International Shipping

International shipping needs to rapidly shift away from the heavy fuel oil (HFO) currently powering global shipping to scalable zero-emission fuels (SZEFs) and improving the operational efficiency of the fleet. This means switching out existing ships with ones that can run on zero-emission fuels, scaling up the production and supply of zero-emission fuels, and upgrading port infrastructure to accommodate zero-emission fuels and zero-emission fuel ships.

Scalable Zero-Emission Fuels (SZEFs)

Scalable Zero-Emission Fuels, which include hydrogen, ammonia, e-methanol, and batteries, qualify as zero-emissions only if produced from renewable energy. E-methanol requires CO₂ capture to be carbon neutral (Baresic et al., 2022; Osterkamp et al., 2021). The IMO’s 2023 Revised Strategy calls for 5%, striving for 10%, zero or “near-zero” fuels by 2030, but the inclusion of “near-zero” options has facilitated LNG’s growth. Battery‑electric propulsion is technically feasible today and is already deployed on short‑range vessels (including container ships on inland/coastal routes) (MMMCZCS, 2024). With the falling costs of batteries, battery powered container shipping covering short haul intra-regional trade can be economical this decade. It is estimated that battery electric ships can transport 40% of trade (in terms of tonnages of goods transported - TEU not voyages) with existing technology (Kersey et al., 2022).

False Solutions: LNG is not a transition fuel

Orders of LNG-fuelled vessels have seen a marked increase; an alarming trend (DNV, 2024), as LNG is not a viable option for reducing emissions from shipping. Studies show that the adoption of LNG may increase international shipping’s climate impact when the whole life cycle of all greenhouse gases are considered (Pavlenko et al., 2020; Smith, Perico, et al., 2025). Investments in LNG facilities are also growing, which may lead to stranded assets and perpetuate a carbon “lock-in” effect, as LNG-based ship fleets and onshore infrastructure would make the transition to low-carbon fuels more difficult.

In the shipping sector, LNG is often falsely presented as a transition fuel. As of 2022, the number of ships on order designed to run on LNG or LPG totalled 474 vessels, while the orders for hydrogen and methanol driven vessels were much lower at 3 and 5 respectively (DNV, 2022).

If the IMO’s Net Zero Framework (NZF) was in place, direct compliance fuel GHG intensity targets would have ensured that ships using LNG would not meet compliance. Therefore, no surplus units (i.e. credits) could be banked for compliance. However, the threshold set by the base target pathway is still high enough for LNG to be compliant in the near term, risking its continued use (Smith, Frosch, et al., 2025; Transport & Environment, 2025).

Pathways to decarbonising international shipping

SZEF’s share must reach 5% by 2030, 27% by 2036, and 100% by 2050 to align with 1.5°C compatible pathways (IMO, 2023b; Osterkamp et al., 2021).

• Today, 98% of the fleet runs on heavy fuel oil, 2% on LNG/LPG, with only 0.09% methanol-capable, and just three hydrogen and one ammonia-fuelled ships (DNV, 2024). In 2022, 60% of new orders were dual-fuel (MMMCZCS, 2022).
• Ammonia is projected to dominate the zero-emission shipping fuels. Studies analysing rapid transition scenarios show ammonia will account for ~15% by 2030, >60% by 2040, and >80% of fuels beyond 2042, with hydrogen minor onboard but important in the upstream production of ammonia (MMMCZCS, 2021; Smith, Perico, et al., 2025). Gradual or delayed pathways still foresee ammonia >55% by 2050, complemented by biofuels (35%) and e-fuels (5%) (MMMCZCS, 2021).

Technology readiness varies. Batteries are ready for short-sea routes but not large ships. Biofuels and methanol are already commercially viable and will fully mature by 2030. E-methanol is expected to scale by 2030. Green hydrogen and ammonia are commercially viable but need infrastructure integration, with ammonia about five years behind hydrogen (Ricardo & DNV, 2023). Both can work in combustion and fuel cells, but are not yet viable for retrofits (MMMCZCS, 2025). Ammonia production is close to maturity, but challenges remain for storage, safety, and onboard handling.

HFO ban impacts are minimal without further action

In June 2021, the IMO approved a ban of HFO in the Arctic through amendments to MARPOL Annex VI. In July 2024, the ban came into effect. However, the resulting impact was not as positive as the ban intended to be. Ships have consequently shifted to very low sulphur fuels (VLSF) and ultra-low sulphur fuels (ULSF), which could have wider environment impacts to the marine environment and biodiversity in the event of spills as these fuels are more difficult to clean up. Additionally, while these fuels are lower in sulphur, the resulting reductions in GHGs is expected to be minimal due to exemptions to ships which could last to 2029 (Arctic Council, 2024; The Canadian Press, 2020).

There are several operational and technological options to reduce emissions. The operation of ships and maritime transport systems constitutes operational measures, while their properties—such as design, size, machinery, engine, and fuel type—constitute technological measures.

Studies have shown that the emissions reductions potential from measures focusing on increasing machinery efficiency and wind assistance—together with optimising the ship design—could increase energy efficiency from 30% to 50% for newly built ships compared to the existing fleet (Energy Transition Commission, 2019).

The highest potential for energy efficiency improvement comes from speed limits and cargo space utilisation for the technological measures, while it comes from the use of wind assistance technologies (modern sail powered ships) when operating the ship (Baresic et al., 2024). Other operational measures include improving the ship-port interface by reducing the ship waiting time before entering a port and providing onshore power facilities while ships are in ports allowing to turn off their engine (ITF, 2018).