Shipping faces fragmented emissions rules amid IMO delay: Wartsila

Shipping companies might face multiple sets of emissions regulatory regimes, Finnish marine technology company Wartsila said Oct. 28, with the International Maritime Organization's new decarbonization rules hanging in the balance.

In mid-October, IMO member states voted to delay the Net-Zero Framework's adoption by a year due to strong US opposition, prompting doubts over the global regulator piece's future fate.

"This outcome opens the door to a fragmented landscape of carbon pricing mechanisms introduced by individual regions and countries," Wartsila President and CEO Hakan Agnevall said in the company's latest quarterly report.

The uncertainty comes as the EU has already implemented its own emissions trading system for shipping, while China is signaling plans for its own programs, adding complexity to global shipping operations and potentially influencing ship technology choices, according to the company.

Marine business outlook

Despite the regulatory challenges, Wartsila expects the demand environment for its marine business to improve over the next 12 months as shipping companies turn optimistic over future demand.

"Marine market sentiment has improved recently following a slow start to the year, supported by trade agreements between major economies, and the resilience in global trade," Agnevall said.

The company said demand for alternative-fuel-capable ships has remained strong, representing 48% of contracted capacity so far in 2025, indicating that a large portion of shipowners have continued to prepare for a lower-carbon future despite regulatory uncertainties.

While new ship ordering activity has slowed compared to what Agnevall described as "extraordinary levels" in 2024, it remains above the 10-year average, with particularly healthy activity in Wartsila's key segments.

"The impact on shipping demand has been uneven across segments, and growth in seaborne trade has moderated," Agnevall said, pointing to factors such as ongoing uncertainty around trade policies, elevated newbuild prices and softer demand in some shipping segments that have negatively affected new ship orders this year.

Technology response

Wartsila emphasized its readiness to support various decarbonization pathways amid the evolving regulatory landscape, positioning itself as a provider of flexible solutions for shipowners navigating uncertain requirements.

"We are helping our customers navigate the transition by optimising fuel efficiency and de-risking the future through fuel flexibility, leveraging hybrid solutions, alternative fuels, and carbon capture," Agnevall said.

Sustainable marine energy has remained much more expensive than conventional, oil-based bunker fuels, and some shipping professionals have said companies should invest in energy-efficiency measures for now to cut fuel expenses before investing in certain alternative fuels due to persistent regulatory uncertainty.

The monthly average delivered bunker price for 0.5% sulfur fuel oil, the most common bunker type, was $11.80/Gj in Singapore in September, compared with $14.13/Gj for LNG, $16.88/Gj for B24 biobunker fuel with 24% used cooking oil methyl ester and $46.28/Gj for 100% sustainable methanol, according to the bunker cost calculator from Platts, part of S&P Global Energy.

Wartsila said its overall order intake increased 5% year over year to Eur5.88 billion ($6.86 billion) over January-September, with organic growth at 8%. The order book at the end of the period rose 14% to Eur8.6 billion.

The company's comparable operating result increased 18% to Eur573 million, representing 11.7% of net sales, up from 10.5% in the same period last year.

Wartsila, which operates in the marine and energy segments, said high geopolitical uncertainty, changing global trade patterns and unclear tariff policies create risks of investment postponements and potential slowdowns in global economic activity.