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Why the IMO’s LCA Guidelines are crucial for the future of green marine fuels

Why the IMO’s LCA Guidelines are crucial for the future of green marine fuels 

This week, the IMO’s Intersessional Working Group on the Reduction of GHG Emissions from Ships is meeting in London. Next week, the Marine Environment Protection Committee (MEPC) convenes. Most of the attention will rightly be on proposals to advance—or possibly amend—the IMO’s Net-Zero Framework. These decisions are critical. They will shape the pace and direction of shipping’s decarbonisation over the coming decade (See our recent reporting here, here and here). 

But there is another piece of work, running in parallel, that may prove just as consequential. The further development of the IMO’s Life Cycle Assessment (LCA) Guidelines is being led by the Working Group on Life Cycle GHG Intensity of Marine Fuels (GESAMP-LCA WG). It is here — deep in technical details — that crucial market signals will be set. If the rules for measuring emissions are weak, the incentives will be weak and future investment will follow the wrong pathways. 

Over the coming months, we see five key issues that will determine whether the LCA framework accelerates the transition to genuinely zero-emission fuels or inadvertently locks in higher emission pathways. 

1. Methane: getting the default values right 

Methane emissions are now at the centre of the debate on shipping fuels. On paper, liquified natural gas (LNG) can appear to offer climate benefits, particularly when assessed on a tank-to-wake basis (see DNV’s recent white paper on methane in shipping). But when you move to a full well-to-wake perspective, the picture changes significantly. Methane leakage across the value chain - from upstream production to onboard engine slip - can erode and in some cases negate those benefits. 

The challenge is that methane emissions are highly variable. They depend on geography, infrastructure and operational practices. Inventory-based estimates have consistently struggled to capture this variability, particularly the impact of “super-emitters”. Even small changes in default assumptions can materially shift the competitiveness of different fuels. Underestimated methane emissions reduce the compliance gap between LNG and truly zero-emission fuels—slowing investment in the latter. 

The GESAMP Working Group has identified four methodological options for how to handle this. In our view, only one of them - a single conservative global default value - is fit for purpose. Market-mix averaging would allow high-emitting supply chains to be diluted. Value ranges or multiple defaults would hand operators the ability to cherry-pick lower-bound figures. Regional defaults are unworkable for a fungible global commodity: once LNG enters terminal infrastructure, molecules are indistinguishable. 

There is also a structural point that is rarely acknowledged. Under the 2024 LCA Guidelines, purely fossil fuel pathways cannot use project-level measured data to demonstrate that their specific supply chain performs better than the default. This means that whatever LNG default is adopted will effectively persist in regulatory calculations regardless of what measurement campaigns subsequently reveal. A low default set now risks becoming a permanent free pass. The only protection against that outcome is getting the number right — conservatively — from the start. 

Underestimating LNG's upstream emissions doesn't just misrepresent one fuel. It narrows the apparent compliance gap for the whole fleet, reducing the incentive to switch to zero-emission alternatives. The way forward is clear: 

  • greater reliance on measurement-based data 

  • greater alignment with robust frameworks such as OGMP 2.0 level 4 and 5 

  • and, where data is uncertain, the use of genuinely conservative default values. 

2. Biofuels: from categories to credibility 

Biofuels are often presented as a near-term solution for shipping decarbonisation. But their climate performance is far from uniform. The key issue is land use.  

Direct and indirect land-use change (DLUC and ILUC) represent two of the most significant and often underappreciated risks. DLUC occurs when land is directly converted for feedstock production, for example through deforestation or the drainage of peatlands, leading to immediate and often substantial carbon emissions. ILUC, by contrast, arises through global market dynamics: as existing agricultural production is displaced, it can trigger land conversion elsewhere, with similarly significant emissions and environmental consequences.  

Together, these effects materially alter the lifecycle profile of biofuels - sometimes to the point where they offer little or no climate benefit relative to fossil fuels. While methodologies for addressing ILUC are evolving, DLUC remains insufficiently captured in many frameworks, creating a risk of systematic underestimation. These risks need to be addressed through robust classification, traceability and ongoing monitoring. 

The GESAMP Working Group has done some important work on biofuels. It recently agreed a three-category framework classifying feedstocks as low-, medium-, or high- ILUC risk — to replace the more limited two-category model in the 2024 Guidelines. But agreeing a framework and operationalizing it are two different things. The critical next step is an initial global feedstock classification: which feedstocks fall into which category, drawing on the existing work already done by CORSIA, the California Low Carbon Fuel Standard, the US Renewable Fuel Standard, and the EU Renewable Energy Directive.  

There is also a gap that has received less attention: direct land use change. The DLUC parameter is currently set to zero in the 2024 Guidelines, pending further methodological development. Until it is properly operationalized, biofuels with significant land conversion impacts receive no GHG penalty for that conversion. This is at least as significant an integrity gap as the ILUC framework, and it needs to be on the same development timeline. 

The stakes are high. Once DLUC and ILUC emissions are properly accounted for, some food- and feed-based biofuels provide only limited — or in certain cases negative — climate benefits relative to fossil fuels. A framework that fails to capture these effects won't protect the integrity of the IMO's net-zero ambitions, as with LNG defaults it risks reducing the incentive to switch to genuinely sustainable and scalable zero-emission alternatives 

3. Renewable electricity: defining what counts 

For hydrogen-derived fuels - including green ammonia, e-methanol, e-methane - the single most important methodological question is how the renewable electricity used in production is defined and verified. Get this wrong and "green" fuels produced from grid electricity with high carbon intensity could claim the same reward as genuinely renewable-powered production.  

The GESAMP Working Group has flagged this issue at every session. It has not yet agreed a workable specification. Across jurisdictions, approaches are converging around three core principles: 

  • Additionality: is the renewable electricity new or simply diverting existing supply? 

  • Temporal matching: is generation aligned with consumption, or balanced over longer periods? 

  • Geographical correlation: is the electricity physically deliverable to the point of use? 

These are not abstract questions. They go directly to the environmental integrity of electrofuels. At the same time, the treatment of grid-connected projects introduces additional complexity. In systems with high renewable penetration, rigid rules may create unnecessary barriers. But overly flexible rules risk diluting the concept of “renewable” altogether.  

The IMO does not need to reinvent the wheel here. Established guidance such as the Greenhouse Gas Protocol Scope 2 Guidance (currently under review), the recently published ISO Standard 19870-1 and GH2’s own Green Hydrogen Standard provide operational criteria that GESAMP could use as a reference for this purpose. 

4. Embedded emissions: the consistency challenge 

Another issue gaining attention is the treatment of embodied, embedded or infrastructure emissions. Renewable electricity infrastructure, electrolysers, and associated assets all have lifecycle emissions. Including these can improve completeness and comparability. But there is a risk of asymmetric application. If embedded emissions are applied rigorously to electrofuels but not to fossil or biofuel supply chains the result is a structural distortion.  

A practical solution may be to apply materiality thresholds—excluding very small contributions while ensuring that significant emissions are captured. This approach is already well established in other lifecycle assessment methodologies. Consistency is the key across all pathways. 

5. Carbon accounting: avoiding double counting 

As carbon capture, utilisation and storage (CCUS) becomes more prominent, the question of how to account for carbon flows is another risk. Different carbon sources - fossil, biogenic, atmospheric - have fundamentally different implications for lifecycle emissions. There is also a risk of double counting between sectors, across value chains and within crediting mechanisms. Clear system boundaries, robust allocation rules and transparent certification will be essential. Without them, the credibility of emissions accounting will be undermined. 

The bigger picture: why this matters now 

It is easy to see the LCA Guidelines as a technical exercise. They are much more than that. They are a key pillar of the regulatory framework. They determine how emissions are measured, how fuels are compared, and ultimately how capital is allocated. As the IMO moves towards finalising elements of its Net-Zero Framework, the development of the LCA Guidelines will play a decisive role in shaping outcomes. If done well they can provide clarity to investors, ensure a level playing field across fuel pathways and accelerate the deployment of truly zero-emission solutions. If these gaps persist, uncertainty and loopholes will undermine the business case for green fuels.    

 

Sam Bartlett,
Director of Standards, GH2