The International Maritime Organization’s 2028 regulations will require ships to adopt significant biofuel blends to meet new carbon intensity targets and avoid substantial penalties.​

The article titled “IMO 2028: How Much Biofuel Will Be Needed to Avoid Penalties?” published by Ship & Bunker on April 23, 2025, provides an in-depth analysis of the International Maritime Organization’s (IMO) forthcoming greenhouse gas (GHG) policy framework set to take effect in 2028. This framework is anticipated to influence biofuel demand within the maritime industry significantly.​

Key Highlights:

• Biofuel Usage Requirements: To comply with the IMO’s 2028 GHG regulations and avoid penalties, ships must incorporate between 17.6% and 23.3% biofuel (B100) into their fuel mix, depending on the carbon intensity of the biofuel used. This requirement will increase to 49.2% and 65.1% by 2035 as the regulations become more stringent.​

• Carbon Intensity Targets: The IMO framework introduces two primary benchmarks: the Direct Compliance Target (DCT) and the Base Target (BT). Fuels emitting below the DCT can generate surplus units, which are tradable or bankable for up to two years. Emissions between the DCT and BT incur a penalty of $100 per metric ton of CO₂ equivalent (mtCO₂e). In contrast, emissions exceeding the BT face a higher penalty of $380/mtCO₂e or necessitate the acquisition of surplus units from other vessels.​

• Assumptions for Analysis:

  • Biofuels: Two types of B100 biofuels are considered:

    • Low-GHG biofuel with emissions of 14.1 gCO₂/MJ.
    • High-GHG biofuel with emissions of 32.9 gCO₂/MJ.
    • Both have an energy density of 37.5 MJ/kg.

• VLSFO: Assumed to have a carbon intensity of 91 gCO₂/MJ and an energy density of 42.7 MJ/kg.

• Pricing: For this analysis, the prices are held constant from 2028 to 2035:

  • VLSFO: $526.50 per metric ton.
  • B100 biofuel: $1,200 per metric ton.

• Biofuel Requirements Over Time: The proportion of biofuel required in the fuel mix increases over the years to meet the IMO’s tightening regulations. For instance, by 2035, a ship might need to consume up to 2.3 metric tons of B100 biofuel for every metric ton of VLSFO to avoid penalties.​

• Cost Analysis:

  • Using VLSFO exclusively will result in penalty payments under the IMO regulations.
  • Incorporating the specified percentages of B100 biofuel can eliminate these penalties but will increase fuel costs.
  • At current prices, using low-GHG B100 biofuel becomes more cost-effective than paying penalties from 2033 onwards. In contrast, high-GHG B100 biofuel remains more expensive than the penalties throughout the analyzed period.​

This analysis underscores the financial and regulatory implications of the IMO’s 2028 GHG framework, highlighting the increasing importance of biofuels in maritime fuel strategies.​

For more details, please follow this link to the Ship & Bunker article » GO.