Shipping is the backbone of international trade with over 90% of global freight volumes being transported by sea. With a statistic like that, it might be easy to think that the future of shipping is secure. But the industry is facing a multitude of changes and challenges approaching on the horizon. To ensure a secure future the maritime industry needs to adapt and evolve in innovative ways.

The most notable challenges faced today are the volatile global economic trends (especially with Trump’s latest tariff hikes), fuel costs, supply chain disruptions and international environmental regulations to name a few.

I want to focus for a moment on the environmental impacts of shipping and the fuels being burned, which are directly proportional to each other. The main fuels being used today is residual marine heavy fuel (HFO) and Marine Gas Oil (with the associated low sulphur variants). Shipping accounts for about 2.9% of global CO2 emissions. That is a lot for a single industry, in fact it is more than some countries. In 2023 the IMO revised its emission targets:

  1. to reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and
  2. to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008.

These targets pose challenges for a range of stakeholders, from ship owners, charterers and cargo owners to ship builders, designers, engine manufacturers, fuel suppliers, financiers and policy makers.

This is pushing industry to develop and utilise fuel sources other than hydrocarbons.

The biggest expense of operating a ship is the fuel costs and could range anywhere from 30% to 50% of the total operating costs for a ship. So, managing these costs are important to ensure profitability. This will become an even bigger priority in the future as industry explore other fuel options. The most popular possible alternative fuels include Green Hydrogen, Ammonia, Methanol and LNG (LNG is carbon based but has a very small carbon footprint). Despite all the pro’s and con’s of each fuel, they all have two things in common, they are very expensive to produce at the moment, and they all require specialised storage and transport infrastructure, of which there is very little at the moment. Developing the required infrastructure will take huge investment by role players. If anyone of these fuels is going to replace HFO and MGO, there would need to be established reliable “green” supply chains, which would need to be sustainable and cost effective. For this to be possible, it would require collaboration from multiple governments, fuel suppliers and the maritime industry on a global scale, which seems like a tall order.

Something else to think about is the modifications to existing engines and the development and production of new engines that would be required to run on the alternative fuels.

As prominent stakeholders in the local bunker fuel industry, uncertainties around which fuel/s will be replacing HFO and who will make these decisions remain critical unanswered questions. Determining a strategy for sustainability and economic growth in influx market is a challenge.

For now, the question remains, where to from here? Who will dictate the direction of the industry, the suppliers or the consumers? Maybe we’ll have the hydrocarbons retaining their dominance with Trump changing the landscape of the green economy.