Market fragmentation is slowing down the production and uptake of renewable fuels in the maritime sector. Turning the tide will require clearer signals from potential fuel buyers and sellers to develop the new supply chains that will enable shipping’s decarbonization journey.

There is a persisting disconnect between producers of renewable fuels and potential buyers in the maritime sector. Some volumes of renewable LNG and sustainable biofuels are available in the US market and shipping has an appetite for those fuels, however, there is currently no coordinated structure or process for the maritime sector to access them on any meaningful scale.  The inability of ocean-going vessels to qualify under the US Renewable Fuels Standard (RFS) is also a formidable barrier to biofuels access. 

Even in California, which is driving the development of low-carbon fuel standards in the US and beyond, the infrastructure still simply doesn’t exist yet to transport these fuels to ports where they can be bunkered onboard ships. As a result, the maritime industry is mainly using these products for offsetting the use of traditional marine fuels, with the renewable fuels being consumed in other industries. Marine players then benefit from emissions reductions in the form of…