Advances in alternative fuel production mean a wider range of applications for greener ship operations – but developments also call for mature mitigation strategies, writes Mark Smith, Loss Prevention Director for Decarbonisation at global mutual NorthStandard
Switching from HFO and MDO to green alternatives – including ammonia, methanol, hydrogen, biofuels, battery power and even nuclear reactors– introduces brand-new risks to the maritime and offshore sectors: instability, toxicity and engine damage, for example.
These are major challenges that will stretch operators, crews and P&I clubs alike, raising the prospect of complex claims and uncertain liabilities.
At NorthStandard, they are proactively helping their members to prepare now. By staying up to date on every emerging green marine fuel and technology, rather than limiting their scope to one or two options, the purpose is to stay ahead of multiple deadlines and support the industry’s long-term shift to Net Zero without compromising safety or financial strategies.
Currently, NorthStandard’s members account for about 20% of International Group tonnage, or 150 million gt. The International Group has identified major gaps in liability regimes for alternative fuels carried as bunkers, and NorthStandard has supported a submission to IMO’s Legal Committee on this topic. That item is now formally on its agenda.
Biofuels boom
Already, NorthStandard are seeing a strong uptake of biofuels. These are genuine drop-in fuels, removing the need for engine and tank conversions and/or dual-fuel system installations. That makes biofuels viable for older ships coming to the end of their operational lives.
Also driving biofuel adoption is the January 2025 introduction of FuelEU Maritime, which offers fleet operators the commercial incentive of a surplus/deficit trade-off scheme. So, ships with better access to biofuels – those working in the Netherlands, for instance – can build up compliance ‘surpluses’, while ships burning fossil fuels, including those operating in areas where biofuel availability is patchy, such as in the Mediterranean, rack up ‘deficits’. Through the FuelEU Maritime pooling mechanism, a biofuel-powered ship could effectively cancel out the deficit of a diesel-powered sister ship, cutting fleet costs relating to FuelEU.
This mechanism is for vessels trading to/ from EU-only for now, with the IMO’s comparable global regime version delayed, after the October 2025 MEPC Extraordinary Session adjournment. To help their members capture the savings already available, NorthStandard negotiated discounted transaction fees to the BetterSea surplus/deficit trading platform between February and mid-August 2025.
The discount equated to a saving of around €42,000 per containership (or more for a cruise ship), on top of the free expert consultation provided. They are now planning the next stage of partnership benefit with BetterSea.
As a club, they are already seeing biofuel-related claims, mostly related to problems with blocked filters and/or purifiers – and P&I clubs can expect more of the same as the uptake continues. In some cases, opportunist vendors may usie lower quality cutter stock to raise their profits by mixing it with fuel blends, thereby compromising personnel safety and vessel and component integrity. This is a trend noted at NorthStandard post IMO 2020 sulphur cap with very low sulphur fuel oils (VLSFOs).
That is why NorthStandard gives every member free access to their Fuel Insights platform, powered by data from every major bunkering port, provided by its partner VPS. This service provides real-time quality statistics, plus cat-fine alerts, for numerous regions—everything an owner needs to know when deciding where to bunker. In fact, one member recently used the platform to trace contaminated fuel straight back to a supply barge that had already contaminated other ships; this information helped the member to debunker in time, saving a substantial amount in potential repairs and legal costs.
On the technical side, NorthStandard have also ran webinars highlighting issues like microbial growth from fatty acid methyl ester (FAME) when it sits in tanks for months on end —an issue that short-run trials have only partly explored. Longer voyages will tell the full story, and are keeping up to date on these developments, so that the members stay informed. NorthStandard are also about to publish a biofuel guidance paper which will look at quality controls and proof of sustainability concerns because the members have raised these as potential issues.
Nuclear, WAPS and beyond
NorthStandard is also preparing for claims related to nuclear-fuelled ships. Here, insurability will hinge on reactor design, the emergency planning zone (EPZ – the immediate vicinity around the reactor for implementing rapid response to radiological incidents, and usually just the vessel itself when using modern SMRs) and the ship’s trading patterns.
Today’s compact SMRs have small EPZs, which suggests that they can be insurable and port-friendly. Older, larger designs with extensive EPZs may face restricted port access, soaring nuclear liability premiums and potential entry refusals until the exposure is fully quantified.
Prototype floating nuclear power plants are advancing toward deployment, and will come into being before nuclear merchant vessels. NorthStandard is heavily involved in this research, investigating everything from propulsion integration to offshore mooring. It is simply not enough to speculate: this is why risk assessments must evolve with the technology and the regulations.
To achieve this, NorthStandard has teamed up with the Nuclear Energy Maritime Organisation (NEMO). Launched in 2024, NEMO was created to unite stakeholders across the nuclear and maritime segments, with founding members including Lloyd's Register, Bureau Veritas, DNV, VARD Group, BWXT Advanced Technologies, CORE POWER and HD Hyundai (KSOE), to name just a few.
I am currently spearheading NEMO's STCW task force on training and certification for nuclear-powered merchant vessels because crew competencies will be essential for nuclear-powered commercial ships to take off. NorthStandard cannot rely on yesterday's P&I claim assumptions for nuclear ships: the old playbook, based on legacy land-based incidents or Cold War-era naval submarine management, underestimates how differently today’s SMRs function in a commercial setting.
Wind-assisted propulsion systems (WAPS) and hydrogen also demand fresh thinking when it comes to risk assessments.
What if wing sails won’t fold in port, or a mechanical WAPS failure impacts on vessel manoeuvrability?
Unknowns keep emerging. For example, hydrogen comes with well-known flammability risks and a wide explosive range. So, they nmust work in collaboration with class, fuel experts and manufacturers to stay knowledgeable and relevant.
Furthermore, given that the real danger may come years from now if crews grow complacent, establishing a culture of vigilance now is a critical basis for future safe fuel use. That is why NorthStandard runs regular live webinars on evolving regulations and risks, with crew competence always the top priority. they also run seminars to help embed and improve safety culture as well as helping their members to make procedures and safety management systems as useful as possible.
