The Indian government is drafting new rules to align the maritime sector with the International Maritime Organisation’s (IMO) upcoming emission regulations, Mint reported on Saturday. The move is part of a broader effort to support India’s maritime development and green transition goals.

The proposed rules will influence the design, construction, and operational costs of ships, as well as the structural planning for new mega ports and shipyards. Developed under the IMO’s Revised GHG Strategy 2023, these standards will introduce new fuel norms for ships and a global carbon pricing mechanism.

“These regulations will also define parameters for building green fuel filling stations at ports, and training programmes for the workforce involved in related activities,” a source told Mint.

New ships built at Indian shipyards will either need dual-fuel capabilities or be entirely designed to run on green fuels such as compressed natural gas, liquefied natural gas, methanol, ammonia, green hydrogen, or electricity. Currently, diesel is the primary fuel for vessels operating on inland waterways, select coastal routes, and international voyages.

Phased emission reductions

The new rules will feature a phased plan for carbon dioxide (CO2) emissions reduction and a timeline for green upgrades at ports. Shipowners will be required to engage classification societies for early compliance assessments.

The Directorate General of Shipping (DGS), under the Ministry of Ports, Shipping and Waterways, has already issued a guidance note outlining the IMO’s Net Zero Framework and Greenhouse Gas Fuel Intensity (GFI)-based compliance requirements. The advisory aims to help stakeholders familiarise themselves with the regulations and plan for their implementation.

The IMO’s action plan targets net-zero emissions from international shipping by 2050 through a mix of technical fuel standards and market-based pricing mechanisms.

The GFI-based system will formally take effect in March 2027 and become operational in 2028. It requires a gradual reduction in the carbon intensity of fuels used by ships over 5,000 gross tonnes (GT) engaged in international trade. This applies to all ships flagged under MARPOL, the main international convention for preventing marine pollution.

Economic and strategic impact

According to Mint, the new regulations are expected to have far-reaching operational, economic, and strategic implications for shipowners, ports, training institutes, classification societies, and fuel suppliers. The DGS estimates that India’s compliance cost could be $87–100 million annually by 2030, translating to a 14 per cent increase in fuel costs and a 5 per cent hike in freight rates.

However, India could also see strategic benefits, as it aims to produce 5 million tonnes of green hydrogen by 2030, which would enable the production of 28 million tonnes of ammonia and 26.3 million tonnes of methanol — both qualifying for compliance credits under the IMO’s GFI system.

Implementation strategy

The DGS has advised all stakeholders — shipowners, port authorities, fuel suppliers, and training institutions — to review the guidance note and begin preparations, including fuel intensity monitoring, workforce training, and green infrastructure planning.

Although only 14 per cent of India’s registered fleet currently qualifies for IMO compliance, domestic shipyards are already exploring retrofitting and green ship designs to capture new market opportunities. Exporters relying on foreign ships may face higher freight costs if those vessels fail to meet GHG compliance, making it essential to factor these regulations into chartering decisions.
Source: Business Korea