The international shipping industry is making strides in cutting greenhouse gas emissions, but the challenge of financing the switch to cleaner fuels remains unresolved. Speaking at TPM25 in Long Beach, Søren Toft, CEO of MSC and chair of the World Shipping Council, said the industry is entering a phase of “realization and pragmatism,” as operators grapple with the economic realities of decarbonization.
The International Maritime Organization (IMO) has steadily ramped up its environmental goals. The 2020 global sulfur cap dropped fuel sulfur content from 3.5% to 0.5%, affecting over 96% of the world fleet and costing carriers up to $15 billion. This was followed by the 2023 targets aiming for a 40% reduction in greenhouse gas emissions by 2030 and full decarbonization around 2050.
However, while shipowners support the broader push for decarbonization, there’s no clear answer on which fuels will dominate in the future—or who will pay for them. MSC has committed to dual-fuel engines on 5.5–6 million TEUs worth of new tonnage, making up 40% of the global dual-fuel containership orderbook. Yet Toft admitted there’s “no clear certainty of what fuels will be there.”
In the meantime, MSC and others are turning to liquefied natural gas (LNG) as a transitional solution. Other options—methanol, hydrogen, biofuels—present their own challenges, especially in terms of cost and global availability. Toft questioned the practicality of having multiple fuel types available at every port worldwide, calling instead for a global carbon price and clearer fuel guidance.
Alternative fuels can cost five times more than conventional bunkers, and carriers aren’t positioned to absorb those costs alone. While there’s widespread support for legally binding greenhouse gas intensity limits, the economic burden of cleaner fuels is becoming a flashpoint.
Industry leaders suggest possible solutions such as subsidies for clean fuel use or a global fuel levy. Patrick Verhoeven of the International Association of Ports and Harbors proposed using levy revenues to build green infrastructure in developing nations and fund climate initiatives.
Still, political resistance—especially to new taxes—could complicate implementation. “We as ocean carriers are stuck between a rock and a hard place,” said CMA CGM North America CEO George Goldman, citing $20 billion already spent on decarbonization efforts.
Ultimately, shippers may need to bear the brunt of fuel cost increases. Freight forwarder JAS Worldwide noted that while some customers are willing to pay extra on select routes, broad acceptance is still limited.
As Goeman put it, “We have to work together as an ecosystem.”
