Everything you need to know about ship decarbonization, from cutting-edge technology to global incentives and timelines
Why Ship Emissions Matter
Ships carry more than 80% of world trade, but they also create a massive pollution problem. Shipping carries more than 80% of world trade and in total emitted more than a billion tons of CO2 in 2018, according to the International Maritime Organization’s most recent greenhouse gas study.
To put this in perspective, if shipping were a country, it would be the sixth largest polluter in the world. The maritime sector presently accounts for about 2.8% of all global greenhouse gases (GHG) emissions, mainly due to its rapid growth, its dependence on carbon-intensive bunkers, and the sheer size of its business.
The good news? Maritime transport is also one of the economic sectors with a greater potential to reduce its GHG emissions. With the right technology, policies, and incentives, we can dramatically cut ship emissions while keeping global trade moving.
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🚢 Current Methods to Reduce Ship Emissions
Operational Changes: The Quickest Wins
The easiest way to cut ship emissions is changing how ships operate today:
Slow Steaming
Slow steaming refers to the practice whereby the (operational) speed of the ship is reduced. It basically means that the ship’s engine is not used at full power, thus saving fuel, reducing CO2 and air pollutant emissions. Reducing ship speed by 10% will lead to a 27% reduction of the ship’s emissions.
Real-world outcome: If all ships were to slow-steam, reducing the fleet’s speed by 10% would lead to overall CO2 savings of 19%.
Route Optimization
- Better voyage planning to find the shortest routes
- Weather routing to use favorable winds and currents
- Port call optimization to reduce time at anchor
- Just-in-time arrival to avoid waiting outside ports
Maintenance and Efficiency
- Regular hull cleaning to reduce drag
- Propeller maintenance and upgrades
- Engine tuning for optimal fuel consumption
- Waste heat recovery systems
Real-world outcome: Efficiency measures like slow steaming (reducing the speed of ships), bulbous bows (placed at the front of the ship to reduce drag and increase fuel efficiency), and propeller and hull upgrades have helped reduce the carbon intensity of shipping by over 30% since 2008.
Ship Design Improvements
New ships are being built with efficiency in mind:
- Bulbous bows: Reduce water resistance and improve fuel efficiency
- Advanced hull coatings: Reduce friction with seawater
- Improved propeller designs: Convert more engine power into forward motion
- Lightweight materials: Reduce ship weight without sacrificing strength
⚡ Revolutionary Technologies: The Future of Clean Shipping
Alternative Fuels: Beyond Heavy Oil
Most ships today burn heavy fuel oil, a thick, dirty byproduct of oil refining. Heavy fuel oil has a high energy density, meaning it can propel ships a long distance on a small amount, and is relatively cheap because it is a byproduct of the oil refining process that produces diesel and petrol.
But the future lies in cleaner alternatives:
Green Methanol
Methanol is becoming the fuel of choice for many shipping companies:
- Storage advantages: Can be stored in regular tanks at normal temperature
- Safety benefits: Less toxic than ammonia, biodegradable in water
- Dual-fuel capability: Can be mixed with conventional fuel during transition
- Commercial reality: The first methanol-powered container ship, the 2,100 TEU Laura Mærsk, entered service in 2023
Maersk is betting that methanol is the fuel of the future and has ordered a wide range of container vessels with methanol-capable designs.
Green Ammonia
Ammonia offers the most promise for long-distance shipping:
- Zero carbon combustion: Burns without producing CO2
- High energy density: More energy per volume than hydrogen
- Existing infrastructure: Already used globally as fertilizer
- Coming soon: The first ammonia-capable engines are expected in 2025
DNV, a global maritime classification society, says ammonia and hydrogen could be 60% of shipping fuel by 2050.
Green Hydrogen
The ultimate clean fuel, but with storage challenges:
- Zero emissions: Produces only water when burned
- Renewable production: Made from water using wind or solar power
- Storage complexity: Requires cryogenic storage at -260°F
- Ideal for short routes: Hydrogen in compressed form is ideal to decarbonize small ships that operate on shorter trade links and can refuel frequently
Liquefied Natural Gas (LNG)
A transitional fuel that’s controversial:
- Current use: DNV’s Alternative Fuel Insights reports that 471 LNG-powered ships were in service in 2023, with an additional 400 under construction
- Emissions reduction: About 25% less CO2 than conventional fuels
- Methane problem: Even the most popular LNG ship engine for cruises was found to offer no climate benefits, emitting up to 70% more life-cycle greenhouse gases than ships powered by conventional marine fuels, when methane leaks and upstream emissions are included
Wind Power: Old Technology, New Applications
Wind power is making a comeback in shipping:
Modern Wind Assist Technologies
- Automated kites: Airseas, the maritime unit of France’s Airbus, has developed a gigantic, automated kite called Seawing, which essentially tows a ship. The wind-assist technology, Airseas claims, can reduce fuel consumption by an average of 20%
- Wing sails: Michelin is testing its inflatable, retractable, automated wing sail mobility prototype on a ferry running between the U.K. and Spain
- Rotor sails: Spinning cylinders that use wind to provide forward thrust
- Rigid sails: Modern versions of traditional ship sails with automated controls
Electric and Hybrid Propulsion
- Battery electric: Perfect for short routes and ferries
- Hybrid systems: Combine diesel engines with electric motors
- Fuel cells: Convert hydrogen or methanol directly into electricity
- Shore power: Plug into electric grids while in port
Nuclear Power: Zero Emissions, Big Questions
Nuclear energy, which has driven naval vessels since the mid-1950s and is getting some attention as it generates zero emissions, though safety and security concerns are major impediments.
- Small modular reactors (SMRs): Safer, smaller nuclear plants designed for ships
- Zero operational emissions: No CO2 or pollutants during operation
- Security concerns: Risk of nuclear materials in commercial shipping
- Regulatory hurdles: Complex international nuclear shipping laws
💰 Incentives Driving Clean Shipping
Carbon Pricing Mechanisms
EU Emissions Trading System (ETS)
The EU is leading the charge with mandatory carbon pricing:
- Started 2024: Since January 2024, the EU’s Emissions Trading System (EU ETS) has been extended to cover CO2 emissions from all large ships (of 5 000 gross tonnage and above) entering EU ports
- Phase-in period: 2025: for 40% of their emissions reported in 2024; 2026: for 70% of their emissions reported in 2025; 2027 onwards: for 100% of their reported emissions
- Real costs: The inclusion of shipping markets in the EU ETS at the start of 2024 has added $10,000-$100,000 in carbon emission offset costs to dirty and clean tanker round-trip voyages
IMO Net-Zero Fund
The IMO Net-Zero Fund will be established to collect pricing contributions from emissions. These revenues will then be disbursed to: Support innovation, research, infrastructure and just transition initiatives in developing countries; Fund training, technology transfer and capacity building to support the IMO GHG Strategy; and Mitigate negative impacts on vulnerable States, such as Small Island Developing States and Least Developed Countries.
Government Subsidies and Support
Research and Development Grants
- Clean fuel development: Funding for hydrogen, ammonia, and methanol production
- Engine technology: Support for dual-fuel and zero-emission engines
- Infrastructure development: Grants for port charging and fueling stations
- Ship design: Funding for more efficient hull and propulsion systems
Direct Financial Incentives
- Clean fuel subsidies: Direct incentives can help shipowners adopt low-emission technologies and offset higher fuel costs
- Port fee discounts: The Port of Hamburg, which offers publicly funded discounts on port dues for a limited period of time to ships that meet certain emissions criteria
- Tax incentives: Reduced taxes for ships using clean fuels
- Loan guarantees: Government backing for clean shipping investments
Green Shipping Corridors
More than 20 “green shipping corridors” are being planned worldwide. These include routes between Asia and Europe, and across the Atlantic. These corridors will enable ships to refuel with green fuels and test low-emission technologies.
How Green Corridors Work
- Route-specific support: Focused investment in key shipping lanes
- Infrastructure development: Fueling stations and charging facilities
- Regulatory coordination: Aligned rules across different countries
- Industry partnerships: Cargo owners, ship operators, and fuel producers working together
Example: Australia-Japan Iron Ore Route
There is growing consensus among stakeholders on this route to decarbonize: already, 90 percent of the Australian iron ore exported to Japan is mined by companies with net-zero commitments, and Japanese steelmakers are exploring options to introduce green steel and to decarbonize their supply chains.
Regulatory Requirements
FuelEU Maritime Regulation
Coming into effect in 2025, this proposed regulation would establish requirements to gradually reduce the GHG footprint in the life cycle of ships, in terms of energy. It would require a gradual improvement of GHG intensity of the energy used, from 2% by 2025 (as compared to year 2020) up to 75% by 2050.
Zero-Emission Zones
- Norwegian fjords: Norway has introduced zero-emission requirements for cruise ships in its fjords by 2026
- Port requirements: Some ports requiring shore power connections
- Emission control areas: Special zones with stricter pollution limits
📅 Timeline: When Will Ships Go Green?
Short-term (2025-2030): Building the Foundation
2025 Milestones
- Technology readiness: Dual-fuel ammonia engines are currently at TRL4, with the technology validated in a test engine setting, but are expected to reach TRL9 around 2025
- IMO regulations: In April 2025, the Marine Environment Protection Committee 83rd session (MEPC 83) finalized a draft legal text for these measures, referred to as the “IMO Net-Zero Framework”
- EU requirements: FuelEU Maritime regulation takes effect
2030 Targets
- Carbon intensity: The 2023 IMO GHG Strategy envisages a reduction in carbon intensity of international shipping (to reduce CO2 emissions per transport work), as an average across international shipping, by at least 40% by 2030
- Alternative fuels: Alternative zero and near-zero GHG fuels: The Strategy sets a new level of ambition which relates to the uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources: they are to represent at least 5%, striving for 10%, of the energy used by international shipping by 2030
- Shore power: The regulation would also require that, from 2030 onwards, passenger and container ships at berth will be obligated to connect to on-shore electricity supply for stays longer than two hours
Medium-term (2030-2040): Scaling Up
- Infrastructure expansion: Green fuel production and distribution networks
- Fleet renewal: New ships designed for alternative fuels
- Technology maturation: Ammonia and hydrogen systems become routine
- Cost reductions: According to BloombergNEF, costs could drop by 2030 with scaling and technology advances
Long-term (2040-2050): Full Transformation
2050 Goals
- Net-zero emissions: Complete decarbonization of international shipping
- Fuel mix: According to projections in the Fourth IMO GHG Study 2020, about 64% of the total amount of CO2 reduction from shipping in 2050 will be achieved using alternative low/zero-carbon fuels
- Fleet transformation: Most ships running on green fuels or electric power
Key Implementation Timeline
IMO Net-Zero Framework Timeline
October 2025: Adoption of the amendments during an extraordinary session of the Marine Environment Protection Committee
Spring 2026: Approval of detailed implementation guidelines
2027: Expected entry into force, 16 months after adoption
2028: First calendar year for IMO Net-Zero Framework operation
💡 What Different Stakeholders Can Do
Ship Owners and Operators
- Immediate actions: Implement slow steaming and operational efficiency measures
- Short-term investments: Retrofit existing ships with efficiency technologies
- Long-term planning: Order new ships capable of running on alternative fuels
- Partnerships: Work with fuel suppliers to secure green fuel supply
Ports and Terminals
- Shore power: Install electrical connections for ships at berth
- Fuel infrastructure: Build facilities for hydrogen, ammonia, and methanol
- Incentive programs: Offer discounts for clean ships
- Efficiency improvements: Reduce truck emissions and energy use
Cargo Owners and Shippers
- Demand green shipping: Require carriers to use low-emission options
- Pay premium for clean transport: Accept higher costs for environmental benefits
- Supply chain optimization: Reduce overall transport needs
- Long-term contracts: Provide certainty for green shipping investments
Governments and Regulators
- Carbon pricing: Implement emissions trading or carbon taxes
- Research funding: Support development of clean technologies
- Infrastructure investment: Build green fuel production and distribution
- International coordination: Align policies across countries
🚨 Challenges and Obstacles
Technical Challenges
- Fuel storage: Challenges of storing hydrogen on board have not been solved
- Safety concerns: Any spilled ammonia is highly toxic
- Engine development: Need for new engine designs for each fuel type
- Infrastructure gaps: Limited availability of green fuels at ports
Economic Barriers
- High costs: Green hydrogen is currently 2-3 times more expensive than traditional marine fuels. Ammonia is also costly to produce at scale
- Investment needs: Shipping Toward Net Zero Needs $1 Trillion
- Uncertain returns: Risk of stranded assets if technology changes
- Competitive pressure: First movers face cost disadvantages
Regulatory Complexity
- International coordination: Need for global standards and rules
- Safety regulations: New rules needed for alternative fuels
- Port state control: Ensuring compliance across different countries
- Trade impacts: Potential for trade barriers and disputes
🌍 Global Impact and Benefits
Environmental Benefits
- Climate protection: New research commissioned by the High Level Panel for a Sustainable Ocean Economy (Ocean Panel) shows that measures to decarbonize shipping could result in annual emissions savings of 2 gigatonnes in 2050 — equivalent to taking over 400 million cars off the road every year
- Air quality: Reduced sulfur, nitrogen, and particulate emissions
- Ocean health: Less pollution from fuel spills and emissions
- Marine ecosystems: Protection of sensitive coastal and marine areas
Economic Opportunities
- New industries: Green fuel production, storage, and distribution
- Job creation: Manufacturing, maintenance, and operation of clean ships
- Innovation hubs: Research and development centers for maritime technology
- Export opportunities: Countries with renewable energy advantages
Social Benefits
- Health improvements: Reduced air pollution in port cities
- Energy security: Less dependence on fossil fuel imports
- Climate justice: Support for vulnerable countries through IMO fund
- Technology transfer: Sharing of clean technology with developing nations
🎯 Success Stories and Early Adopters
Maersk: Leading the Methanol Revolution
Maersk has followed this up with a slew of methanol-fuelled box ship deliveries, including, at the end of 2024, the news Maersk Halifax has been converted into a dual-fuel vessel able to operate on methanol – the first methanol container ship retrofit.
Japanese Shipping Companies
Other firms, like NYK Line and MOL from Japan, are testing ammonia-powered ships.
Energy Company Partnerships
Companies such as BP, Shell, and TotalEnergies are investing in hydrogen production and supply chains.
Industry Collaboration
In January 2024, the Global Maritime Forum announced that over 200 companies had joined efforts to decarbonize shipping, focusing on scalable fuel alternatives and supportive regulations.
💭 What This Means for You
As a Consumer
- Product costs: Goods may cost slightly more due to green shipping premiums
- Delivery times: Slow steaming might mean longer shipping times
- Environmental impact: Your purchases will have lower carbon footprints
- Choice power: Support companies using green shipping
As a Business Owner
- Supply chain costs: Factor in carbon pricing and green fuel premiums
- Logistics planning: Work with carriers offering low-emission options
- Competitive advantage: Market green shipping as a selling point
- Future-proofing: Prepare for mandatory emissions requirements
As an Investor
- Green shipping stocks: Companies developing clean maritime technology
- Alternative fuel producers: Hydrogen, ammonia, and methanol suppliers
- Port infrastructure: Facilities adapting for green fuels
- Stranded asset risk: Avoid companies dependent on fossil fuel shipping
🔮 Future Outlook: What’s Next?
Technology Trends
- Fuel cell advances: More efficient conversion of hydrogen and methanol
- Battery improvements: Longer range for electric ships
- Artificial intelligence: Optimized routing and operations
- Autonomous shipping: Unmanned vessels with perfect efficiency
Market Developments
- Green fuel scaling: Bloomberg further estimates that clean ammonia could represent 13% of global ammonia supply by 2030
- Cost reductions: Economics improving with scale and experience
- Infrastructure expansion: More ports offering green fuel services
- Fleet renewal: Older ships retired in favor of clean alternatives
Policy Evolution
- Stricter standards: Lower emissions limits over time
- Global coordination: International agreements on shipping emissions
- Carbon pricing expansion: More regions implementing emissions trading
- Green corridors: Dedicated clean shipping routes between major ports
Conclusion: Charting a Course to Clean Shipping
Reducing CO2 emissions from ships is not just an environmental necessity—it’s becoming an economic reality. With measures set to be formally adopted in October 2025 before entry into force in 2027 and technologies rapidly advancing, the shipping industry is at a turning point.
The path forward requires coordinated action from ship owners, ports, cargo owners, governments, and technology providers. Success depends on:
- Technology development: Scaling up production of green fuels and efficient ships
- Infrastructure investment: Building the ports and fuel networks for clean shipping
- Policy support: Carbon pricing, subsidies, and regulations that drive change
- Industry collaboration: Partnerships across the entire maritime value chain
The transition won’t be easy or cheap, but the benefits—for the climate, for air quality, and for the maritime industry’s long-term competitiveness—make it essential. With maritime trade volumes set to triple by 2050, emissions will only continue to rise unless the industry takes swift action to correct course.
The future of shipping is being written today, in the research labs developing new fuels, the shipyards building efficient vessels, and the ports installing charging infrastructure. By 2050, today’s efforts will determine whether shipping remains a major source of emissions or becomes a showcase for how entire industries can transform for the planet’s benefit.
Key Takeaways
Immediate action: Operational changes like slow steaming can cut emissions 20-30% today
Technology timeline: Ammonia engines available 2025, full transformation by 2050
Economic incentives: EU ETS and carbon pricing making clean fuels competitive
Global effort: Success requires international cooperation and massive investment
Your role: Support companies and policies that prioritize clean shipping
The journey to zero-emission shipping has begun. The question isn’t whether it will happen, but how quickly we can make it a reality.
