Skip to main content
The maritime shipping industry is responsible for around 3% of global carbon emissions. In April 2025, the International Council on Clean Transportation published a report showing that while CO₂ emissions remained relatively stable between 2022 and 2023, the average intensity of CO₂ has decreased, and there has been a significant reduction in heavy fuel oil use since 2020.
In 2020, the International Maritime Organization introduced a lower limit on the sulphur content permitted in shipping fuel oil. Since then, the industry has shifted from high-sulphur fuels to lighter alternatives, with some projects even utilising wind power to reduce fuel consumption. The shipping sector is actively working to reduce its carbon footprint and decarbonise. The approach is evolving, with growing emphasis on moving away from carbon-based fuels altogether. As a result, fossil fuel alternatives are attracting increasing attention.
Although there is no unified international strategy, policies are beginning to take effect, and shipowners must now respond. The UK Government has set a target for the shipping sector to be net-zero and carbon-free by 2050. At London International Shipping Week this September, the Government announced a £1.1 billion investment aimed at accelerating green technology in coastal towns and cities, supporting its marine decarbonisation goals. Meanwhile, the EU has introduced a double taxation regime through the FuelEU Maritime Regulation and the EU Emissions Trading System, requiring polluters to pay for their greenhouse gas emissions.
Shipowners and charterers face complex decisions about which fuel products to adopt. The first step is transitioning to carbon-reduced fuels while assessing which options are most cost-effective.
What to Consider When It Comes to Fuel
Several alternatives to fossil fuels are now available, but different ships will require different fuels, and certain issues remain unresolved. The main alternative fuels are briefly outlined below, though shipowners must still consider key factors when deciding which fuel type best suits their vessels.
Alternative Greener Fuels:
| Alternative Fuel | Pros | Cons | |
| Biofuels | A) Biodiesel: Fatty Acid Methyl Ester (FAME) | Made from methanol and oil, it is both biodegradable and renewable. | Still produces nitrogen oxide (NOx) emissions. More expensive, and there is competing demand. |
|---|---|---|---|
| B) Green diesel: Hydrotreated Vegetable Oil (HVO) | Made from biomass and algae, so it is biodegradable and has lower NOx and sulphur oxide emissions. | Due to the low sulphur content the fuel will have more friction when it is in motion, resulting in wear of the vessel’s tanks. There are also food security concerns and a competing demand. | |
| HydrogenWell known for producing zero harmful emissions.It requires larger storage tanks, which will reduce cargo capacity. It is also highly flammable. | |||
| AmmoniaDoes not contain carbon and is easier to store and transport.It can produce other emissions (including NOx) and is infamous for its toxicity, so there are serious safety concerns with its usage. | |||
| MethanolHas fewer safety concerns, and it is easier to store.The pricing and availability of this fuel remain an issue. | |||
| Liquefied Natural Gas (LNG)A more affordable way to gradually reduce emissions in the industry.The natural gas must still be extracted and then cooled and stored at freezing temperatures, meaning it is not the greenest of fuels. | |||
| Electric (batteries)Such ships will operate with zero emissions.How the electricity is produced and sourced will impact whether this is a greener alternative. Battery storage technology will be required, and a risk of fire remains. There is also competing demand. | |||
Key Points to Consider
- Modification: Ships may need to be modified or retrofitted with new technologies to accommodate different fuel types and storage methods.
- Bunkering & Storage: Some fuels require increased tank capacity, which can reduce cargo space and affect profitability. Certain fuels also have specific storage requirements.
- Fuel Availability: Shipping routes may not align with fuel availability, meaning alternative fuels may need to be stored onboard, impacting profitability.
- Ports & Infrastructure: Ports must develop supply chains for alternative fuels and work with shipowners and suppliers to ensure effective delivery systems.
- Competitors & Cost: Lower carbon intensity often means higher costs. With other sectors like aviation and road transport also seeking greener fuels, demand for resources is high.
What the Future May Bring
The shift to greener, carbon-reduced fuels is already underway, and the maritime industry must continue transitioning to alternative fuels to decarbonise. Whilst greener fuels are now available, investment in such fuel projects is essential. Without government support (as seen in the UK), shipowners will need to bear the costs and this will directly impact charterers too.
Regulations will become stricter over time, so shipowners should act now to comply and avoid future penalties. Engaging with fuel producers and exploring available products is a vital first step.
The marine industry is versatile and resilient. With international collaboration, there is hope that it can transition to greener fuels and achieve net-zero status. We have the tools, resources, and scientific backing, so now governments, shipowners and maritime institutions alike need to invest in projects to fuel decarbonisation and get to a position where greener fuels are considered a commodity rather than a burdensome requirement.
Need advice on marine fuel regulations or transitioning to greener alternatives?
Our Shipping, Logistics & Energy team is here to help. Get in touch to discuss how we can support your business through the evolving regulatory landscape and fuel transition.
