“Not all, but most of the stakeholders we have spoken to have expressed the recognition that at some level, compromise will be required,” he said. “But to say net zero is effectively dead — it is far too early. I would not take that statement at face value.”

His comments come amid a growing political backlash against net zero targets, most notably from US Energy Secretary Chris Wright, who has publicly dismissed the probability of achieving net zero as “zero.” The remarks have unsettled parts of the shipping industry, where owners face long-term investment decisions on fleet renewal and fuel strategy.

But asked whether greater pragmatism would ultimately mean pushing back the IMO’s 2050 net zero target, Chao said compromise on the timeline was likely. “I’ll be very surprised if everyone continues to stand on such an advanced stance,” he said.

Chao also pointed to China’s own dual-carbon goals — peaking emissions before 2030 and reaching carbon neutrality before 2060 — as an example of how even countries most advanced in renewable infrastructure have set timelines that reflect practical constraints.

Five hurdles the IMO must clear
Chao identified five challenges the IMO must address.

First, the industry remains deeply sceptical about the readiness of clean fuel supply chains, which must be shown to be viable and not prohibitively expensive. Second, the greenhouse gas fuel intensity targets were “perhaps a little too ambitious”, requiring near-term moderation.

Third, the IMO must widen acceptable decarbonisation pathways. He pointed to LNG as a critical case: while not the cleanest fossil fuel, its potential as a blend incorporating bio-LNG, biomethane and synthetic methane could make it “not a short- to medium-term solution, but indeed part of the final solution”.

Fourth, the proposed maritime fund lacks transparency and “will probably need to be clarified and possibly scaled back”. Fifth, national interests — particularly those of the US and Saudi Arabia — must be accommodated.

“If we look at the energy transition not as a hard cliff dividing fossil fuel and future clean energy, but as a gradient of transition, where fossil fuel can be connected to a cleaner future through intelligent energy blending, we could see there is continuity,” he said.

Chao also highlighted carbon capture, utilisation and storage as a potential game changer ahead of the upcoming MEPC session in April.

Studies by Wah Kwong show that conventional bulkers and tankers fitted with CCUS systems could achieve initial decarbonisation of 20% to 40%.

“If carbon capture can come back into the fold, this will make conventional ships more viable beyond 2030 into 2040.”

Multi-fuel future and the risk of stranded assets
Asked whether methanol and ammonia-fuelled vessels risk becoming stranded assets if the framework is revised to less ambitious targets, Chao acknowledged the danger but stopped short of sounding the alarm.

“To say there is no risk of dual-fuel ships being stranded — that would be wrong. There is an element of risk,” he said. “However, a responsible shipowner who has invested in dual-fuel ships will do well to look for potential partnerships and to understand where they can source clean fuel.”

He stressed the importance of demand aggregation — creating structured mechanisms for dialogue between fuel consumers and producers to reduce uncertainty on both sides.

“At this moment, there is a big element of uncertainty both for investors on the shipping end and for producers of methanol and green ammonia.”

He said he “personally still believes in a multi-fuel future”, noting that different countries will gravitate toward different solutions based on resource availability and national energy policy — China toward methanol, Japan toward hydrogen and ammonia, the US toward LNG.

“Not to experiment, not to push ahead, not to explore — that is also a risk,” he warned. “Regulations, as we have seen, were on the verge of being passed at the global level, and things could happen very quickly. There is risk on both sides — doing something and not doing something.”

China-Europe: the partnership that could unlock decarbonisation
A recurring theme throughout the interview was Chao’s conviction that a structured partnership between China and Europe holds the key to unlocking the first phase of scalable maritime decarbonisation.

“People in Europe are increasingly cognisant that in order to push forward the decarbonisation agenda, they cannot work in isolation,” he said. “Given that the US is more isolationist, not showing common values or pathways with Europe on decarbonisation, they are looking for partners elsewhere. There is evidently a greater willingness to engage China.”

The logic, he explained, is straightforward.

Europe has the regulatory pressure — EU ETS and FuelEU Maritime are already imposing significant costs — but lacks affordable clean fuel solutions. China, meanwhile, has developed renewable infrastructure at scale and can now produce green electricity at costs comparable to coal-fired generation.

“If a broader partnership can be had regionally and internationally, the energy transition is achievable,” he said. “China has demonstrated to the world that decarbonisation can be achieved at the same time as lowering cost. The two are not necessarily at loggerheads.”

He revealed that his chamber is actively working on building this China-Europe partnership, with a particular focus on constructing “clean fuel corridors” — an extensive network of green corridors that could facilitate the first phase of a scalable global fuel supply system.

One area of focus is bio-LNG and synthetic LNG produced in China. Hing also noted that LNG had always been part of Hong Kong’s clean fuel hub planning, although earlier policy emphasis had tilted more toward methanol when market momentum was strongest behind that fuel. After the IMO’s Net-Zero Framework failed to advance as hoped in October last year, he admitted, market attention has since shifted back toward LNG.

“Flexibility and agility are absolutely essential — not just for companies but also for governments,” he said.

A delegation to Beijing
Chao confirmed he will soon lead a delegation to Beijing to meet with the Ministry of Transport and other state departments. His message to policymakers will centre on three points.

First, that the rule-based global order — including the international maritime order — is under threat, and “it is time for China to show more leadership and commitment”.

Second, that China should work more closely with Europe to help achieve decarbonisation targets, which would also demonstrate the viability of a global clean fuel supply chain and have a beneficial impact on IMO negotiations.

Third, that Hong Kong needs stronger support from the mainland. “Hong Kong cannot be caught in no man’s land — being targeted by the US on one hand, and not receiving as much support as we want from the mainland on the other.”

Asked whether he would suggest Beijing consider a Chinese version of the EU ETS should the IMO fail to reach consensus, Chao said the idea would be explored but cautioned that “at this point, it is probably a bit early. Let us see what happens this year first”.