Maritime shipping is one of the oldest industries developed by humankind. More than 100,000 years ago, humans built simple rafts and canoes for fishing. More than 3,000 years ago, they built wooden boats that enabled the colonization of the Pacific islands. Around 1,000 years ago, Vikings sailed their longships across Europe and beyond, trading and exploring new territories.
Later came the Age of Discovery, when larger ocean-going ships carried explorers such as Columbus, Magellan, and later James Cook across the world’s oceans. These voyages helped draw the maps of the world as we know it today and sparked the first wave of globalization. During this period, spices, silk, precious stones, and countless other goods were transported across the oceans to Europe.
The Industrial Revolution marked another major step forward. Steam-powered propulsion and steel hulls enabled the construction of larger and more reliable ships, freeing maritime transport from the constraints of wind conditions. Following the Second World War came the modern age of globalization, characterized by rapid growth in international trade and the development of container shipping.
The age of globalization has been both supported and driven by maritime shipping, as illustrated by international seaborne trade increasing forty-fold between 1955 and 2023, from 0.3 billion tonnes per year to 12.5 billion tonnes per year. Shipping remains one of the most cost-effective modes of transportation, with freight transported by sea costing roughly ten times less per tonne-kilometre than road transport. As a result, maritime shipping today accounts for approximately 80% of global trade by volume (UNCTAD, 2022).
Throughout history, shipping has played an integral role in every major phase of human development, and our era will be no different. One of the defining challenges of this century is the transition toward a carbon-neutral economy. Shipping, for all its benefits, is currently responsible for approximately 3% of global CO₂ emissions (BCG, 2024). Consequently, the next chapter in the history of shipping will be its decarbonization.
Achieving this goal will require progress across multiple dimensions. The industry must develop new energy sources and technologies while adapting infrastructure, operations, safety standards, economic incentives, and regulatory frameworks. The transition will be technological, industrial, economic, and political all at once.
In the following sections, we will first assess the current energy mix of the shipping sector before reviewing the main alternatives under consideration. Each option will be analyzed from technological, infrastructure, safety, and scalability perspectives. We will then examine the regulatory framework and economic incentives shaping the transition, before concluding with an outlook on the future of maritime shipping.
Current main bunkering fuels
The current main energy sources for shipping, commonly referred to as bunkering fuels, are Heavy Fuel Oil (HFO), with a global market share of around 30%, and Very Low Sulfur Fuel Oil (VLSFO), with a market share of approximately 45% (Bunkerindex, 2025). The IMO 2020 regulations acted as a powerful catalyst for the rapid transition from HFO to VLSFO after 2019, demonstrating that regulatory changes can quickly reshape the market, even when a cost gap exists between competing fuels.
A secondary effect of IMO 2020 was the increased adoption of liquefied natural gas (LNG), whose market share grew from roughly 1% to 4% between 2019 and 2026. LNG gained traction due to its ability to significantly reduce sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter emissions. However, LNG does not adequately address the shipping industry’s carbon emissions. While it burns more cleanly than conventional marine fuels, methane slip throughout the value chain largely offsets its carbon advantage. From a well-to-wake perspective, both fuel oils and LNG result in approximately 3 kg of CO₂-equivalent emissions per kilogram of fuel consumed.
Given that LNG does not provide a meaningful pathway toward deep decarbonization, we will now turn our attention to alternative fuels that offer greater potential for reducing greenhouse gas emissions. The main candidates currently being considered are biofuels, green methanol, green ammonia, green hydrogen, and renewable electricity stored in batteries.
For any of these fuels to achieve widespread adoption in the shipping industry, several conditions must be met:
- Technological readiness: Mature engines, fuel tanks, and supporting onboard systems must be available.
- Infrastructure readiness: Storage, transportation, and bunkering infrastructure must be developed at scale.
- Fuel availability: Sufficient fuel volumes must be available at competitive prices.
- Decarbonization potential: The fuel must provide substantial greenhouse gas emission reductions on a lifecycle basis.
- Operational readiness: Ship operators, crews, and port personnel must be properly trained, and robust operating procedures must be established.
- Regulatory readiness: A clear and comprehensive regulatory framework must be in place to enable safe and efficient fuel adoption.
In the next section, we will assess each of these alternative fuels against the criteria defined above and evaluate their potential to become the future energy source of maritime shipping.
Review of the alternative fuels
Biofuels: Biofuels for shipping are primarily composed of hydrotreated vegetable oils (HVO), produced by refining agricultural feedstocks and waste streams. One of their main advantages is that they are largely drop-in fuels, meaning they can use much of the existing fuel infrastructure and onboard equipment with only limited modifications. This greatly facilitates adoption compared with entirely new fuel systems.
Biofuels are already commercially available, with several refineries dedicated to their production. However, their adoption in the shipping sector remains limited, representing only around 0.3% of global bunkering fuels. Looking further ahead, biofuels will have to compete for feedstocks with food production as well as with other sectors such as aviation, which have fewer viable decarbonization alternatives. As a result, it appears unlikely that biofuels alone will be able to meet a large share of the shipping industry’s long-term decarbonization needs.
That said, biofuels can play an important role in the early stages of the transition. By blending them with conventional fuel oils or marine diesel, shipowners can reduce their fossil fuel consumption without requiring major investments in new vessels or infrastructure. On the decarbonization front, however, biofuels are not completely carbon-free. Depending on the feedstock and production pathway, significant emissions can arise from cultivation, transportation, processing, and refining, limiting their overall lifecycle decarbonization potential.
Let’s now turn to our next candidate fuel: Methanol
Like biofuels, methanol is a liquid fuel that can leverage much of the existing storage and transportation infrastructure, although somewhat larger modifications are required. There is already a mature global methanol industry, with established supply chains, storage terminals, transportation vessels, and operational procedures. This existing ecosystem represents a significant advantage compared with many other alternative fuels.
From a technological standpoint, methanol requires dedicated engines or engine retrofits. These engines are commercially mature and already available on the market, although manufacturing capacity is still scaling up to meet future demand. One important drawback of methanol is its lower energy density. On a volumetric basis, methanol contains approximately 2.5 times less energy than conventional marine fuels, requiring significantly larger fuel tanks to achieve the same sailing range. In many cases, this means sacrificing cargo space or installing additional fuel storage capacity onboard.
Regarding fuel availability, conventional methanol is already produced and traded in meaningful volumes, with around 30 million tons traded internationally each year. This would theoretically be sufficient to cover roughly 3% of global bunkering fuel demand. However, the key question is not the availability of conventional methanol, but rather the availability of green methanol.
Green methanol depends on two critical value chains: green hydrogen and sustainable sources of carbon dioxide. This is where the main challenge lies. Green hydrogen remains significantly more expensive than conventional grey hydrogen, and large-scale production capacity is still under development. While the rapid growth of the hydrogen sector could address this issue over the medium term, the availability of sustainable CO₂ may prove to be a more fundamental constraint.
Indeed, biogenic sources of CO₂ are limited and will face competition from other sectors, particularly aviation and chemicals. At the same time, industrial point sources of CO₂ are expected to become increasingly scarce as heavy industries decarbonize. Direct air capture could theoretically provide an unlimited source of carbon, but its cost remains prohibitively high, with the IEA projecting costs in the range of several hundred dollars per ton, even by 2050.
As a result, methanol is likely to play a meaningful role during the early stages of shipping’s energy transition. Its technological maturity, existing infrastructure, and relatively straightforward adoption pathway make it an attractive near-term solution. In the longer term, however, its dependence on large-scale sustainable CO₂ supply could become a major constraint, limiting its ability to fully decarbonize the global shipping sector and achieve widespread adoption.
Ammonia: Contrary to the fuels discussed previously, ammonia is not a drop-in fuel. Because it is not liquid at ambient conditions, it requires dedicated storage, transportation, and bunkering infrastructure. Fortunately, much of this infrastructure already exists. Around 170 ammonia terminals are currently in operation worldwide, many of them located in major industrial ports. These facilities have historically served the fertilizer and chemical industries, but they also provide a strong foundation for scaling ammonia as a marine fuel.
The situation is similarly favorable on the maritime transportation side. Approximately 170 ships are already capable of carrying ammonia, while more than 1,500 LPG carriers could be retrofitted to transport ammonia with relatively minor modifications. As a result, ammonia does not appear to face major infrastructure bottlenecks, at least in the early stages of deployment.
For many years, however, engine technology was considered the main obstacle to ammonia adoption in shipping. Ammonia behaves very differently from conventional fuels during combustion, requiring dedicated engine designs and fuel systems. Its lower flame speed and narrower flammability range make combustion more challenging, forcing engine manufacturers to develop new technical solutions.
This challenge has largely been overcome in recent years. Ammonia-powered marine engines have now reached a technological readiness level (TRL) of 9 for both two-stroke and four-stroke configurations, meaning they are fully commercialized and available for ordering. Engine manufacturers such as MAN Energy Solutions, WinGD or Wärtsilä have successfully brought ammonia-capable designs to market, removing one of the key barriers to adoption.
As a result, shipowners have increasingly started to place orders for ammonia-fueled vessels. According to the Ammonia Energy Association, around 140 ammonia-powered ships are currently on the order books of shipbuilders worldwide. While this remains a small fraction of the global fleet, it demonstrates that the industry has moved beyond the demonstration phase and entered the early stages of commercial deployment.
From both an infrastructure and a technology perspective, ammonia therefore appears to be one of the most mature long-term alternatives currently available to the shipping sector. The remaining questions concern fuel availability, economics, safety, and regulation, which will ultimately determine the speed and scale of adoption.
Figure 1: Ammonia fueled vessels on order, by year and country. Source: Rouwenhorst, 2024.
Regarding fuel availability, around 17 million tons of ammonia are currently traded internationally every year, providing a certain level of market liquidity for the first generation of ammonia-fueled ships. However, it is very likely that shipowners will target low-carbon or renewable ammonia from the outset in order to comply with future decarbonization requirements and maximize the environmental benefits of the fuel.
On this front, the outlook is encouraging. The Ammonia Energy Association estimates that approximately 2.5 million tons per year of renewable ammonia production capacity will be available by 2028. This is more than double the amount of ammonia expected to be required by the ammonia-fueled vessels scheduled for delivery by that date, estimated at around 53 ships according to the AEA. Therefore, fuel availability does not appear to be a limiting factor for the initial deployment of ammonia as a marine fuel.
On the cost side, however, the picture is less favorable. Green ammonia carries a significant premium compared to conventional marine fuels, mainly due to its dependence on the green hydrogen value chain. As shown in Figure 2, clean ammonia is currently around two to three times more expensive than its fossil-fuel alternatives in the shipping sector. While costs are expected to decrease with the acceleration of electrolyzer deployment and cheaper renewable energies, the economic competitiveness of ammonia remains one of the key challenges for its large-scale adoption.
Figure 2: Comparison of ammonia prices vs it’s fossil alternatives.
This is where regulation will be required to support the deployment of green ammonia, as well as other low-carbon fuels. FuelEU Maritime in the European Union, the recently adopted International Maritime Organization (IMO) framework, and various national regulations are all creating increasingly stringent greenhouse gas reduction requirements for ships. These regulations will play a key role in closing the cost gap between conventional fuels and green alternatives. We will examine these regulatory developments in more detail later in this article.
From an operational perspective, ammonia has also made significant progress in recent years. Multiple ship-to-ship ammonia transfer trials have been successfully completed, demonstrating that ammonia bunkering can be carried out safely when appropriate procedures and safety systems are in place. These demonstrations have provided valuable operational experience and have helped build confidence among regulators, port authorities, and ship operators.
Hydrogen: On the infrastructure side, hydrogen faces significant challenges. Compared with ammonia, infrastructure for hydrogen storage, transportation, and bunkering remains very limited. This is largely due to hydrogen’s difficult physical properties, including its low volumetric energy density and the need for either high-pressure storage or cryogenic temperatures. As a result, developing a global hydrogen value chain for marine fuel applications will be both complex and capital-intensive, making large-scale deployment difficult in the short term.
From a technological perspective, however, hydrogen fuel cells have now reached a high level of maturity, with several commercial applications already in operation. One of the key advantages of fuel cells is their higher efficiency compared with internal combustion engines. They are also highly flexible and perform particularly well under variable load conditions. This makes hydrogen especially attractive for vessels operating on short routes or requiring frequent power variations, such as passenger ferries, water taxis, harbor craft, and tugboats.
Fuel availability remains highly location-dependent, reflecting the limited infrastructure and logistical challenges associated with hydrogen transportation. Regulatory considerations are broadly similar to those affecting ammonia, and operational procedures have matured considerably through decades of experience in industrial hydrogen handling. Nevertheless, the lack of infrastructure remains the primary barrier to widespread adoption.
Batteries: On the infrastructure side, European ports are required under FuelEU Maritime and related regulations to develop shore-side electrical charging infrastructure. Although this infrastructure is not yet fully deployed, investments are accelerating rapidly, creating favorable conditions for battery-powered maritime transport.
The main limitation of batteries lies in their energy density. As shown in Figure 3, current battery technologies have an energy density that is approximately twenty times lower than ammonia or methanol and around fifty times lower than VLSFO on a mass basis. This severe energy density penalty makes batteries unsuitable for long-distance voyages, where the required battery weight and volume would become impractical.
As a result, batteries are likely to find their main applications in short-range shipping, where frequent charging opportunities are available. Ferries, inland waterway vessels, harbor craft, and other ships operating on fixed routes can already leverage battery technology to achieve zero-emission operations. For deep-sea shipping, however, batteries are unlikely to become a viable standalone solution with foreseeable technological developments.
Beyond the technical potential of each fuel, it is also essential to consider the regulatory framework when assessing future decarbonization pathways. Ultimately, regulations define the targets and requirements that shipowners must comply with, and therefore have a major influence on technology choices and fuel adoption. In the next section, we will examine the main regulatory developments shaping the decarbonization of the shipping industry and their implications for future fuel selection.
Impact of regulations
The first major regulation to be analyzed for the shipping sector is FuelEU Maritime, which entered into force in 2025. FuelEU Maritime applies to ships above 5,000 gross tonnage calling at European ports and requires them to progressively reduce the carbon intensity of the energy they use. The regulation is based on a benchmark of approximately 91 gCO₂e/MJ, against which ships must demonstrate continuous improvement. The required reduction starts at 2% in 2025, increases to 6% by 2030, and then gradually tightens through a series of intermediary milestones to reach an 80% reduction by 2050.
Compliance with FuelEU Maritime is enforced through significant financial penalties. These can reach around €2,400 per ton of VLSFO energy equivalent (around €1100 per ton ammonia energy equivalent), creating a strong economic incentive for shipowners to adopt low-carbon fuels and technologies.
The second major piece of legislation is the IMO Net-Zero Framework, developed by the International Maritime Organization (IMO). The objective of this framework is to achieve net-zero emissions from international shipping by 2050. Similar to FuelEU Maritime, the framework establishes progressively stricter greenhouse gas intensity targets, combined with a system of economic penalties for non-compliance. Depending on the level of emissions and the degree of non-compliance, penalties are expected to range from $100 to $385 per tonne of CO₂ emitted ($315 – $1215 per ton of VLSFO energy equivalent, or $145 – $550 per ton ammonia).
The adoption of a global framework represents a major step forward for the decarbonization of shipping and the development of alternative fuels. A global industry requires global rules, and the IMO framework provides much-needed long-term visibility for investors, shipowners, fuel producers, and technology developers. However, the road to adoption has not been straightforward. Since the initial vote in April 2025, significant opposition from a number of countries has delayed the process and introduced uncertainty regarding its final implementation. Despite these challenges, the framework remains a crucial milestone for the sector.
To accelerate the adoption of clean shipping fuels, strong and predictable decarbonization incentives are essential. Regulations such as FuelEU Maritime and the IMO Net-Zero Framework are therefore likely to become key drivers of fuel selection and investment decisions over the coming decades, helping to bridge the cost gap between conventional fuels and low-carbon alternatives.
Looking into the future
Looking into the future, shipping is a sector characterized by long lead times. New vessels often take several years to design and build, while ship lifetimes commonly exceed 25 years. As a result, the industry needs clarity today to drive decarbonization tomorrow. Regulations must therefore remain stable, predictable, and credible if they are to support long-term investment decisions.
Regarding the future fuel mix, LNG, which already holds around 4% of the bunkering market, is likely to continue growing in the short term due to its ability to reduce sulfur emissions, particulate matter, and NOx emissions. However, LNG alone cannot deliver the deep decarbonization required by future regulations.
In the next phase of the transition, biofuels and methanol are likely to play a major role. Thanks to their relatively straightforward adoption pathways and their ability to leverage existing infrastructure, these fuels can support early decarbonization efforts and help shipowners comply with regulatory requirements over the coming decade. However, achieving the deep emission reductions required by FuelEU Maritime and the IMO Net-Zero Framework in the long term will likely prove challenging. Biofuels remain constrained by feedstock availability and competition with food production and other sectors, while methanol ultimately depends on access to sustainable sources of carbon dioxide.
For the deep decarbonization of long-distance shipping, which represents the vast majority of global maritime transport, ammonia stands out as one of the most promising solutions. It can be produced at large scale, benefits from an existing global infrastructure network, can be transported efficiently over long distances, is independent of the carbon value chain, and offers an energy density suitable for deep-sea shipping. While ammonia’s toxicity requires careful management, the industry has already developed and tested the operational procedures needed to handle it safely.
For local applications within ports and for short-distance maritime transport, hydrogen and batteries are likely to play a leading role. Their high efficiency, flexibility, and ability to respond quickly to variable loads make them particularly attractive for ferries, tugboats, harbor craft, and other vessels operating on fixed routes.
What Needs to Happen Next?
If ammonia is to become a major contributor to shipping decarbonization, several conditions must be met.
First, as mentioned previously, the regulatory framework must remain stable to provide confidence for investors and shipowners making long-term commitments.
Second, clean ammonia must become available in sufficient quantities and at prices that make it economically viable for shipowners. To achieve this, developers must continue scaling the ammonia value chain and bring large production projects to final investment decision, thereby unlocking economies of scale and reducing production costs.
Economic support mechanisms will also remain essential in the coming years. Governments seeking to establish leadership in emerging clean shipping value chains need to support their industries and ports in bridging the current cost gap between conventional and low-carbon fuels.
One example is the H2Global mechanism, supported by the German Federal Ministry for Economic Affairs and Climate Action. Through contracts for difference, H2Global provides long-term price certainty for producers of hydrogen derivatives, including ammonia. The program’s second funding round includes up to €3 billion to help bridge the gap between supply and demand prices. H2Global is also preparing a dedicated mechanism for the shipping sector, shielding it from direct competition with other end-use sectors. Similar approaches are emerging elsewhere, including the European Hydrogen Bank in Europe and various contract-for-difference schemes in Japan and other Asian countries.
Beyond public support, the demand side also has an important role to play. According to studies by BCG, more than 80% of cargo owners indicate a willingness to pay a premium for green shipping services, with an average willingness to pay of around 4%. While encouraging, this remains below the level likely required to drive large-scale decarbonization. Estimates suggest that premiums of roughly 10–15% may be needed to sustain long-term adoption, with even higher premiums potentially required during the early years of the transition.
Finally, all shipping operations must maintain the highest safety standards. Production facilities, storage terminals, transportation systems, bunkering operations, and vessel operations must continue to demonstrate safe and reliable performance. Maintaining confidence among regulators, shipowners, ports, and the public will be critical for the successful adoption of ammonia or other green fuels as a marine fuel.
The Role of Proton Ventures
This is where Proton Ventures can contribute.
As an engineering company specialized in ammonia, Proton Ventures designs safe and reliable ammonia storage and handling infrastructure, enabling secure operations throughout the value chain. We also develop operating procedures and safety strategies that help operators manage ammonia safely under all operating conditions.
In addition, Proton Ventures supports fuel availability by designing and optimizing ammonia production facilities, helping project developers bring competitive ammonia volumes to market and supporting the growth of ammonia as a shipping fuel.
If you are interested in developing an ammonia production, storage, or bunkering facility, feel free to reach out. We would be happy to discuss how Proton Ventures can support your project and help accelerate the transition toward sustainable shipping.