Navigating the Path to Zero-Emission Fuels in the Maritime Industry
Key Ideas
  • The International Maritime Organisation's new policy measures aim to drive a transition to scalable zero-emission fuels in the shipping industry.
  • Analysis suggests that ammonia will be the most cost-competitive option from the late 2030s, with e-fuels based on green hydrogen playing a crucial role in the industry's decarbonisation.
  • Further policy adjustments and incentives are needed to ensure early adoption and commercial viability of scalable e-fuels in the maritime sector.
  • Orders for dual-fuel ammonia vessels appear to be a competitive choice already, emphasizing the importance of investing in zero-emission options for the future.
A recent insight brief by the Getting to Zero Coalition and the Global Maritime Forum evaluates the effectiveness of the International Maritime Organisation's (IMO) new policy measures in driving the adoption of zero-emission fuels within the shipping industry. The report highlights the importance of meaningful incentives and penalties for compliance to ensure the success of the transition. By analyzing total cost of ownership (TCO) through modelling and stakeholder interviews, the brief emphasizes the necessity for the shipping sector to move towards scalable zero-emission fuels, particularly e-fuels based on green hydrogen. While current compliance pathways exist, the increasing stringency of regulations and penalties will encourage a shift towards sustainable fuel options. The analysis suggests that e-fuels, especially ammonia, hold significant potential for achieving long-term decarbonisation goals in shipping. However, early uptake and value chain development are imperative for their commercial viability. The study indicates that dual-fuel ships running on LNG and ammonia will be cost-competitive in the short term, with ammonia emerging as the most affordable option by the late 2030s. To encourage investments in e-fuel production facilities, the IMO guidelines must define rewards that ensure competitiveness. Policy adjustments are crucial to spur long-term investments and incentivize the shift towards zero-emission options. While some industry stakeholders are cautious due to regulatory uncertainties and limited fuel availability, adopting zero-emission solutions is deemed essential for the sector's future. The IMO's tiered compliance system and financial rewards for using sustainable fuels are steps in the right direction, but further developments are necessary to realize the industry's decarbonisation ambitions. The report underscores the importance of shaping regulations to drive investments in sustainable shipping practices for a greener future.
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