Core Viewpoint - The cost of oil-based marine fuels is expected to double over the next decade due to new greenhouse gas emission regulations from the International Maritime Organization (IMO), significantly altering the shipping fuel market dynamics [2][3]. Regulatory Changes - The IMO has established greenhouse gas intensity threshold standards for ships from 2028 to 2035, imposing financial penalties on shipowners who fail to initiate low-carbon transitions. Shipowners using heavy fuel oil will see their operating costs double by 2035 [3]. - Under the new regulations, shipowners emitting above a lower threshold but below a higher threshold will pay an additional fee of $100 per ton of CO2 equivalent, while those exceeding the higher threshold will pay $380 per ton. Shipowners using low-carbon fuels can generate carbon credits to sell to those exceeding the higher threshold [3]. Market Impact - The implementation of these regulations is expected to create a fair competitive environment between fossil fuels and green fuels, potentially leading to a surge in demand for biofuels in the short term [3]. - Current data shows that 99% of global ships are traditional power vessels, but this percentage is expected to decline as more vessels using alternative fuels enter operation [4]. Future Fuel Consumption Trends - By 2050, the share of oil and liquefied natural gas in global marine fuel consumption is projected to drop to 56%, down from the current 98% [4]. Transition Pathways - The IMO aims to tighten greenhouse gas standards further from 2035, with a long-term goal of achieving net-zero emissions in the shipping industry by 2050. Various new fuel options, including biodiesel, bio-LNG, bio-methanol, and renewable ammonia, are expected to become widely available in the 2030s [5]. - Shipowners are encouraged to invest in multi-fuel compatible power systems now to avoid asset idling due to fuel transitions, given the long lifespan of ships [5]. Technological Developments - The Wärtsilä Group is actively developing various ship propulsion systems to meet the evolving fuel system requirements, increasing its R&D expenditure to €296 million in 2024, which is 4.6% of net sales [6]. - The company has been a pioneer in developing LNG, LPG, and methanol propulsion systems, with the first ammonia-fueled ship expected to be operational by 2026 [6]. Carbon Capture Initiatives - Despite the anticipated rise in low-carbon fuel usage, oil and gas will still hold a significant share in marine fuels. Shipowners can reduce emissions by improving fuel efficiency and installing carbon capture systems [7]. - Wärtsilä has introduced a carbon capture and storage (CCS) system with a 70% capture rate, costing between €50 and €70 per ton, which has already been successfully tested on a vessel [7].