US bunker traders welcome IMO's decision to delay NZF

The International Maritime Organization's decision to delay the adoption of the Net-Zero Framework by a year, largely due to strong opposition from the US and fossil fuel-producing countries, has introduced significant uncertainty into the marine fuel bunkering market, sources said on Oct. 17.

This postponement could slow the transition to cleaner fuels by delaying the introduction of carbon pricing on bunker fuels, which was intended to incentivize greener alternatives.

As a result, shipping companies may hesitate to invest in low-carbon fuel options, keeping demand for conventional, higher-emission fuels stable in the short term, according to immediate market feedback. The delay also complicates pricing and supply dynamics, potentially prolonging reliance on oil-based bunkers and slowing progress toward maritime decarbonization goals, supporters of the framework said.

Some US residual fuel market sources were not looking forward to the IMO regulations, as they would impact supply when the US market is not prepared for such a change.

"No tax benefits here and no regulatory push, so been zero traction here," a US Gulf Coast-based trader said. "Biobunker activity is dead, barely a market - business as usual."

US marine fuel bunker market sources received the news well, as further regulation threatens to increase shipping costs and ship traffic along US coasts.

"Big news," a West Coast-based trader said.

"Green fuels don't have a lot to do in the US," a second USGC-based trader said. "There are zero incentives."

The delay will not significantly impact US bunker prices, as the implementation process would have taken several years. However, companies that were looking into alternative bunker fuels will change their strategy in the short term.

"I don't think it'll have an effect on conventional fuels in the US," the second USGC-based trader added.

"Some companies have already begun looking into it heavily, but I feel this delay will cause it to maybe be pushed back even further or put on the back burner," a third USGC-based trader said.

The delay would impact conventional and alternative bunker fuel prices in the long run, as other modes of transportation also transition toward green fuels.

"There's not enough feedstock to make biofuel for everyone," the second USGC trader said. "We're way late to the party. There's not a lot of biofuels left for shipping, which will make biobunkers more expensive."

The US Gulf Coast spot marine fuel bunker price remained stable on Oct. 17 as US bulk 0.5%S and MGO prices showed mixed movement in both major ports.

Platts, part of S&P Global Energy, assessed spot 0.5%S VLSFO bunkers in Houston at $439/mt ex-wharf on Oct. 17, down $1, and assessed MGO in the port down $4 to $631/mt ex-wharf.

Platts assessed spot 0.5%S VLSFO bunkers in New Orleans at $430/mt ex-wharf on Oct. 17, down $1, and assessed MGO in the port at $641/mt ex-wharf, up $1.

On the Atlantic Coast, Platts assessed spot 0.5%S VLSFO bunkers in New York at $467/mt ex-wharf on Oct. 17, up $1 day over day, and assessed MGO up $4 to $684/mt ex-wharf.

On the West Coast, Platts assessed spot 0.5%S VLSFO bunkers in Los Angeles at $513/mt delivered on Oct. 17, down $4 day over day, and assessed MGO in the port up $4 to $754/mt ex-wharf.