Marine & Offshore


Nov. 15 2023

The International Maritime Organization’s (IMO) has set a new and more ambitious target to decarbonize shipping and achieve net zero by or around 2050. As the clock ticks, ship owners are more aware than ever that change is required, but the pathway to adopting renewable and low-carbon fuels is more of a long and winding road.


The pressure to decarbonize is hitting the maritime industry from all sides. Public scrutiny of industrial pollution and greenhouse gas emissions grow daily. At the same time, governments and regulatory bodies the world over are setting increasingly strict targets for decarbonization. On top of this, shipping companies are under pressure from their clients –  charterers and cargo owners – to contribute towards a drastic reduction in their scope 3 emissions in turn.

Already in force is the IMO’s Carbon Intensity Indicator (CII), which aims to gradually reduce carbon emissions from ships. As part of its short-term measures package, IMO has also newly implemented the Energy Efficiency Existing Ship Index (EEXI) to improve existing ships energy efficiency and reduce fuel consumption.

The EU, meanwhile, has adopted FuelEU Maritime, which imposes greenhouse gas (GHG) intensity limits on fuels used onboard and mandates onshore power supply in ports for container and passenger ships. FuelEU Maritime will apply from January 2025. From 2024, the EU Emissions Trading System (ETS), a cap-and-trade mechanism designed to reduce GHG emissions over time will also apply to ships travelling to, from and within EU waters. China has also set carbon-neutral targets for all industries by 2060, established domestic emission control areas and may soon extend its own ETS to include shipping.

Many of these regulations set stricter emissions targets over time with financial sanction systems, meaning that ship owners must act to keep their fleet economically operational in coming years. Carbon capture and wind-assisted propulsion are options that could be implemented in the short-term to provide some reduction in carbon intensity. However, ship owners will at some point be compelled to rethink their fuel choices if they want to truly decarbonize their fleet. 


Fuel contenders could broadly be split in two main categories: 

  • Carbon-based, which includes MGO, liquefied natural gas (LNG), liquefied petroleum gas (LPG) and methanol/ethanol
  • Hydrogen-based, principally hydrogen and ammonia

The environmental footprint of each of these fuels could be significantly reduced if they are produced from biomass or from renewable sources.

As shown in the infographic below, each of these fuels comes with its own advantages and challenges.


While all of these fuels are an improvement on fossil fuels, their low-carbon credentials also depend on how they are produced. The entire production process for each fuel, as well as distribution and use onboard, needs to considered from well to wake (W-t-W)


Each of these alternative fuels has its own particular production method, and some generate more emissions than others. Traditionally, emissions from shipping have been measured “tank-to-wake”, taking into account only emissions from fuel combustion onboard the ship. In the short-to-mid-term, a newly adopted “well-to-wake” approach also considers upstream emissions – though it is not an approach taken in existing measures such as CII and EU ETS. 

This change complicates fuel categorization. Hydrogen, for example, can be produced in a number of ways, changing its emissions profile. Types of hydrogen range from brown, produced from coal, through pink, generated with nuclear energy using electrolysis, to green hydrogen, created from renewable energy. Similarly, different generations of biofuels have different emissions profiles, and for each a host of other impact categories need to be taken into consideration, such as land use, and food supply.


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At this stage, every solution is still on the table as the possible future fuel of choice. As the shipping industry explores its options and takes steps towards a greener future, Bureau Veritas is committed to helping clients stay informed, empowered and ready to make the right choice when the time comes.


In the midst of these extensive efforts, it is important to remember that shipping is not alone in its decarbonization journey. Every other sector, including transportation, is facing similar scrutiny and regulations. As a result, shipping will find itself in competition for a supply of renewable and low-carbon fuels, which is likely to drive price increases.

Maritime industry players, particularly those with cargo carriers or tankers, need to limit OPEX if they are to remain competitive for their clients, so the issue of fuel cost may prove decisive. That said, fuel prices change rapidly, and the energy market is always fluctuating, making concrete long-term predictions extremely difficult. 

A further complicating factor is the issue of infrastructure and supply for each of these fuels. As an established fuel in the shipping industry, LNG has the best-established global bunkering network. Currently 34 vessels supply LNG as a fuel, with a further 19 on order.[1] Methanol also benefits from a well-developed bunkering terminal network, and LPG from numerous import/export ports around the world. On the other end of the spectrum, bunkering infrastructure is much more limited for hydrogen and ammonia, and to lesser extent for biodiesel.


Bureau Veritas works to supports the development of a range of IMO regulations, from the International Code of Safety for Ships using gas or other low-flashpoint fuels (IGF code) to industry design, operations and bunkering standards. Through in-house, Joint Industry and Joint Development Projects, we constantly engage in research and development to gain greater understanding of the technical feasibility of and safety risks involved in the use of alternative fuels. 

Our experts also support technology developers by providing Approvals in Principle for new designs. In addition, we have issued Class Rules for the use of fuels onboard along with specific notations for vessels preparing to use low-carbon fuels. These include NR 529 for gas-fuelled ships, NR 670 for methanol- and ethanol-fuelled ships, NR 671 for ammonia-fuelled ships, and NI 647 for LPG-fuelled ships.

[1] Safety4Sea World LNG report 2023