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6 October 2025 Refinements needed for the IMO NZF
However, the current NZF proposal requires crucial refinements to achieve its ambitious goals without unintended consequences that could disrupt global trade and key industries. Our position is clear: while pursuit of decarbonisation is non-negotiable, it must be achieved through a balanced, realistic, and collaborative approach that brings together all stakeholders, including shipowners, ports, governments, and fuel providers, to make meaningful progress. 
Image by Stolt-Nielsen Limited Our sustainability stance
We take our role as an essential part of the global supply chain seriously, with a strong focus on operating safely and sustainably in all that we do. Protecting the marine ecosystem and reducing our carbon footprint are pivotal components of our operations. Our ambition is to achieve carbon neutrality by 2050. Our sustainability progress We have consistently delivered on our ambition for sustainability and emissions reduction: • We have achieved a 34.6% reduction in Scope 1 carbon intensity (in 2024, relative to the 2008 baseline), progressing towards our ambition of a 50% reduction by 2030. • Stolt Tankers has held an EcoVadis gold rating for the past three years, recognising significant efforts across all measured areas. • Stolt Tankers has been using biofuels in its ships for many years as part of our long-term sustainability strategy. • We offer carbon insetting to share the cost of biofuels with participating partners, helping us lower both our Scope 1 emissions and their Scope 3 emissions. • We continuously explore opportunities to enhance fleet efficiency, such as specialised coatings on vessels, propeller boss cap fins and other energy saving devices. Stolt Tankers welcomes the IMO's efforts to establish a global NZF that supports decarbonisation while providing a level global playing field. A coordinated framework is required to avoid fragmented regional regulatory schemes, which are overly complicated and an administrative burden. However, as it stands, aspects of the proposal undermine its effectiveness and feasibility. Key concerns with the current IMO NZF 1. Penalties vs compliance The shipping industry is highly diverse, with varying economic and operational dynamics across vessel types. A VLCC (very large crude carrier), a chemical parcel tanker, and a container ship each have different business models and cost sensitivities. For niche operators like Stolt Tankers, working with chemical parcel tankers and early in the value chain of an end product, the proposed payment schemes are disproportionately punitive. And yet, it will also create a situation where paying penalties becomes more cost-effective than actively pursuing decarbonisation, which undermines the fundamental intent of the regulators. Instead of incentivising the investments in alternative energies, the current scheme will result in inflated costs for a chemical industry that is already facing no shortage of challenges. 2. Fuel and infrastructure viability According to Clarksons data1, alternative fuels accounted for less than 10% of bunker use worldwide in 2024. And they are by no means all truly ‘green' fuel, meaning produced in a way that ‘well-to-wake' emissions are actually reduced. While alternative fuels (e.g., LNG, green methanol, or ammonia) show promise, wide-spread adoption faces challenges: • High costs: For example, green methanol is up to 5 times more expensive than current conventional fuels, partly driven by limited supply and by high production and transportation costs. • Safety and scalability: Large ammonia-powered engines remain in pilot phase, with unresolved concerns over safe handling, toxicity, and global regulatory acceptance. • Infrastructure deficit: Globally, ports and fuel producers lack the necessary infrastructure to support these technologies at scale. LNG currently stands as one of the most viable interim solutions, used by approximately 970 ships globally (projected to exceed 1,500 by 2029). However, LNG adoption heavily depends on consistent trading patterns, bio-LNG access, and the development of fuelling infrastructure at key ports. This limits its broader applicability across all shipping segments. The burden of experimentation with new fuels falls almost entirely on shipowners, leaving operators exposed to financial risk from ‘betting' on the wrong fuel technology. This is an unsustainable scenario, where broader systemic collaboration and investment is required. In the short term, biofuel stands out as the most viable option for the wider shipping industry. As a drop-in fuel, it circumvents the need for extensive retrofitting and large capital expenditures, while avoiding the technological and infrastructure hurdles posed by alternative fuels. However, capacity and availability of biofuel are highly uncertain. Potential feedstocks, such as used cooking oil or tallow, a byproduct of slaughterhouses, have natural limitations as there is a limit to the cooking and beef consumption the planet can sustain. Until more viable alternatives emerge, shipowners are left to navigate these challenges alone. In the longer term (2040 horizon), nuclear power could offer transformative potential for the maritime industry. Fourth-generation nuclear technologies could provide significant improvements in safety, efficiency, waste reduction, and sustainability. 3. Economic impact on global trade Compliance under the current NZF model would significantly increase transportation costs, with a resulting inflation in product costs of between 50% and 100%, depending on trade routes and products carried. The magnitude of proposed fees cannot be absorbed by carriers, and will necessitate a pass-through of costs to customers, many of whom operate on thin margins and/or in essential sectors (e.g., medicines, food, fertilisers, and chemicals). Such cost inflation risks destabilising these industries, with ripple effects threatening the affordability and availability of these essential goods worldwide, ultimately impacting the end consumer. 4. Transparency in fund allocation The NZF's payment scheme is projected to raise billions of dollars in penalties. However, there is no current visibility into how these funds will directly drive decarbonisation efforts. For the NZF to maintain credibility, funds must be transparently reinvested into decarbonisation efforts. Key priorities should include subsidising alternative energy infrastructure, accelerating retrofitting of existing vessels, and incentivising green fuel adoption. Without clear reinvestment plans, the framework risks being perceived as punitive rather than facilitating change. Our recommendations 1. Gradual and realistic fleet targets • Establish realistic, phased intensity reduction targets, keeping all pathways open at this point. Different shipping segments will require tailored solutions to address their unique needs, in trading patterns and regional infrastructure. • Identify achievable regulations for newbuilds that align with technological advancements. • Create support for biofuels during the transition period, while ensuring older ships can remain operational until the end of their useful life. 2. Enhanced carbon trading systems Introduce a global carbon credit mechanism to allow cross-industry trading. This would ensure advanced and easier-to-abate sectors can help offset challenges to the timeline for shipping. 3. Whole-system collaboration The responsibility for decarbonisation should be shared across the entire maritime ecosystem, including ports, fuel producers, and governments, with unified targets and priorities. 4. Minimise unintended economic impacts Consider the consequences of a financially punitive regime to global trade overall, avoiding the risk of increasing inflation, global unemployment, or shortages of vital products from market as unintended negative impacts. Conclusion The world's trade network is a delicate and highly interconnected system, and decarbonisation efforts must reflect this complexity. At Stolt Tankers, we want to do our part by operating more efficiently, reducing our carbon intensity, and investing in feasible solutions. The NZF framework has the potential to drive transformative change in the shipping industry. However, its long-term success depends on realistic, collaborative, and well-coordinated efforts that support all stakeholders. Stolt Tankers stands ready to work with the IMO and partners across the maritime ecosystem to create a long-lasting, practical framework for decarbonisation. We urge the IMO to pause and prioritise dialogue with the industry to refine the framework, ensuring it achieves both environmental and economic balance. The NZF should be both ambitious and practical, supported by the collaboration of the whole industry. (1) Fuelling Transition: Tracking the Economic Impact of Emission Reductions & Fuel Changes, Clarkson Research, October 2024 Update (No 12) Stolt-Nielsen Limited - press release 
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