The global shipping industry is not on track to meet the target of having zero-emission fuels account for 5% of all fuels by 2030, jeopardizing its ambition of hitting net-zero emissions by 2050, a new report shows.
The third annual progress report “Progress Towards Shipping’s 2030 Breakthrough” warns that the majority of actors across the maritime ecosystem are moving too slowly to meet the internationally agreed target, with the next 12 months being critical to avoid shipping falling irreparably behind its climate goals.
The new report was issued by the UCL Energy Institute, UN Climate Change High-Level Champions, and the Getting to Zero Coalition (a Global Maritime Forum initiative).
The International Maritime Organization (IMO) has established a goal for zero- or near-zero emission fuels to account for 5% to 10% of all shipping fuels by 2030. Achieving the 5% target is crucial, as it represents the critical mass needed for the infrastructure, supply chains, and technology supporting zero-emission fuels to develop and expand rapidly. Failure to meet this 5% target could jeopardize the industry’s overarching goal of reaching net-zero emissions by 2050, the researchers note.
According to the report, production of scalable zero-emissions fuel (SZEF) currently in the pipeline could, under the more conservative scenario, end up covering less than half of the fuel needed to hit the 2030 target, while the current order book of SZEF-capable vessels would only deliver around 25% of required SZEF demand by the same year.
Finance for SZEF is also now ‘off track’ – a downgrade from 2023 – due to a slowdown in funding towards SZEF-related activities and more funding going towards fossil-fueled vessels.
“The speed at which the shipping industry adopts hydrogen-derived fuels will shape the success and the cost of this transition for decades to come,” Domagoj Baresic , Research Fellow at the UCL Energy Institute, said.
“Extensive adoption of such fuels by 2030 remains within reach but will require significant and immediate action by policymakers, fuel suppliers, and the shipping industry over the next 12 months. Without such action, the transition will be much longer, costlier and have a less positive environmental impact. All the ingredients for a rapid adoption already exist, but it is up to the relevant actors to make it a reality.”
Five key system change levers
The report identifies five key ‘system change levers’ for the industry and tracks their progress towards enabling the 5% goal. These include:
Civil society (partially on track) : The maritime industry has made good progress in improving the visibility of multiple issues that will help ensure a just and equitable transition, such as gender imbalance, lack of adequate seafarer training, and a lack of diverse voices in the fuel transition discussion. However, this now needs to translate into concrete actions leading to change. Razan Al Mubarak , the UN Climate Change High-Level Champion, emphasized that achieving the goal of limiting climate change to 1.5°C cannot be accomplished without the shipping industry contributing its share.
She noted that the sector must intensify its efforts within a short timeframe to align with a 1.5°C transition. Al Mubarak also expressed hope that the findings of the report would offer a practical and detailed roadmap for action to accelerate this transition, ensuring it is equitable and benefits workers and communities worldwide.
Meeting the goal is still achievable if action is stepped up
Of the 35 actions required to deliver the 2030 breakthrough, just eight are considered ‘on track’, while 13 have been classed as ‘off track’ – up from eight in last year’s edition of the report.
The remaining 14 are only ‘partially on track’. However, the report also stresses that meeting the goal is still achievable if action is stepped up. It points to strong progress on actions within in the ‘policy’ and ‘supply’ system change levers as examples of success, with hopes that strong GHG pricing and the fast delivery of announced production projects respectively could put both ‘on track’, according to the report.
“Increasing the use of zero-emission fuels is at the heart of decarbonising the shipping industry, but we are not seeing the progress required to meet our decarbonisation goals ,” Jesse Fahnestock , Director of Decarbonisation at the Global Maritime Forum.
He also pointed out that there is no time to waste and emphasized the need for a significant shift in momentum over the next 12 months to make the 2030 targets achievable.
Fahnestock explained that due to the long lead times required to implement policies, finance, and construct vessels and energy supply chains, the window of opportunity is only slightly open but still exists. In the end, he urged the maritime industry to take the report as a serious wake-up call for the sector to accelerate the necessary transformation.
A recent report published by Mario Draghi—former European Central Bank President— identifies shipping as one the most difficult sectors to decarbonize, requiring annual investments of €40 billion. The report also highlights the significant price gap between conventional and clean fuels, which for shipping can be up to five times more expensive. Shipping faces stiff competition from other transport modes for access to clean fuels, in particular advanced biofuels and e-fuels.
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