development Goal as well as the Paris Agreement, the IMO began implementing emissions-reduction measures in 2011, followed by the Initial GHG Strategy in 2018 and the updated IMO GHG Strategy in 2023. It has also included a technical measure such as the Energy Efficiency Design Index in Annex VI of the MARPOL convention; an operational measure, the Ship Energy Efficiency Management Plan, for reduction of GHG emissions from ships; and introduced mandatory recording and reporting of fuel oil consumption. Consistent with the 'Paris agreement temperature goals' it has also adopted 'levels of ambition' and 'guiding principles'. Between 2018 and 2023, it has agreed to fix a target for reducing carbon intensity (CO2 emissions per transport work) by at least 40% by 2030 compared to 2008 levels, and by 70% by 2040, ultimately achieving net-zero by 2050. This is notably more concrete than the International Civil Aviation Organization, which has only pledged a 'long-term aspirational goal' of net-zero emissions by 2050 without setting interim targets. Is it an equitable distribution? There has been a gradual erosion of the guiding principle of 'common but differentiated responsibilities and respective capabilities' (CBDR-RC) incorporated in the 2018 initial GHG strategy. The CBDR-RC is a core principle enshrined in climate agreements like UNFCCC, Kyoto Protocol and the Paris Agreement. It acknowledges that all nations must address climate change but recognise historical responsibility and unequal capacities. Developed nations, with their longer industrial histories, are expected to bear greater burdens. However, recent IMO proceedings reflect an effort by wealthier nations to shift responsibility onto developing economies, despite stark differences in income and consumption. How does India benefit? While the carbon levy and GHG targets set by the IMO may pose short-term challenges for certain sectors of the Indian economy, India is likely to emerge as a long-term beneficiary of the new MBM framework. According to the United Nations Conference on Trade and Development, the impact of the MBM on India's maritime logistics costs will be modest in the near term — ranging from 4.98 to 7.29% on imports and 5.92 to 8.09% on exports by 2030. By 2050, these figures are projected to rise to about 33 to 35%. However, the actual impact on trade volumes is expected to be minimal. India currently operates nearly 236 ships over 5,000 gross tonnage, with only 135 involved in international voyages. Since MBMs apply only to international shipping, India's coastal fleet remains unaffected. At present, India spends roughly $400 million per year on fuel for its international fleet. The MBM is projected to increase this by approximately $108 million by 2030 — a manageable rise given the scale of India's maritime economy. Perhaps the most exciting implication of the MBM framework is the potential for India to become a global hub for clean energy exports. As the world's third-largest importer of fossil fuels, India is now investing heavily in green hydrogen through its National Hydrogen Mission. Industrial giants such as Reliance, Adani, and JSW are planning to scale up production, while three Indian ports are preparing to offer green hydrogen bunkering services. Under the mission's guidelines, Indian green hydrogen must meet a well-to-wake greenhouse gas fuel intensity of no more than 2 kg CO₂e per kilogram of hydrogen, translating to about 16.7 grams of CO₂ equivalent per megajoule. This standard positions Indian hydrogen well within the IMO's reward thresholds, which are capped at 19.0 g CO₂e/MJ until 2034 and 14.0 g CO₂e/MJ thereafter. This alignment creates a significant opportunity for India to export green fuels globally and capitalise on international incentives. Global shipping now stands at a transformative moment. Despite persistent disagreements and uncertain implementation pathways, the adoption of a MBM by the IMO represents a milestone in the journey toward decarbonisation. If successful, this framework could make shipping the first truly global sector to operate under binding climate goals, setting a powerful precedent for others to follow. Amitabh Kumar, a retired IRS officer, is former Director General of Shipping, Government of India. Views expressed are personal.
Zawya
30-04-2025
- Business
- Zawya
Oman gearing up for energy transition and maritime sector decarbonisation
MUSCAT: The Sultanate of Oman is positioning itself as a key player in the global energy transition, as well as the decarbonisation of the maritime sector, according to a senior official. Speaking during the first edition of the Oman Maritime, Ports and Energy Forum held here on Tuesday, April 29, 2025, Muhanna Moosa Baqer, Director General of Ports and Marine Affairs at the Ministry of Transport, Communication and Information Technology, said: 'The world is on the cusp of a profound energy revolution, and Oman is intent on realizing its potential to catalyze the changes required.' According to Baqer, the maritime logistics sector plays a dual role in both facilitating and driving the energy transition. 'Shipping and ports are both the drivers and facilitators of the energy transition across the globe. Shipping will increasingly transport cargo such as LNG, hydrogen, ammonia, and CO2 to all corners of the world, and the industry is a lynchpin in the development of this new and exciting global supply chain infrastructure,' he said. In addition to transporting new energy resources, the sector will also become a consumer of alternative low and zero carbon marine fuels, said Baqer. 'As well as transporting new energy sources, shipping will be consumers of this energy, using alternative low and zero-carbon marine fuels to propel the global merchant fleet. Additionally, he shared that ports will become vital energy hubs and 'gateways for the import, export, and storage of low-carbon and renewable energy', while also supporting a developing bunkering sector for alternative marine fuels. This evolving role of the maritime sector comes amid increasing global pressure to decarbonise the sector. 'Shipping and ports have a huge responsibility for the successful delivery of decarbonization on a national and global basis. To facilitate this, we are seeing the introduction of a raft of national, regional, and global environmental regulations, which together set out ambitious targets for the decarbonization of shipping and ports, which will also accelerate the pace of the energy transition.' A major example, according to Baqer, is the International Maritime Organization's proposed Net Zero Framework, which aims to set mandatory emissions limits and introduce carbon pricing across the shipping sector. 'If adopted, they would enter into force in 2027, and the IMO's Net Zero Framework will be the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector. So, the world is on the cusp of a profound energy revolution, and Oman is intent on realizing its potential to catalyze the changes required.' Consequently, Oman's port and maritime sectors are actively evolving to meet future demands, he said. 'The country's maritime and port sectors are focused on developing cutting-edge logistics excellence in tandem with meeting the requirements of environmental sustainability and stewardship.' Additionally, he shed light on the intersecting role Oman plays in both maritime trade and the energy transition. 'Oman also has a leading and proactive role to play as a key producer of renewable energy. A very recent example of this is the agreement to establish the world's first liquid hydrogen import corridor, which will connect the Port of Duqm, the Port of Amsterdam, and key logistics hubs in Germany.' Concluding his remarks, Baqer noted that the Oman's maritime sector is ready for the change. 'Oman's maritime, boats, and bunkering sectors are building on their heritage and preparing to catalyze the change.'
Observer
29-04-2025
- Business
- Observer
Oman gearing up for energy transition and maritime sector decarbonisation
MUSCAT: The Sultanate of Oman is positioning itself as a key player in the global energy transition, as well as the decarbonisation of the maritime sector, according to a senior official. Speaking during the first edition of the Oman Maritime, Ports and Energy Forum held here on Tuesday, April 29, 2025, Muhanna Moosa Baqer, Director General of Ports and Marine Affairs at the Ministry of Transport, Communication and Information Technology, said: 'The world is on the cusp of a profound energy revolution, and Oman is intent on realizing its potential to catalyze the changes required.' According to Baqer, the maritime logistics sector plays a dual role in both facilitating and driving the energy transition. 'Shipping and ports are both the drivers and facilitators of the energy transition across the globe. Shipping will increasingly transport cargo such as LNG, hydrogen, ammonia, and CO2 to all corners of the world, and the industry is a lynchpin in the development of this new and exciting global supply chain infrastructure,' he said. In addition to transporting new energy resources, the sector will also become a consumer of alternative low and zero carbon marine fuels, said Baqer. 'As well as transporting new energy sources, shipping will be consumers of this energy, using alternative low and zero-carbon marine fuels to propel the global merchant fleet. Additionally, he shared that ports will become vital energy hubs and 'gateways for the import, export, and storage of low-carbon and renewable energy', while also supporting a developing bunkering sector for alternative marine fuels. This evolving role of the maritime sector comes amid increasing global pressure to decarbonise the sector. 'Shipping and ports have a huge responsibility for the successful delivery of decarbonization on a national and global basis. To facilitate this, we are seeing the introduction of a raft of national, regional, and global environmental regulations, which together set out ambitious targets for the decarbonization of shipping and ports, which will also accelerate the pace of the energy transition.' A major example, according to Baqer, is the International Maritime Organization's proposed Net Zero Framework, which aims to set mandatory emissions limits and introduce carbon pricing across the shipping sector. 'If adopted, they would enter into force in 2027, and the IMO's Net Zero Framework will be the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector. So, the world is on the cusp of a profound energy revolution, and Oman is intent on realizing its potential to catalyze the changes required.' Consequently, Oman's port and maritime sectors are actively evolving to meet future demands, he said. 'The country's maritime and port sectors are focused on developing cutting-edge logistics excellence in tandem with meeting the requirements of environmental sustainability and stewardship.' Additionally, he shed light on the intersecting role Oman plays in both maritime trade and the energy transition. 'Oman also has a leading and proactive role to play as a key producer of renewable energy. A very recent example of this is the agreement to establish the world's first liquid hydrogen import corridor, which will connect the Port of Duqm, the Port of Amsterdam, and key logistics hubs in Germany.' Concluding his remarks, Baqer noted that the Oman's maritime sector is ready for the change. 'Oman's maritime, boats, and bunkering sectors are building on their heritage and preparing to catalyze the change.'
