Why does this matter? Decarbonising the shipping sector offers an opportunity to drastically reduce global emissions and align with the Paris Agreement’s climate objectives.

Innovations such as Sofar Ocean’s Wayfinder platform, which uses real-time ocean data to optimise routes and minimise fuel consumption, exemplify how technology can drive transformative change. Additionally, the regulatory atmosphere is further incentivising the green transition for the shipping sector.

Two major policy changes are forthcoming – the EU’s FuelEU Maritime Regulation came into effect on the 1 January this year,  while the UK has proposed the inclusion of shipping in its Emissions Trading Scheme (ETS) by 2026 – which are pivotal in encouraging low-carbon practices.

A primary barrier to lower carbon shipping is cost. Fuels such as biomethane, produced from organic waste including manure cost nearly double that of liquefied natural gas – $21.03 per Gigajoule versus $11.90, respectively, making widespread adoption financially daunting. A second challenge to a green marine transition is the training required to safely and correctly use alternative fuels.

A computer-modelled study suggests that the shift requires upskilling an estimated 450,000 seafarers by 2030 to safely manage hazardous fuels like ammonia, expected to rise to 800,000 by the mid-2030s.

Technological gaps also compound the difficulty. New equipment for emissions reduction and fuel efficiency requires heavy investment without assured returns. Furthermore, regulatory uncertainties make it difficult for shipping companies to plan and attract capital for green transitions.

Despite these obstacles, industry collaboration is yielding promising results. The Zero Emission Maritime Buyers Alliance (ZEMBA), comprising major companies including Amazon and Ikea, is incentivising the use of low-carbon fuels by absorbing the cost premium.

Through this initiative, vessels operated by German Hapag-Lloyd travelling from Rotterdam to East Asia from 2025 will run on biomethane. This is expected to prevent 82,000 mt of CO2 emissions over two years.

The most promising alternative fuels to decarbonise the shipping sector are biomethane, ammonia and hydrogen. Biomethane, derived from organic waste, can reduce emissions by 90% compared to traditional marine fuels.

However, its cost and limited supply pose challenges. Green ammonia, a carbon-free fuel, is created by combining renewable hydrogen from water electrolysis and nitrogen separated from air in a modified Haber-Bosch process, powered entirely by renewable energy.

Ammonia and hydrogen are emerging as viable alternatives, though their adoption requires significant investment in safety measures and port infrastructure.

Beyond fuels, advancements in ship design and digital tools, such as real-time emissions monitoring, are critical to improving efficiency and sustainability.

Sofar Ocean’s global network of ocean sensors provides accurate weather forecasts and performance models, helping vessels optimise their routes. These innovations reduce emissions while offering a scalable solution for the industry.

The road ahead is increasingly defined by collaboration and regulation. The Maritime Decarbonisation Conference in Singapore in April may provide valuable insights into green financing trends and innovative solutions.

Meanwhile, the  FuelEU Maritime Regulation and the UK’s proposed expansion of the ETS will likely accelerate the adoption of low-carbon fuels and energy-efficient practices. Initiatives like the North Sea Green Shipping Corridor, a zero-emissions route, highlight the potential for transformative projects.

Extending carbon credit schemes to shipping could further incentivise investment in sustainable practices, unlocking new opportunities for the sector. Shipping has the potential to transition from an emissions-intensive industry to a global exemplar of sustainable trade.