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This summer, an ammonia-powered ship completed its maiden voyage in eastern China, becoming the first of its kind to run purely on the carbonless compound. Around the same time, in Denmark, the shipping giant Maersk launched a big container ship that can use methanol, making it the fourteenth and largest vessel yet in the company’s growing low-carbon fleet.
Efforts like these are playing out worldwide as the maritime industry works to replace dirty diesel fuel in oceangoing ships, which haul everything from T-shirts and tropical fruit to solar panels, smartphones, and steel rebar. But the progress to date has been piecemeal, representing only a sliver of the world’s oil-guzzling freighters and tankers.
Up until last week, the United Nations’ International Maritime Organization appeared on the cusp of approving a strategy to supercharge shipping decarbonization worldwide. The plan was set in motion in 2015, after the U.N. adopted the Paris Agreement, clarifying the urgent need for countries and companies to reduce planet-warming pollution to zero.
“It sent a signal for the [maritime] industry to start thinking ahead,” said Narayan Subramanian, an expert on international climate policy and clean energy finance at Columbia Climate School.
In the ensuing decade, the IMO worked to hash out regulations that could jumpstart a universal transition toward cleaner ships. The agency landed on the Net-Zero Framework, which would require ships to use more low-carbon fuels and also establish a tax on carbon emissions — setting the first binding carbon-pricing scheme for an entire industry.
“This is not coming out of left field. It’s not being imposed overnight,” Subramanian said last week before IMO officials put the framework to a vote.
Yet on Oct. 17, after a full-throttle offensive from the Trump administration, the IMO moved to delay making any decision on the landmark decarbonization strategy by one year, keeping the industry locked in limbo. Many fuel producers, shipbuilders, and cargo owners have said they need reassurance that shipping is, in fact, charting a cleaner course before they invest billions of dollars in making new fuels and building related infrastructure.
“There is a lack of incentive globally for shipping operators to use clean fuels,” said Jade Patterson, an analyst for the research firm BloombergNEF. He said the framework would improve the business case for using hydrogen-based fuels like ammonia and methanol, which are significantly more expensive than oil- and gas-based fuels.
A smaller group of IMO members is meeting in London this week to drill down on the finer details of the proposed regulations, which will come up for a vote again in October 2026. But it’s unclear whether any global environmental agreement can succeed while President Donald Trump is in office.
In the meantime, the industry will continue guzzling greater volumes of fossil fuels as shipping activity grows over time.
Tens of thousands of merchant ships ply the oceans every year to haul roughly 11 billion metric tons of goods. Together, they’re responsible for about 3% of the world’s annual greenhouse gas emissions.
The Net-Zero Framework was meant to give teeth to the nonbinding climate goals that IMO adopted in 2023. Member countries set near-term targets for reducing cargo-ship emissions by at least 20% by 2030, compared to 2008 levels. They also called for curbing emissions by at least 70% by 2040, and for reaching net-zero emissions “by or around” 2050.
Countries further agreed to have 5% to 10% of shipping’s energy use come from zero- or near-zero-emissions fuels and technologies by 2030.
Current adoption of those fuels amounts to a tiny droplet in an ocean’s worth of oil. Much of it is driven by voluntary efforts by companies like Maersk, which face pressure from investors and customers to clean up their fleets. Meanwhile, regional environmental policies are taking effect. European nations and China are working to rein in ship-engine pollution, and they and other countries — including Brazil, India, and, until recently, the United States — are steering government funding into hydrogen production.
Hydrogen is a key component of ammonia and methanol — two common chemicals that can be used in engines or fuel cells. How clean those fuels actually are depends largely on whether the hydrogen is produced using renewables, or the way that most H2 is made today: with fossil fuels. Renewable diesel, another lower-carbon option for powering vessels, also uses hydrogen in its production process.
If every project to produce green ammonia, green methanol, and renewable diesel comes online as planned, and if the fuels only go toward powering ships — not airplanes or vehicles or to other uses — they would make up less than 20% of global shipping’s fuel needs in 2030, which are expected to reach 290 million metric tons that year, Patterson said.
Those are two enormous “ifs.” Many of the announced fuel projects are facing serious headwinds, including high inflation, soaring production costs, and the Trump administration’s steep tariffs and clean-energy funding cuts. IMO’s recent decision to punt on its net-zero vote only deepens those challenges.
Last year, Danish energy giant Ørsted canceled plans to build a green-methanol plant in Sweden, citing weaker-than-expected interest from the maritime sector. Another Ørsted methanol project in Texas is facing uncertainty after the U.S. Department of Energy in May revoked an award of up to $99 million for the facility, as part of sweeping cuts to the Office of Clean Energy Demonstrations. In the Netherlands last month, Shell said it is abandoning construction on a biofuels plant in Rotterdam owing to the fuel’s lack of competitiveness.
“What we’ve seen is that this lack of demand and the shift in policy has led many projects to fold,” said Ingrid Irigoyen, president and CEO of the Zero Emission Maritime Buyers Alliance. “But that’s not because they weren’t good projects. These are good fuels that we need, and which are vastly scalable.”
The buyers alliance is a nonprofit group of about 50 multinational companies that helps negotiate clean-fuel contracts — including for waste-based biomethane — between producers, vessel operators, and firms that put their goods on ships. Irigoyen said such voluntary initiatives are meant to be a “catalyst” that helps to scale production and bring down costs of alternative fuels, not the sole engine of shipping decarbonization.
“We can’t do it alone,” she added.
Even as shipping-industry groups and climate experts push for a global policy, there’s still widespread disagreement about how the framework should work in practice. Environmental groups oppose including crop-based biofuels, like soy and palm oil, given that their production can lead to forest loss and increase overall emissions. Policy analysts note that the ripple effects of higher fuel costs and carbon taxes across supply chains could disproportionately affect small and developing economies.
As IMO members navigate those questions, shipbuilders and owners are holding their breath for the answers.
This year, the number of new orders for alternative-fueled vessels has markedly declined compared to last year as companies adopt a “wait and see” approach, according to Jason Stefanatos, global decarbonization director at DNV.
In September, the advisory firm recorded no fresh orders for ships capable of running on methanol or ammonia, though nearly 360 methanol ships and nearly 40 ammonia ships are on the books through 2030.
Subramanian noted that vessels and port equipment are often designed to last for decades, and that many shipping firms are at the point of deciding whether to invest in a status-quo fleet or the next, cleaner generation.
Decarbonization “is a very natural opportunity to upgrade shipping infrastructure that’s otherwise been around for 30 or 40 years,” he said. “And the investment-certainty piece is key to that.”
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