Robert Wright, Social Policy Correspondent at Financial Times, as part of the FT Rethink series, explained the shipping industry’s challenges in decarbonizing – as its structure and apprehensive shipowners can hinder progress.
The shipping industry moves about 90% of global trade by volume and contributes roughly 3% of the world’s carbon emissions, making it one of the most difficult sectors to decarbonize. The industry is incredibly diverse as some companies operate hundreds of containerships, while others are small with just one or two dry bulk carriers or oil tankers. Any plan to reduce emissions should work for both large and small operators.
Furthermore, different types of ships also operate in very different ways. Large containerships usually travel fixed global routes so adopting a new fuel type is possible if it’s available at key ports along the way.
However, smaller vessels like bulk carriers function more like taxis, going wherever they’re needed, and their operators are unlikely to adopt a new fuel unless it is readily available everywhere.
The United Nations’ International Maritime Organization (IMO), is the regulatory body overseeing the sector’s decarbonization efforts. The IMO has stated it wants the shipping industry to reach net-zero emissions by 2050. It also recently finalized rules taking effect in 2027,during the Marine Environment Protection Committee (MEPC) which met for its 83rd session in person at IMO Headquarters in London from 7 to 11 April 2025.
Several potential solutions have been considered for the industry’s journey towards decarbonization but most come with significant challenges. Ships could switch to methanol, which is expensive; ammonia, which is toxic; or hydrogen, which requires large storage space. Some companies are also experimenting with advanced sail technology, while others are using liquefied natural gas (LNG).
Furthermore, one of the major concerns among shipowners is the risk of investing in a new fuel technology that may not be supported by infrastructure or future regulations. There’s also the issue of fairness, as cleaner fuels are more expensive and companies that continue using conventional fuel could undercut those that invest in greener alternatives.
Despite these challenges, there are signs of progress. Since January 2024, shipowners have been required to pay for their emissions when entering European ports. This has influenced the way voyages are planned, with an eye toward reducing carbon output.
Additionally, new ships capable of running on ammonia or methanol emerged from shipyards in Asia in 2024.
Ultimately, the future of clean shipping is uncertain. If effective and enforceable rules are implemented with the right incentives, the industry is likely to invest in decarbonization.
However, if the regulatory process fails or stalls, the risk remains that ships will continue contributing to climate change for decades to come.
