Alternative fuels are here, but liability frameworks are not

For decades, pollution risk in shipping was built around a stable and well-understood threat profile. Conventional persistent oil spills – from bunkers or cargo – dominated planning assumptions, supported by globally established response practices and international liability and compensation conventions. These frameworks provided clarity not only for regulators and responders, but for shipowners making commercial decisions with a clear understanding of their exposure.      Alternative fuels behave very differently to conventional oils... Response priorities shift from environmental remediation to containment, detection and human safety. 

The problem is that the international pollution conventions the industry has relied on for decades are largely fuel-specific, predicated on the pollutant being a persistent hydrocarbon mineral oil. Most alternative fuels therefore sit outside these frameworks entirely. When that happens, the benefits of the convention system, like strict liability, compulsory insurance and automatic rights of direct action against insurers, fall away. Compensation is still available, but it depends on local law, with outcomes varying widely between jurisdictions.

For shipowners, this introduces a level of uncertainty that is difficult to price, insure, or manage contractually. For ports, regulators, and claimants, it risks delay and inconsistency when clarity matters most.

Ammonia is a clear example of how this gap is emerging in practice. Its decarbonisation potential is well recognised, but so are its hazards. A release may not leave a visible pollution footprint, but the consequences can be severe. As a result, ports, regulators, and industry bodies are already investing in preparedness...The industry has been here before. International liability and compensation conventions were developed after fragmented national approaches proved inadequate following major casualties, most notably the Torrey Canyon oil spill. That incident directly triggered the creation of the Civil Liability Convention, later complemented by the Fund, Wreck and Bunkers Conventions, forming the IMO framework relied upon today......Together, these conventions introduced strict liability, compulsory insurance, and reliable compensation. Crucially, they enabled shipping to operate globally with a clear understanding of pollution risk......Today, the fuels may be different, but the lesson remains the same. Alternative fuels are already entering service. As uptake increases, so too will the likelihood of incidents that test existing frameworks. Waiting for a major casualty to expose these shortcomings would be a costly mistake...The energy transition will only succeed if it remains commercially viable, operationally safe, and legally insurable. Closing the liability blind spot around alternative fuels is not a regulatory detail. It is a prerequisite for confidence, investment, and long-term adoption.