Alternative fuels are not developing within a stable regulatory framework. Global IMO requirements, regional systems such as FuelEU and EU ETS, and national incentive and safety regulations all interact simultaneously. Waiting for full clarity means losing time.
Committing too early to a single fuel risks stranded investments.
Newbuild programmes, midlife retrofits, tank layouts and machinery concepts require long lead times. Operators should distinguish between irreversible and reversible decisions.
Robust strategies begin with fleet segmentation. Vessels with short remaining service lives need a different logic than newbuilds.
Shore teams should translate uncertainty into concrete checkpoints: which vessels are most exposed, where are data gaps and which ports offer bunkering options.
The regulatory environment for alternative marine fuels consists of three overlapping layers. Globally, the IMO sets the framework: the revised GHG strategy from MEPC 80 (2023) tightened the target to net-zero “by or around 2050,” with interim targets of at least 20 % (striving for 30 %) reduction by 2030 and 70 % (striving for 80 %) by 2040, each relative to 2008 levels. The concrete implementation into binding instruments – particularly a Global Fuel Standard (GFS) and a possible GHG levy – is being negotiated at MEPC sessions 83, 84 and 85.
Regionally, the EU has raised the bar with FuelEU Maritime (Regulation 2023/1805) and the inclusion of shipping in the EU ETS from 2024. FuelEU Maritime mandates a stepwise reduction of well-to-wake GHG intensity from 2025: –2 % from 2025, –6 % from 2030, –14.5 % from 2035, –31 % from 2040, –62 % from 2045 and –80 % from 2050. These values reference the EU baseline of 91.16 gCO2eq/MJ. The EU ETS captures 100 % of intra-European voyages and 50 % of voyages to/from Europe from 2024.
Nationally, further layers are added: individual flag states can impose stricter requirements, port states can issue emission requirements for visiting vessels, and national incentive mechanisms influence the economics of specific fuel pathways. Norway, for instance, supports ammonia and hydrogen projects in coastal shipping, Japan backs ammonia co-firing, and the US offers tax credits for clean fuels under the Inflation Reduction Act.
The problem for operators: these three layers do not develop in sync. IMO negotiations can be delayed, EU regulation runs ahead, and national measures vary widely. A vessel ordered today and delivered in 2028 must comply with rules that in many cases have not yet been finalised. This forces scenario planning rather than point forecasts.
The principle of “no irreversible decisions without a solid data basis” sounds simple but is difficult in practice. Newbuilds typically have a 24–36 month lead time between ordering and delivery. The machinery concept, tank layout and fuel system must be fixed at the outset – changes after steel cutting are extremely expensive.
Practical hedging strategies include: dual-fuel capability as a flexibility reserve (approximately 5–15 % additional CAPEX but protection against fuel pathway risks), fuel-ready preparation for fuels that are not yet market-ready (approximately 3–8 % CAPEX), and modular system architectures that enable later retrofits.
For fleet segmentation, we recommend a three-class approach: first, vessels with fewer than 5 years of remaining service life – operational measures suffice here (slow steaming, voyage optimisation, biofuel blending). Second, vessels with 5–15 years remaining – targeted retrofits and efficiency measures make sense. Third, newbuilds – here the fuel strategy must cover the entire lifespan through to 2050+.
The cost of uncertainty is real: operators who wait too long risk higher yard costs due to capacity bottlenecks, longer lead times for key components, and lower charter rates for non-compliant vessels. The cost of inaction in many cases exceeds the cost of an “imperfect” decision.
Strategies diverge significantly by segment and company size. Large container lines such as Maersk and CMA CGM committed early to specific fuels – Maersk to methanol, CMA CGM to LNG. These companies can afford to choose a pathway and help shape the infrastructure. Smaller operators do not have this luxury.
In the bulker segment, we observe a wait-and-see approach with increasing fuel-ready preparation. Many newbuilds are being ordered with LNG-ready notation to keep the option open without committing to the full investment today. In the tanker segment, interest in methanol and LPG as dual-fuel options is growing.
The approach of Scandinavian shipowners in the short-sea sector is particularly instructive. Here, ammonia and hydrogen pilot projects are being advanced with government support, generating valuable operational experience. The results of these projects – expected from 2026/2027 – will improve the decision basis for the broader market.
Time pressure is mounting: FuelEU Maritime takes effect from 2025, EU ETS obligations grow annually, and CII ratings are tightening. Operators without a strategy are coming under increasing pressure – not only regulatory but also in the charter market and in financing.
Inventory your exposure: Which vessels trade in EU waters? Which have the poorest CII ratings? Which have the longest remaining service life? These are your priority vessels.
Separate reversible from irreversible decisions: Biofuel blending is reversible. A tank layout conversion is not. Concentrate irreversible decisions on areas where the data basis is most robust.
Plan in scenarios: At least three: optimistic (rapid IMO agreement, green fuels quickly available), base case (gradual tightening, mixed availability) and pessimistic (delays, price shocks).
Red flags: Be wary of advisers promoting a single “right” fuel. The honest answer is: there is none. There are only more robust and less robust strategies.
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