There’s an old saying in politics that suggests “if you’re not at the table, you’re on the menu.” Sure, the adage is overused and a bit cliché. But it aptly describes events that will be occurring in London this week, the outcomes of which could have important long-term consequences for the future competitiveness of America’s renewable producers and farmers.
Diplomats from around the world will meet in England’s capital city October 14–17 to vote on whether to adopt a new set of international regulations focused on reducing GHG emissions from oceangoing ships. And whether the interests of U.S. fuel producers, farmers, and shippers are at the table—or on the menu—remains to be seen.
This proposed regulatory program, developed by the International Maritime Organization (IMO), is known as the “Net-Zero Framework” and operates similarly to a low carbon fuel standard for on-road fuels (like those already in place in California, Oregon, Washington, and Canada). In accordance with annual standards, ships must gradually reduce their GHG emissions over time by using lower-carbon fuels in place of traditional fossil-based marine fuel. Ship operators who use fuels with lifecycle carbon intensity values below the annual standard will generate tradeable and bankable credits, while ships that exceed the annual carbon intensity threshold will generate deficits. Those deficits must be offset by acquiring credits from over-compliant shippers and/or by paying into a proposed IMO Net-Zero Fund, which will be used to financially reward low-emission ships, support research and innovation, and for other purposes. Marine shipping companies around the world, including U.S. businesses, have voiced their support for the IMO program.
The U.S. ethanol industry sees the IMO Net-Zero Framework as an enormous potential market opportunity for American-made renewable fuels produced from American-grown crops like corn, sorghum, and soybeans. How enormous? Well, the ships that would be subject to the IMO regulations typically consume roughly 70–80 billion gallons of fuel per year worldwide. To put that in perspective, total U.S. ethanol production last year was 16.1 billion gallons. Even if U.S. ethanol captured just 5 percent of the global maritime fuel market, it would equate to a game-changing demand boost of 4–5 billion gallons, while simultaneously increasing corn demand by 1.5 billion bushels or more. Just imagine the economic impact that this sort of new demand would have on the rural communities where ethanol is produced and corn is grown.
Today, most (roughly 93 percent) marine fuel is petroleum-based fuel oil and diesel/gas oil (“bunker fuels”), while about 6 percent is liquified natural gas (LNG). Meanwhile, considerably less than 1 percent of current maritime fuel needs are met with biofuels or other low-carbon alternative fuels. Adoption of the Net-Zero Framework would change that—and change it quickly.
According to Department of Energy (DOE) analyses, U.S. corn ethanol used for maritime fuel could reduce GHG emissions by 61 percent compared to the traditional fossil-based marine fuels being used today. DOE’s research also shows a 66 percent GHG reduction for U.S. soy biodiesel used as marine fuel and a 60 percent reduction for soy-based renewable diesel. That means ships using low-cost, American-made ethanol, biodiesel, and renewable diesel could generate credits and easily comply with the annual IMO standards (which, if approved, are set to take effect in 2027), through at least 2038. U.S.-produced LNG and biogas would also serve as attractive options under the Net-Zero Framework.
The IMO program represents an unprecedented opportunity for ensuring American energy dominance in an emerging global market, leveraging existing infrastructure and investments, and enhancing the economic resiliency of U.S. agriculture and rural communities.
Thus, we were more than a little surprised when Secretary of State Marco Rubio, Secretary of Commerce Howard Lutnick, Secretary of Energy Chris Wright, and Secretary of Transportation Sean Duffy issued a statement in August stating that the Trump Administration “unequivocally rejects this proposal before the IMO.” The statement also encouraged other IMO member companies to vote against the proposal this week.
The administration’s opposition appears rooted in its notion that the IMO framework would “preclude the use of proven technologies such as liquefied natural gas (LNG) and biofuels.” We don’t see it that way. Again, according to DOE’s own analysis, U.S. ethanol—the lowest-cost alternative fuel available at scale worldwide—would be an incredibly competitive marine fuel option under the program. Major players in the marine engine and shipping industries are already acknowledging ethanol’s potential. Indeed, one marine engine manufacturer recently called adoption of the Net-Zero Framework “a beautiful case for those who have ethanol capabilities installed already” due to ethanol’s “handling benefits, growing availability and competitive pricing.”
But if U.S. leaders leave the table, they will most certainly cede this important market opportunity to our biofuel and agriculture competitors in Brazil, China, and Europe. They’ll also leave a leadership void that proponents of uneconomical, unproven, fantasy fuel technologies will be all too happy to fill.
And so, as U.S. leaders descend on London this week, we are sending a simple but urgent message: Please, keep America’s renewable fuel industry at the table. And off of the menu.
