- Despite the IMO’s Net Zero Framework, shipping remains off track to meet the 2030 target of 5–10% zero-emission fuel adoption.
- Technology for scalable zero-emission fuels (SZEF) is advancing, but demand for SZEF-capable vessels and financing remain insufficient.
- Achieving the 5% tipping point by 2030 is crucial to securing the industry’s 2050 net-zero goal and avoiding stranded assets.
The global shipping industry marked a milestone this year with the adoption of the International Maritime Organization’s (IMO) Net Zero Framework, a landmark agreement in multilateral climate diplomacy. However, despite this progress, the sector remains off course to meet its 2030 climate ambition, which requires at least 5–10% of international shipping’s fuel to come from scalable zero-emission sources (SZEF). A new progress report, released on 16 September 2025 in Copenhagen, highlights that while technology is advancing, weak demand signals and limited financing continue to hinder the transition.
The report, Progress towards Shipping’s 2030 Breakthrough – 2025 edition, produced by the UCL Energy Institute, the Global Maritime Forum’s Getting to Zero Coalition, and the Climate High-Level Champions, stresses that negotiations over the implementation of the IMO framework in the coming months will be decisive. Critical details, including reward mechanisms for early adopters of SZEF, must be finalized before the framework takes effect in 2027. These decisions will determine whether a credible pathway remains for zero-emission fuels to account for a minimum of 5% of shipping’s energy mix by 2030.
Technology Advances and Emerging Multi-Fuel Future
Encouragingly, the report underscores that technological readiness is no longer the primary barrier. Methanol engines are already commercially viable, ammonia engines are in the final testing stages, and methanol propulsion systems are steadily advancing, pointing toward a flexible multi-fuel future. Additionally, numerous regional pilot projects and supply initiatives are underway, expanding the global pipeline of SZEF production.
Demand Shortfalls and Risk of Stranded Assets
Despite this progress, demand trends within the industry are far less promising. A significant share of new vessels being ordered today are not SZEF-capable, which risks locking in conventional assets and intensifying future retrofitting pressures. Unless the order book for SZEF-capable ships expands rapidly, only about one-third of the necessary demand will materialize by 2030. This shortfall—equivalent to roughly 9 million tonnes of fuel oil or 400 large container ships—poses a major challenge to achieving the critical tipping point.
Financing Stalls Amid Conventional Preferences
Finance, another essential pillar of the transition, is also lagging. Early momentum in SZEF investment has slowed, with capital continuing to favor traditional fossil-fuel vessels. Without stronger policy signals and incentives, private investment in scalable zero-emission fuels is unlikely to reach the levels required to meet the 2030 goal.
Policy Gaps and the Need for National Action
The IMO’s Net Zero Framework has laid an important foundation, but uncertainty remains over its detailed design and the incentives it will provide. National governments and regional actors are expected to play a critical role in filling these gaps. If they step up with coherent policies, financial support, and regulatory certainty, they can help accelerate the uptake of SZEF and reduce the risks facing first movers.
The Stakes for 2030 and Beyond
The report highlights that achieving the 5% SZEF target by 2030 is vital. This level of adoption is considered the threshold at which supply chains, infrastructure, and supporting technologies reach maturity, enabling exponential growth towards full decarbonisation. Falling short would not only delay progress but could undermine the shipping industry’s 2050 net-zero commitment. Given that global shipping accounts for around 3% of total greenhouse gas emissions—more than Germany’s national emissions—and with global trade set to quadruple by mid-century, failure to act decisively would have severe climate consequences.
A Call for Coordinated Action
The report concludes that the direction of change is clear, but urgency and coordination are lacking. Aligning supply and demand, mobilizing finance, strengthening regulation, and ensuring a just transition for seafarers and communities will be critical to success. Only by accelerating efforts across these fronts can the industry hope to reach its 2030 breakthrough and safeguard the broader 2050 net-zero ambition.
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Source: Global Maritime Forum
