Filling the gap in liability and compensation for alternative bunker fuel spills

With the rise in the use of alternative fuels as bunker fuels in the shipping industry, Joel Ong, presently a LLM Candidate at Harvard Law School, recently wrote a blog post highlighting liability and compensation gaps concerning spills or leaks of these fuels and explored possible solutions to address them. 

The following is a summary of the original post from international law blog CIL Dialogues:   

The shipping industry is betting big on alternative fuels for its energy transition. Based on the 2024 orderbook, over 1700 vessels have been ordered with alternative fuel propulsion capabilities (with a more than 50% increase in 2024). 

These ‘future fuels’, which serve as alternatives to fossil-fuels, are critical if the International Maritime Organization (IMO) is to deliver on its 2023 GHG Strategy of reaching net‑zero GHG international shipping emissions ‘by or around 2050.’ But using these fuels poses a new challenge: the main IMO liability conventions that protected coastal States and affected parties from oil spills do not adequately protect them against spills or leaks of alternative fuels as these new substances behave very differently compared to fossil fuels.

With the rise in alternative fuels being transported both as cargo and used as bunker fuel, the present issues are threefold: (1) existing IMO liability conventions that are in force do not apply to alternative fuels, (2) the HNS Convention is not in force, and (3) even if it were in force, and although alternative fuels are often defined as HNS falling within the HNS Convention, the Convention only applies if they are transported as cargo, but not as bunker fuel. Alternative fuels such as hydrogen, biodiesel, methanol, ammonia, or liquefied natural gas (LNG) are not persistent fossil-fuel oils (Article 1(5), 1992 CLC) within the meaning of “oil” in existing conventions (i.e. they are, as their name suggests, non-oil in nature to address climate change).

The result is an incoherent patchwork of regulations applicable to these new alternative fuels, which would result in lack of liability and compensation in the event of an accident or disaster, potentially undermining the industry and IMO’s decarbonisation efforts.

The ongoing review by the IMO Legal Committee is a critical and promising opportunity to proactively fill these emerging liability gaps. However, it must act swiftly and draw lessons from the past. By the time substantive discussions on liability for alternative fuels begin, new fuels and vessel types will likely be in operational trials or early commercial deployment.

A serious incident involving a new alternative fuel—absent a fit-for-purpose and adequate liability and compensation framework—could undermine public confidence and potentially derail the long-term prospects of that decarbonisation option altogether. For these reasons, this issue should be given the utmost priority and attention by the IMO and the shipping community and addressed as soon as practicably possible.

This blog post was written prior to the author’s study in the U.S. on 31 July 2025 and is part of the conference paper the author presented at the CIL-CLIMA Conference on the Decarbonization of Shipping and Alternative Fuels and is supported by the MPA-CIL Oceans Governance Research Programme funded by the Singapore Maritime Institute (SMI-2023-MA-03).  

Note: The original blog post can be read here. 

Related: DNV: LNG dominates alternative-fuel vessel orderbook for 2024
Related: LR: 600 vessels capable of using alternative bunker fuels ordered in 2024

Photo credit: Joel Ong
Published: 22 October, 2025