SASKATOON — A proposed regulation by the International Maritime Organization could create a massive new market for corn, soybeans, canola and other crops.
The Net-Zero Framework would force ships to gradually reduce their greenhouse gas emissions over time by using low-carbon fuels in places of traditional fossil-based marine fuel.
“The scale of this opportunity is just enormous,” said Geoff Cooper, president of the Renewable Fuels Association, a U.S. national ethanol organization.
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“It’s really unlike anything we’ve seen.”
Why it Matters: Crop prices are languishing due to oversupply and need a new source of demand.
Ships that would be subject to the proposed regulation use 70 to 80 billion gallons of fuel per year globally.
“Even if U.S. ethanol captured just five per cent of the global maritime fuel market, it would equate to a game-changing demand boost of four to five billion gallons, while simultaneously increasing corn demand by 1.5 billion bushels or more,” said Cooper.
To put that in perspective, total U.S. ethanol production was 16.1 billion gallons last year.
The U.S. Department of Agriculture is forecasting a price-depressing 2.11 billion bushels of U.S. corn carryout in 2025-26.
Ethanol demand from the maritime sector could mop up much of that excess if the proposed regulation is adopted.
“It’s not hard to understand what sort of impact that would have on prices for farmers,” said Cooper.
It would also boost demand and prices for American sorghum and soybeans.
“There is huge potential in this for Canadian agriculture as well,” he said.
Ian Thomson, past president of Advanced Biofuels Canada, agrees with that assessment.
“It’s a really significant new market for biofuels,” he said.
Ships can run on 100 per cent biodiesel or ethanol, while on-road fuels are limited to biodiesel blends of five to 20 per cent and ethanol blends of up to 15 per cent.
“That’s why people in the biofuel sector are looking at maritime fuels as a really big new market,” said Thomson.
That new source of demand could bring idled biofuel plants back into production, he said. There is a lot of excess capacity in North America.
Biofuel and other low-carbon alternatives comprise far less than one per cent of maritime fuel needs today. An estimated 93 per cent is petroleum-based fuel oil and diesel/gas oil, while six per cent is liquified natural gas (LNG).
Ships using U.S. ethanol, biodiesel and renewable diesel would “easily comply” with the IMO’s proposed standards, which were set to take effect in 2027 and last through 2038.
The IMO met in mid-October to vote on the proposal but decided to delay the vote for another year due to push back from some groups, including U.S. president Donald Trump’s administration.
Cooper said the Trump administration incorrectly believes the IMO framework would exclude proven technologies such as LNG and biofuel.
“We don’t see it that way,” he said.
“According to (the U.S. Department of Energy’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.”
That DOE analysis shows U.S. corn ethanol would reduce greenhouse gas emissions by 61 per cent compared to traditional fossil-based marine fuels, while U.S soy biodiesel and renewable diesel would reduce emissions by 66 and 60 per cent, respectively.
Cooper said the U.S. biofuel sector needs to spend the next year “connecting the dots” for U.S. policymakers, impressing upon them what a “remarkable new market opportunity” this is for American farmers.
He hopes the U.S. delegation will vote in favour of the proposed framework when the IMO reconvenes next October.
If that happens, he expects the new regulation to be implemented in 2028, one year after the original plan.
Cooper thinks ethanol would immediately benefit from the regulation because it has the infrastructure to store and move the fuel anywhere it needs to go, including storage facilities at seaports.
The U.S. exported 1.85 billion gallons of the fuel in 2024.
Thomson said there is not much lobbying that needs to take place in Canada. Ottawa knows the biofuel sector supports the proposed framework, and the Canadian delegation voted in favour of it at the October meeting.
