INSIGHT: Maritime Leaders Must Act Now to Meet Climate Targets

Jari Yli-Tolppa, is vce president for shipowner services at Elomatic. Image Credit: Elomatic

The global shipping industry stands at a decisive crossroads.

Despite efforts to reduce emissions and improve sustainability, recent studies show that maritime carbon emissions has reverted to 2008 levels. This is driven by the growth in trade and fleet activity, combined with the slow adoption of clean technologies and uncertain regulatory landscape, which have collectively outweighed decarbonization efforts to date.

This represents an alarming sign considering that the IMO's 2030 greenhouse gas (GHG) reduction checkpoint is quickly approaching.

With climate regulations tightening and stakeholder scrutiny increasing, the pressure on shipowners and operators to deliver tangible emissions reductions is growing. However, the scale and complexity of the decarbonization challenge, from fragmented supply chains to the uncertainties surrounding alternative fuel, as well as significant capital investments, have led to a "wait and see" approach that favours hesitancy over proactivity when it comes to engaging with emerging clean technologies.

Although understandable, this hesitation threatens to derail the progress toward the IMO's target of net-zero emissions by 2050.

According to DNV, in order to achieve these significant targets, the industry must secure roughly 270 million tonnes of heavy fuel oil (HFO) equivalent of alternative fuels by 2050, a volume roughly equivalent to the annual fuel consumption of the entire global shipping fleet.

This huge undertaking requires both the production of alternative fuels and the necessary on-board and onshore infrastructure to store and distribute them. It is projected that the maritime industry will need globally around USD 8-28 billion annually for vessel decarbonization and as much as USD 90 billion per year to support onshore fuel production and infrastructure development.

Achieving this will demand substantial coordination and capital investment across fuel producers, engine makers, shipbuilders, and ports, as well as joint efforts across sectors.

While the numbers are daunting, they are not insurmountable, but this task will succeed only if the industry takes a proactive and collaborative approach, that will mobilize investment across the supply chain.

A New Regulatory Era Demands Urgency

The regulatory landscape is evolving quickly. The implementation of the EU's FuelEU Maritime (FEUM) regulation in January 2025 – which following the inclusion of shipping into the EU's Emissions Trading System in 2024 – represents a major step forward in supporting the acceleration and integration of alternative fuels, as well as wider clean technologies.

FEUM mandates gradual reductions in the GHG intensity of fuels used by ships over 5,000 GT calling at EU ports, starting at 2% and reaching 80% by 2050.

In order to support compliance with FEUM, the industry will benefit from mechanisms like pooling, banking, and borrowing. FEUM gives shipowners tools to manage compliance in a flexible and adaptive way.

Still, early forecasts from DNV warn that compliance deficits could significantly outweigh surpluses in the regulation's first year.

Notably, recent reports have suggested that more than 60% of shipowners missed the recent EU ETS reporting deadline.

Therefore, underscoring the challenge the industry faces when it comes to regulatory compliance, which highlights the fact that alternative fuels alone won't be enough. If the industry is to meet the IMO's 20% GHG reduction by 2030, the maritime industry must combine clean fuels with operational efficiency gains and technology-led innovation.

Alternative Fuels: Scaling Supply Is Essential

It is widely regarded that the shipping industry's green transition is predicated on unlocking the viability of alternative fuels at scale. In 2024, over 600 alternative-fuel capable vessels were ordered, marking a 50% increase in the global orderbook.

Fleets are beginning to integrate LNG, methanol, ammonia, and hydrogen-fuelled vessels.

However, progress is being impacted by a global supply shortage. Without robust investment in bunkering infrastructure and supportive national policies, these green vessels could sit idle or operate below capacity.

The EU's Fit for 55 package establishes provisions with the Alternative Fuels Infrastructure Directive (AFID), which represents a binding regulation that compels Member States to build national frameworks for alternative fuel deployment.

However, implementation remains inconsistent.

The industry must continue advocating for more ambitious infrastructure planning and foster stronger collaboration between private and public sectors.

As a leading engineering and consultancy firm, Elomatic is actively addressing the continued development of alternative fuel technology through actionable solutions and collaborative innovation.

A prime example is our role in developing the Green North Energy project, which represents Finland's flagship green ammonia production facility in Naantali. Designed to run on renewable electricity and green hydrogen, the facility will boast 280 MW of capacity and an investment value of EUR 600 million.

In 2024, Meridiam, a French Benefit Corporation, joined as a majority shareholder to accelerate the project's deployment, with Elomatic continuing to support as the owner's engineering partner.

Elomatic's consultants are also contributing to research that will shape maritime decarbonization for years to come.

Elomatic is part of the Ammonia Energy Conversion and Social Acceptance (AINA) project, a joint research initiative coordinated by Wärtsilä and Aalto University and supported by Business Finland.

The AINA project explores ammonia's potential as a clean, carbon-free marine fuel and as a cost-effective energy carrier for storing and transporting green hydrogen. The project addresses both the technical and societal challenges of adopting ammonia in energy systems, including its combustion properties, toxicity, corrosiveness, as well as the production of harmful byproducts, like nitrous oxide.

Through advanced 3D flow modelling, experimental work, and social acceptance research, AINA aims to develop the foundational knowledge needed to safely integrate ammonia into marine engines, burners, and fuel cells.

The Importance of Efficiency

While alternative fuels are key to long-term decarbonization, energy efficiency offers immediate and scalable emissions reductions.

One key area of impact is hull form optimization, where even modest improvements in hydrodynamic performance can translate into significant fuel savings and lower operating costs. By leveraging
advanced Computational Fluid Dynamic (CFD) capability, alongside continuous design refinement, Elomatic helps shipowners improve their machinery and propulsion efficiency, reduce energy consumption, and minimize environmental impact – without compromising vessel safety or reliability.

There is no doubt that the pathway to maritime decarbonization is developing.

However, in order to meet the approaching checkpoints that have been set, shipowners and operators must move quickly to engage with viable and available technologies that are designed to support regulatory compliance.