Don’t become fixated on alternative fuels; close the infrastructure gap wherever possible. Ensure that all parties make binding investment commitments for a single trade route simultaneously, focus decarbonization strategies on specific vessel types, and opt for stable, coherent regulation rather than broad subsidies that offer only limited help everywhere.

These are the recommendations that Future Cleantech Architects (FCA), a German independent, non-profit and non-partisan climate think tank, is putting forward to EU policymakers and others to break the current deadlock among ports, shipowners and producers in the debate on decarbonizing maritime shipping.

Challenge is complex

Maritime shipping accounts for 2.3% of global CO₂ emissions, or approximately 900 million tonnes of CO₂, making it one of the most difficult sectors to decarbonize. The automotive sector can decarbonize relatively quickly by replacing petrol engines with electric motors and rolling out a nationwide charging network. Shipping, by contrast, requires a complete overhaul of vessel designs, bunkering infrastructure and the global energy system.

Because this challenge is so complex, experts such as FCA are focusing heavily on immediately applicable solutions, such as wind-assisted propulsion and hull efficiency, or on tailoring decarbonization strategies strictly to specific vessel types, power requirements and trade routes. This is the only way to reduce energy demand significantly now, while the alternative-fuel supply chain of the future is gradually taking shape.

A fragmented power bloc

According to FCA’s recent Shipping Factsheet, of that 2.3% of emissions, 86% comes from international shipping, 10% from domestic shipping and 4% from fishing activities.

Looking solely at tank-to-wake emissions – that is, what a vessel emits when fuel is burned on board – China is responsible for the largest share, at 17%. The European Union follows with 14%, or roughly 145 million tonnes of CO₂. The United States ranks third, at 9%. Japan, South Korea, Australia, Singapore and Brazil each account for 4%; India accounts for 3%; and Malaysia and Indonesia each account for 2%. Almost a third of emissions come from numerous smaller countries, each accounting for less than 2%.

This fragmented power bloc clearly illustrates why introducing and enforcing international environmental regulations is a political and administrative minefield that leads to slow decision-making.

While the EU imposes strict requirements on supply chains through the EU ETS and FuelEU Maritime, exporting economies such as China and Brazil fear that strict climate rules and emissions charges will make their products more expensive and less competitive on the global market.

A large part of the fleet also sails under flags of convenience, such as those of Panama, the Marshall Islands or Liberia. This allows shipping companies to circumvent regulations relatively easily by switching to other jurisdictions. Since emissions are so widely dispersed, no single region can solve the problem on its own; ambitious global rules through the International Maritime Organization (IMO) are essential.

Count the fleet, not the fuel

In fact, five vessel types account for 75% of all maritime CO₂ emissions: bulk carriers, oil tankers (including chemical and LPG tankers) and container ships. According to FCA, regulations should be designed for each vessel type. Since 91% of the world’s operating tonnage still runs exclusively on conventional fuel oils, the debate over ‘which fuel will win’ is premature.

In addition, the sector currently consumes barely 1 million tonnes of oil equivalent (Mtoe) of low-carbon fuels per year, whereas 280 Mtoe would be needed for full decarbonization.

With around 13,000 vessels, bulk carriers make up the largest fleet and transport almost 1 billion tonnes of goods annually. There are approximately 6,000 container ships. As this is the fastest segment, each vessel requires more than three times the engine power of a bulk carrier. Cruise ships form the smallest segment, with around 960 vessels, but consume considerable amounts of energy for passenger transport, averaging 18 megawatts per ship.

Changing demand: fewer fossil fuels, shorter supply chains

Except for cruise ships, the vast majority of shipping transports physical goods—and on a massive scale: more than 80% of global trade by volume is carried by ship, making maritime transport the backbone of international trade. Air freight accounts for less than 1% of total global trade by volume (measured by weight).

But the nature of that trade is on the verge of changing. As the global energy transition progresses and energy supplies shift towards renewable sources and localized grids, international trade in fossil fuels will structurally decline. This will directly affect specific vessel categories, including oil tankers, LPG carriers and bulk carriers focused on the coal trade.

Furthermore, production activities are increasingly shifting towards domestic markets, and supply chains are becoming much more localised. This reshaping of global trade has two drivers: countries seek to strengthen national self-sufficiency while reducing transport costs in response to persistently high fuel prices.

As a result, the need to transport manufactured goods over very long distances is likely to decline over time, fundamentally reshaping demand for container shipping by sea and air.

Slow steaming

Today, all ships can directly reduce their energy consumption through operational efficiency measures such as slow steaming. Reducing a vessel’s speed by just 10% can already cut CO₂ emissions by 20% to 25%.

Wind power is also making a strong comeback as an additional means of propulsion. Among wind-assisted propulsion systems (WAPS), rotor sails and suction sails are leading the way. In favorable weather conditions—such as on long transatlantic routes or in the Pacific, where the wind can blow freely—these systems can deliver fuel savings of up to 30% per nautical mile.

It is important to note, however, that this technology is not suitable for every type of vessel. Wind-assist equipment on deck is impractical for large container ships, for example, because that space is already fully reserved for cargo. Tankers, bulk carriers and general cargo ships, on the other hand, can make optimal use of these systems. More than 150 vessels worldwide are already operating with wind propulsion systems or have such systems on order.

Electric ships and nuclear-powered container ships

For shorter routes of up to around 1,000 nautical miles, fully battery-electric propulsion is already technically the best and quickest option. Opportunities are emerging even on longer routes.

A container ship sailing from Algeciras in southern Spain to Sfax in Tunisia could reduce its emissions by 30% without sacrificing cargo space by making a strategic stop in Skikda, Algeria, to swap batteries.

COSCO Shipping is already using battery swapping on longer routes in China. The company has launched a 120-meter battery-powered container ship with a capacity of up to 700 TEU. It operates on the Yangtze River between Nanjing and Shanghai, covering a distance of approximately 965 km. Specialized inland ports along this route are equipped with infrastructure for swapping and charging the battery containers.

If all small vessels were fully electrified – a segment in which innovation often takes place first – that alone would deliver a reduction of 36 million tonnes.

Nuclear power at sea is no longer science fiction either: more than 160 military vessels and icebreakers worldwide are already nuclear-powered. The big question, however, is whether this technology can also make the transition to the commercial shipping fleet. The potential is enormous, but so are the obstacles.

For commercial shipping, attention is turning to fourth-generation small modular reactors (SMRs). Two 35-megawatt reactors could power a container ship with more than 10,000 TEU of capacity with zero emissions, at least on a tank-to-wake basis. Since enormous fuel tanks would no longer be needed, ships could gain around 5% in cargo capacity, travel up to 12 knots faster, and carry up to 38% more cargo per year.

Some companies are already seriously exploring nuclear propulsion, including the Dutch-Swiss offshore company Allseas, which is working with high-temperature gas-cooled reactors.

Nevertheless, a commercial breakthrough remains uncertain due to extremely high costs, the lack of an IMO regulatory framework, and pressing questions surrounding nuclear waste and proliferation.

LNG: a climate blunder

Forcing the shipping industry to switch to green fuels at present would lead to bankruptcies without billions in subsidies. Worldwide, 91% of the fleet uses fossil fuel oils. The reason is simple: although they generate substantial emissions, they offer superior energy density, are inexpensive and are readily available.

LNG is currently the most popular transitional option. Although LNG can, on paper, reduce emissions by up to 25% and help shipping companies comply with FuelEU Maritime, in practice it is a climate blunder.

However, these gains are canceled out by unburned natural gas (methane) escaping along the supply chain. This leakage of unburned methane is known as methane slip. Over 20 years, methane is more than 80 times as potent as CO₂, meaning that, in practice, sailing on LNG can be more harmful to the climate than using traditional fuel oil.

Furthermore, because LNG carriers use boil-off gas as free fuel, there is little incentive to move decisively towards genuinely clean alternatives. LNG consumption in Europe doubled between 2018 and 2023, locking shipping companies into fossil-fuel infrastructure for decades and delaying the transition to truly clean fuels or wind assistance.

Grey methanol and grey ammonia offer no solution either, since both are derived from fossil sources. Ammonia also poses serious safety risks because of its extreme toxicity to marine life. Handling it requires much stricter containment and safety protocols than those for conventional fossil fuels, hydrogen, or methanol. Despite these limitations, the Antwerp-based shipping company CMB.TECH recently launched the world’s first dry bulk carrier powered by green ammonia.

Biofuels face a hard limit: the supply of sustainable feedstocks is insufficient to meet maritime demand, especially given competition from aviation (sustainable aviation fuels, or SAFs). E-fuels offer a way forward, but currently cost six to seven times as much as heavy fuel oil.

Fuel oil still dominates the orderbook

This cost and availability picture is clearly reflected in the 2025 orderbook. Although shipowners are cautiously moving away from ships running solely on fuel oil, they are opting mainly for LNG (407 new vessels) and methanol (134 new vessels). LPG, ammonia and hydrogen each account for fewer than 20 vessels.

Most of these are dual-fuel vessels. The sobering fact remains that almost 2,200 of the ships newly ordered for 2025—around 78% of the total orderbook—will still run on conventional fuel oil.

No silver bullet, but there is hope

In short, the maritime energy transition is trapped in a classic chicken-and-egg situation. Since investments in shipping run into billions and remain in place for decades, none of the three parties involved—shipping companies, ports and fuel producers—dares to make the first move.

Shipping companies do not want to order expensive vessels running on new e-fuels unless they are certain they can refuel them anywhere in the world. If a ship cannot bunker in Singapore or New York, a billion-euro investment is left stranded.

Producers will not build gigantic plants for renewable electricity, hydrogen and e-fuels unless guaranteed, large-scale offtake agreements are on the table.

Ports, for their part, refuse to invest billions of euros in bunkering infrastructure as long as there are hardly any ships using it.

As for port bunkering infrastructure for alternative fuels, the picture closely mirrors the previously mentioned shipowner orderbook: LNG and shore-side power dominate and are widely available, with operational facilities in almost all major ports worldwide. Infrastructure for truly zero-emission fuels, by contrast, remains very limited.

To break this cycle, FCA advocates the rapid development of green corridors: agreements between ports and shipping companies for specific routes to ensure that infrastructure and vessels are aligned. Rotterdam has already demonstrated that ports can do this by receiving the first methanol bunkering vessel and conducting a successful, leak-free ammonia bunkering pilot in 2025.

As FCA puts it, there is no silver bullet for decarbonizing shipping. But by focusing on smart hybrid solutions, wind assistance, and targeted corridor agreements, the sector can already save hundreds of millions of tonnes of CO₂ per year.