From the magazine – Efforts to make international shipping carbon-neutral are stalling. Now that the IMO’s Net Zero Framework (NZF) has been scuppered by the Trump administration and the major oil- and gas-producing nations, it remains to be seen whether it will be possible this autumn to get the energy transition and the reduction of CO2 emissions in shipping back on track. There has not yet been a real breakthrough in the search for alternative fuels, and technology to capture emissions of the greenhouse gas CO2 is still very much under development.
In every issue of SWZ|Maritime, SWZ|Maritime’s editor Antoon Oosting writes an opinion piece under the heading “Markets” about the maritime industry or a particular sector within it. In the July-August 2026 issue, he discusses the EU-climate policy and how shipowners are choosing to comply with this. The opinions expressed in this article are those of the author and do not necessarily reflect those of the publisher (the SWZ Foundation), the KNVTS, or other editors.
Meanwhile, the shipping industry is facing increasingly heavy burdens due to the mandatory contributions under the European ETS (Emissions Trading System), which stipulates that ships must purchase emission allowances for the amount of CO2 emitted. Shipowners and shippers of a wide range of products pass these additional costs on in full to European consumers.
The EU ETS was promoted on the basis that the revenue generated would be reinvested in the production of climate-neutral e-fuels, but little has come of this. According to European shipowners, only five per cent of the e-fuels produced is currently intended for shipping. To reduce their emissions nonetheless and avoid EU ETS fines, shipowners are thus forced to spend their money on scrubbers, onboard carbon capture and other fuel-saving devices from Chinese shipbuilders and maritime suppliers. All thanks to EU climate policy.
Also read: Road to sustainable shipbuilding and shipping still uncertain
Alternative fuels platform
The fact that the construction of new clean ships is not really making much headway was demonstrated once again in early July when DNV’s Alternative Fuels Insight (AFI) platform revealed that, over the past six months, the number of ships capable of running on alternative fuels had fallen from 155 last year to 137 this year. A mere 9.2 per cent of the 1481 orders that have been placed, according to shipbroker Clarksons’ data for newbuild ships in the first half of the year.
Global shipbuilding orders for the first half of 2026 reached 42.95 million compensated gross tonnes (CGT) – 1481 vessels – a 66 per cent increase from the 25.90 million CGT (1101 vessels) recorded during the same period last year. Incidentally, of the 137 alternative-fuel-ready vessels, seventy are LNG-fuelled – and therefore still run on fossil fuels.
The number of orders for LPG- and ethane-fuelled vessels did, however, rise from fifteen last year to 55 in the first half of this year. The remaining newbuild orders comprise four ammonia-fuelled vessels, two ethanol-fuelled barges and one vessel capable of running on hydrogen. Apart from LNG, these are all very small numbers of clean vessels.
LNG remains leading option
‘LNG remains the leading near-term option, accounting for 73 orders so far this year. Most of those were container ships (42) and car carriers (21), reflecting continued demand in sectors where LNG infrastructure is already well established,’ says Jason Stefanatos, global decarbonisation director at DNV.
June figures from DNV’s AFI platform show that shipowners placed fifteen new orders for alternative-fuelled vessels during the month.
Stefanatos: ‘What we can take away from the first half of 2026 is that we have a market progressing at different speeds depending on segment economics, fuel availability, and the regulatory landscape, with shipowners and other stakeholders pursuing different pathways based on their individual priorities and requirements.’
Stefanatos also said that developments in areas such as ammonia- and ethanol-fuelled vessels underline that new pathways continue to be explored. To be noticed is that in June, two LNG bunker vessels were ordered, bringing the total LNG bunker vessel orders to seven so far this year. Although new orders fell, vessel deliveries continued to expand the alternative-fuel fleet. During the first half of 2026, 61 LNG-fuelled vessels and 38 methanol-fuelled vessels entered service.
This first half year also saw a milestone for ammonia as Belgian gas shipping company Exmar took delivery of what is described as the world’s first oceangoing dual-fuel ammonia vessel. Unlike earlier ammonia-powered demonstration projects, the vessel is intended for commercial operation, highlighting gradual progress towards broader adoption of ammonia. The 46,000-m3 gas carrier christened Antwerpen can, according to Exmar, reduce greenhouse gas emissions by up to ninety per cent. The Antwerpen is equipped with a dual-fuel two-stroke engine developed by WinGD. The vessel utilises two 500-m3 deck tanks to store ammonia, giving it a range of about ten days of continuous sailing.
Also read: EU maritime industrial strategy will have to prove its worth
The shipowner’s voice
Shipowners’ preference for LNG is also highlighted in the recently published Maritime Barometer by the International Chamber of Shipping (ICS). ICS is the global trade association for shipowners and operators, representing the world’s national shipowner associations and over eighty per cent of the world merchant fleet. LNG and biofuels are jointly identified as the most viable options, followed closely by heavy fuel oil (HFO) combined with abatement technologies.
Rather than signalling a rapid shift towards new solutions, these results point to a more pragmatic approach, the ICS concludes. Respondents prioritise fuels with established supply chains, proven technologies, and compatibility with existing infrastructure, reflecting a broader preference for certainty and reliability.
Other fuel pathways like methanol, ammonia, nuclear, hydrogen, wind power, batteries or LPG remain under active consideration, but face ongoing challenges related to cost, scalability, and infrastructure. As a result, the transition is expected to follow a more measured trajectory, shaped by both ambition and practical constraints unless there is sufficient global support in the near future, the ICS says.
The only widely deployable fuel
A dedicated section examined industry response to the IMO’s delayed NZF, which remains under negotiation following the Marine Environment Protection Committee (MEPC) 84. While the majority of respondents indicated that they were making no changes to their plans (a cohort which also encompasses organisations whose plans were to wait for the regulation to pass before picking a direction), it is worth noting that some have indicated that they have amended or abandoned their decarbonisation strategies. The ICS says this dynamic has reinforced LNG’s dual role as both a security asset and a volatility-exposed commodity.
Taken together, LNG’s continued strength is not driven by a unified belief in its long-term role, but by its position as the only widely deployable fuel that can absorb short-term demand shocks, compliance pressure, and infrastructure constraints simultaneously.
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Strong economic value
Last May, European Shipowners | ECSA also published a report about the economic value of European shipping. The European fleet grows steadily, but other fleets grow faster. The EU- and Norway-controlled fleet reached a capacity of 570.5 million GT across 22,403 vessels in 2025, up around eleven per cent in capacity since 2018. The growth of 2.6 per cent in 2025 was the strongest annual increase over the period.
However, over the same 2018-2025 period, the global fleet expanded by approximately thirty per cent in GT, driven largely by rapid growth in the Asia-Pacific region. Consequently, the European share of global GT declined from 38.5 per cent in 2018 to 32.8 per cent in 2025. This change reflects the harsh competition European shipping faces due to faster fleet growth in other regions rather than any reduction in European-controlled capacity.
The EU+Norway-controlled fleet retains leading shares of global capacity in container shipping (45 per cent), ferries (52 per cent), LNG carriers (32 per cent), oil tankers (34 per cent), bulk carriers (28 per cent) and vehicle carriers (28 per cent). This diversification underpins Europe’s role in energy security, the supply of critical raw materials, and the networks that enable 76 per cent of the EU’s external trade.
The European fleet’s ownership structure reflects its diverse nature: Ninety per cent of the more than 4000 shipping companies in the EU-27 and Norway control fewer than ten vessels. Small and medium-sized enterprises (SMEs), which represent the majority of shipping companies, coexist with a limited number of large shipping groups, supporting a wide range of business models across different shipping segments.
Investments in clean ships
European shipowners are leading the transition to low- and zero-carbon fuels (LZCFs), accounting for 44 per cent of global LZCF tonnage on order and representing the largest regional share. However, according to ECSA, this investment is not yet matched by European LZCF production capacity, with the European fleet relying mainly on Asian fuel suppliers.
This finding highlights the need for investment in the uptake and availability of LZCFs and the use of the EU ETS revenues for this. Less than five per cent of Europe’s projected LZCF production pipeline is currently allocated to maritime use, reflecting strong competition for limited supply.
The money raised by the EU shipping industry should be 100 per cent invested in clean shipping and port infrastructure. Otherwise, the EU ETS is just another heavy tax burden that is chasing away industries to China or other Asian countries whose yards already benefit from the investments made. Some fifteen years ago, former Boskalis CEO Peter Berdowski was already invited to move his company to Singapore.
Cartoon by Hans de Wilde/SWZ|Maritime.
