Advanced Green Fuels for Maritime Application-Road Map for India (Part A)

In April 2025, during the 83rd meeting of the Marine Environment Protection Committee (MEPC 83), the IMO introduced a Net-Zero Framework setting mandatory GHG Fuel Intensity (GFI) targets for all global ships above 5,000 GT. The GFI of a fuel sets a threshold on annual well-to-wake GHG emissions per unit of energy used (gCO₂eq/MJ). This metric is critical for accurately assessing the true environmental benefits and climate performance of alternative marine fuels.

Under this framework, ships that exceed emission targets earn Surplus Units (SUs), which can be traded, saved, or cancelled. Conversely, Tier-1 (Direct Compliance) shortfalls require the purchase of Remedial Units (RUs) at $100/tCO₂ while Tier-2 (Base Compliance) shortfalls must either pay $380/tCO₂ or utilize SUs. Notably, the use of Zero or Near-Zero (ZNZ) fuels—defined as having a GFI below 19 g CO₂e/MJ before 2035 and 14 g CO₂e/MJ after 2035—now qualifies for financial rewards from the IMO Net-Zero Fund. These thresholds and compensation amounts will be reviewed every five years.

This report provides a comprehensive overview of alternative fuel adoption trends, based on an analysis of over 120,000 vessels from the Clarkson’s Research database. The study develops a sustainability ranking for low-carbon and ZNZ fuels in the Indian context, evaluated against eight parameters:

• Well-to-Wake (WtW) GFI
• LCA-based GHG reduction potential
• Fuel supply readiness
• Storage and bunkering infrastructure
• Global port readiness
• Engine and fuel cell ecosystems
• Fuel costs (with and without proposed GHG taxes)
• Policy and regulatory gaps.

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The report estimates the ZNZ fuel demand-supply gap for India through 2035 and quantifies the green hydrogen and renewable energy capacity required for production. To align with GFI trajectories, significant investment is needed to scale fuel production and manufacture ZNZ-capable vessels. While universal definitions and reward distributions are still being finalized by the IMO, this study outlines short-medium-and long-term strategies to generate SUs and secure financial rewards. Finally, the role of alternative fuel engines, Onboard Carbon Capture (OCC), and fuel cell integration is critically assessed to guide the Indian maritime sector toward long-term decarbonization.