Major European maritime nations such as Greece and Denmark are on a collision course over the future of liquefied natural gas (LNG) – not as a cargo, but as a replacement for the highly polluting bunker fuel that powers most of the world’s tankers and container ships, Euractiv has learned.

The spat, which also pits Washington and Beijing on opposite sides, centres on a Net-Zero Framework due to be adopted by the International Maritime Organisation (IMO) in October. From 2028, ship operators will face penalties based on their use of excessively polluting fuels.

Under the new framework, emissions will be measured on a full life-cycle basis, not just what comes out of the ship’s funnels. This means greenhouse gases released during the production, processing and transport of a fuel will also be counted – lowering the perceived benefit of switching to LNG.

Several sources familiar with the matter said southern European countries – Greece, Italy, Cyprus, and Malta –support a proposal within the IMO to recognise LNG’s role as a transitional fuel in decarbonising the shipping sector.

If natural gas cannot be considered ‘green’ due to the emissions linked to producing, liquefying and burning, the IMO framework, which was provisionally agreed in April, would effectively prioritise hydrogen and synthetic ‘e-fuels’ produced using renewable electricity like wind or solar.

The issue has created a north-south divide among the EU’s main ship-owning countries.

In contrast with the southern maritime powers, Denmark and the Netherlands, which invest more in ‘low-carbon’ methane-based fuels produced using renewables or carbon capture technology, are pushing for stricter rules to keep LNG out of fuel tanks.

EU’s US-China dilemma 

But the row is no longer merely a domestic EU squabble, as geopolitical actors prey on the divided bloc.

The US has strongly condemned the IMO’s provisional agreement, aligning itself with southern Europe. China, meanwhile, supports the Danish-led push for stricter standards and greater use of low-carbon methane fuels.

Washington has described the IMO deal as a “global carbon tax on Americans” imposed by an “unaccountable UN organisation”.

“These fuel standards would conveniently benefit China by requiring the use of expensive fuels unavailable at global scale,” the US Department of Commerce has said.

The US position echoes that of Greek shipowners, who have called for “realistic” decarbonisation pathways for the shipping sector.

With around 1,485 LNG-capable vessels in service – and nearly 1,000 more on order – southern European countries argue that LNG is a practical short-term tool for reducing emissions. They point to a mature global infrastructure for LNG supply, distribution and bunkering, unlike alternatives such as e-methanol or e-ammonia, which currently lack commercial-scale production and viable infrastructure.

Meanwhile, Beijing has heavily invested in green methanol and ammonia and is expected to benefit strategically from the IMO framework, potentially becoming a key supplier for global shipping fleets as the industry shifts toward zero-emission fuels.

All this leaves the EU in a delicate position, with Brussels having pledged to purchase $750 billion worth of US energy over the next three years under a broader trade agreement with Washington – much of which will be in the form of LNG.

Under EU regulations, average carbon emissions associated with maritime fuel used in Europe must fall by 6% by 2030 and 80% by mid-century.

(rh, de)