The global shipping industry plays a crucial role in world trade, with 90% of all goods transported by ship, and approximately 50,000 commercial ships worldwide. However, the industry is facing pressure to decarbonize; it produces 3% of global emissions, roughly equivalent to the entire country of Japan. Fulfilling the goals of the Paris Agreement and achieving net zero emissions by 2050 means urgently finding alternatives to fossil fuels.

This sector relies heavily on oil-based fuels, which have provided over 99% of its total energy demand. A majority of large vessels, including cargo ships, industrial carriers, and some oil tankers, use heavy fuel oil, a residual product of the oil refinement process, in their engines. This not only produces carbon emissions but also contains high levels of nitrogen oxide and sulfur, contributing to air pollution, acid rain, and respiratory diseases. The member states of the International Maritime Organization (IMO) adopted the 2023 IMO Greenhouse Gas Strategy in 2023, agreeing to reach net zero emissions from shipping by 2050 and make zero- or near-zero greenhouse gas-emitting energy, fuels, and technologies contribute 5 to 10% of shipping’s energy mix by 2030, although small island nations and other countries called for stronger targets. Fossil-based liquefied natural gas (LNG) will not be included, although there is potential for biomethane or synthetic methane fuels to be used if leakage is properly managed.

Since ships have a lifetime of 20 to 30 years, new ships will need to plan for net-zero fuels in the near future. The IMO will begin grading each ship based on its CO2 emissions and cargo-carrying capacity; those with the lowest ratings will be required to take corrective measures in order to operate. “Ships being built today will still need to be operational during the decarbonisation process, so it is critically important to ensure that new ships being built are highly energy efficient and capable of running on new fuel types,” says Bo Cerup-Simonsen, CEO of Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping. “This is both a challenge and a significant opportunity.”

Ship operators are exploring energy efficiency measures such as slower speeds, route optimisation, hybrid technology and hull fouling management, but these measures only achieve 10 to 15% reductions. Full electrification is not currently feasible for shipping because of the volume occupied by current battery systems relative to the size of large ships and the volume of their engines; while innovation may change this in the future, solutions are needed now.

Biofuels are considered the most technologically advanced fuel option, as fuels like HVO (hydrotreated vegetable oil) can be substituted for fossil fuels in existing engines. Biofuel-related sustainability regulations and standards are already in operation, making this an attractive option for the start of the transition. However, their long-term scalability is uncertain, and supply is likely to be threatened in a context where numerous industries are increasingly turning towards biofuels.

The International Renewable Energy Agency (IRENA) identifies biofuels as a key short-term solution, while green hydrogen-based fuels like e-ammonia or e-methanol will be the sector’s backbone in the medium and long term. The key advantage of hydrogen-based fuel is the ability to retrofit existing ships with similar fuel cells, allowing for the replacement of fossil fuels with only minor changes to fuel capacity or operations. 43% of maritime voyages between the US and China would be able to replace fossil fuels with hydrogen-based fuels with no changes. Their fuel cells are easily scalable for larger vessels, as cells are stackable, and their only byproducts are water vapour and oxygen. Methanol engines and fuel tank technologies have been installed on ships since 2015, and ammonia engines currently under development show significant promise.

Fuel production using blue and green hydrogen, which are generated using natural gas or renewable energy as opposed to fossil fuels, remains more expensive than using traditional hydrogen. Despite these cost challenges, BP anticipates that between 30 and 55% of shipping fuel will be produced using blue and green hydrogen by 2050. IRENA’s roadmap aims for this to increase to 70% to be compatible with the 1.5 pathway.

While the appeal of innovative technologies is undeniable, other solutions draw from the far simpler maritime tradition of harnessing wind power. Around 30 large commercial ships are currently fitted with wind power technologies, and this number is growing, with companies such as Maersk, NYK, and Cargill exploring them. Cargill’s Pyxis Ocean ship is retrofitted with a technology known as WindWings, 123-foot tall foldable wings made from the same material as wind turbines. Another approach involves spinning cylinders called rotor sails, which were successfully installed by Chinese company CSSC Chengxi Shipbuilding on the Chang Hang Sheng Hai commercial ship. Although more sophisticated than traditional sailing vessels, these modern adaptations utilize lightweight materials to enhance ship performance and help reduce fuel consumption, marking a return to wind power in a modern context.

Sustainability initiatives in maritime operations require careful consideration due to the ocean’s complex ecosystem and the potential for unintended environmental impacts. In 2020, the IMO implemented regulations to reduce the maximum sulfur content in shipping fuel from 3.5% to 0.5%. This change was primarily aimed at improving air quality and public health by reducing harmful sulfur emissions from sources including heavy fuel oil. While the regulation contributed to a rapid reduction in sulfur emissions, studies found that this inadvertently contributed to an increase in global warming by reducing the cooling effect caused by sulfur aerosol particles. This example underscores the critical importance of comprehensive and diverse approaches to ensure sustainability in maritime practices.

“Climate change is the highest priority at the moment, but a number of other issues are being addressed, like sulfur emissions, particulates, and nitrogen oxides, as well as the biodiversity impacts of ship fouling and ballast water management,” says Mr Cerup-Simonsen. The IMO’s Marine Environmental Protection Committee oversees the international response to these issues.

As scientists and sustainable shipping experts coalesce around strategies for decarbonising shipping, the regulatory landscape will be crucial. “Most customers are not willing to pay significantly higher prices for climate-neutral shipping, so regulation is needed to drive adoption of these solutions,” says Mr Cerup-Simonsen. “Investment in efficient fuel production facilities and onshore infrastructure for new fuels is crucial, but investors need strong demand signals in order to commit significant capital.”

The EU has been a frontrunner in regulatory change. As of 2024, the European Emissions Trading System will cover the maritime industry, requiring shippers to pay a premium for emitting carbon. It has also implemented a global fuel standard with a diminishing carbon intensity target and credits for ship owners who use certain renewable fuels. Local governments will also need to take the initiative to modernise infrastructure, including streamlining the permitting process to facilitate the development of new fuel production facilities, fueling stations, and pipelines, adds Mr Cerup-Simonsen.

With container shipping prices already soaring, and bad weather and geopolitical disruption putting pressure on the industry, decarbonisation will be crucial to reducing costs in the near future. Companies are already getting on board, with initiatives like the Zero Emission Maritime Buyers Alliance (ZEMBA) mobilising organisations including Amazon, Patagonia, and Bauhaus to support the development of a zero-carbon market. The current context of ongoing regulatory change from governments and the commercial imperative for decarbonisation means the shipping industry is at a critical juncture in its transition to a sustainable future.