Despite high fuel prices caused by conflict in the Middle East, interest in alternative fuels has faded. The decisive blow comes from the United States, which has rejected any replacement for the IMO’s Net-Zero Framework (NZF) that includes carbon taxes, funds, or penalties, and has even demanded the removal of existing schemes like the EU ETS. The US also insists on explicit acceptance of any new IMO rules.
Argentina, Panama, and Liberia have proposed a new regulatory framework that bases eligibility on fuel price and availability, not emissions intensity. Only fuel oil and LNG currently qualify.
Across tankers, dry bulk, and containerships, the data shows a clear pattern:
- Fuel oil still dominates newbuilding orders.
- LNG has momentum only in containers, where it accounts for over half the orderbook.
- Methanol is growing modestly, especially in containers.
- Ammonia remains negligible across all segments.
Meanwhile, the EU has approved a 90 per cent emissions‑reduction target by 2040, but the document stresses this is a political compromise: up to 10 per cent can be met with carbon credits, and several member states opposed the deal.
Green investment is falling sharply, with a 23 per cent drop in 2025, while defence and AI spending surge. Energy security pressures are undermining Europe’s leverage.
Existing regulations are also under pressure: multiple states want a review of the ETS.
The combination of US obstruction, geopolitical shocks, and European political fatigue is pushing the world toward a fractured regulatory landscape. The report warns that if IMO progress stalls, states will implement their own rules, making future global alignment far harder.