The International Maritime Organization (IMO) has established a policy framework for 2028–2035 to reduce greenhouse gas emissions in shipping by setting carbon intensity targets for marine fuels.
To avoid penalties, shipowners will need to increase biofuel usage significantly. According to an analysis by Ship & Bunker, the share of B100 biofuel in fuel blends may range from 17.6% to 23.3% in 2028 and from 49.2% to 65.1% in 2035, depending on the biofuel type.
The analysis evaluates two B100 biofuel types: one with a carbon intensity of 14.1 gCO2/MJ and another with 32.9 gCO2/MJ, both with an energy density of 37.5 MJ/kg.
In comparison, very low sulfur fuel oil (VLSFO) has a carbon intensity of 91 gCO2/MJ and an energy density of 42.7 MJ/kg.
The required B100 percentages assume VLSFO constitutes the remaining fuel blend.
Penalties for exceeding carbon intensity targets are set at $100 per metric ton of CO2 equivalent (mtCO2e) for emissions between the decarbonization target (DCT) and baseline target (BT), and $380/mtCO2e for emissions above BT.
Ships with emissions below DCT can generate surplus compliance units, which may be banked or sold. Cost comparisons assume VLSFO at $526.50 per metric ton and B100 at $1200 per metric ton, with prices held constant for 2028–2035.
Using either biofuel type to meet BT is cheaper than paying penalties in all years. For the stricter BT+DCT target, low-carbon biofuel (14.1 gCO2/MJ) becomes cheaper than penalties from 2033, while higher-carbon biofuel (32.9 gCO2/MJ) remains more expensive than penalties.
Up to 2.3 metric tons of low-carbon B100 may be needed per ton of VLSFO in 2035 due to energy density differences.