Daily carbon costs are expected to rise significantly over the next decade
The IMO has introduced new regulations aimed at achieving net-zero emissions for global maritime transport. These rules will have a direct financial impact on older, less efficient ships that are more carbon-intensive.
Under the new agreement, by 2028, all ships over 5,000 GT – including those in the EMF fleet and similar market segments – must use fuel that is at least 17% less carbon-intensive than the current very low sulfur fuel oil (VLSFO) standard. This requirement will increase to 43% by 2035.
Positive Impacts for Modern Fleets
Older ships unable to utilize low-carbon fuels like LNG or ammonia will face significant carbon costs. In contrast, modern and fuel-efficient vessels—such as EMF's VLACs when operating on ammonia—could generate carbon credits, which can either be: 1) Sold to other shipowners, or 2) Retained for up to two years to offset future emissions.
This regulatory change is expected to:
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Enhance the appeal of modern dual-fuel ships
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Speed up the scrapping of aging tonnage
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Decrease supply and promote increased utilization across all segments
Costs could become excessively high
As highlighted by Clarksons: "The rising operational costs with VLSFO could diminish mid-cycle profits for older, less efficient ships, potentially accelerating scrapping activities and boosting demand for new dual-fuel constructions."
EMF's fleet of modern and eco-efficient ships is perfectly positioned to benefit from these regulations—especially our Very Large Ammonia Carriers (VLACs), which can operate with near-zero emissions when using ammonia as fuel.
Source: International Maritime Organization (IMO)