Shipping is falling behind the trajectory needed to achieve its 2030 green fuel ambitions, with weakening demand, stalled finance and regulatory uncertainty increasingly threatening to undermine strong progress in technology and fuel supply.
That’s the conclusion of the 2026 edition of Climate Action in Shipping: Progress Towards Shipping’s 2030 Breakthrough, a joint report from the UCL Energy Institute and the Getting to Zero Coalition. The report assessed the industry against five levers of change: technology and supply, demand, finance, policy and civil society. While it found technology and supply and civil society partially on track, demand, finance and policy are not on track.
Between 5% and 10% of the fuel consumed by shipping in 2030 needs to comprise scalable zero-emission fuels (SZEF) if the industry is to remain aligned with the International Maritime Organization’s 2023 greenhouse gas strategy. That corresponds to 0.6-1.2 exajoules of energy, approximately 15-30 million tonnes of heavy fuel oil equivalent annually, or enough fuel for around 600-1,200 15,000-TEU container ships, according to the report.
But “overall performance indicators lag behind what is needed”, the report states and in some areas, progress has actually reversed.
Central to that deterioration was the failure to adopt the IMO Net-Zero Framework (NZF) in October 2025, an outcome the report links to company decisions being paused or cancelled and weakening sentiment across finance and demand.
Make amends
Yet the report stresses that opportunity has not disappeared. Supply and technology continue to progress and it remains feasible to achieve high levels of SZEF production consistent with a pathway towards net zero in 2050. Instead, the greater danger is that shipping lacks sufficient SZEF-capable vessels because regulatory uncertainty discourages investment. The result, the report warns, can become self-reinforcing as fears over insufficient fuel supply encourage owners to order conventional fossil-fuelled tonnage.
Technology provides perhaps the clearest counterpoint to that pessimism. The first sea trials of large ammonia-fuelled vessels equipped with two-stroke engines have been successfully completed, while the first ship-to-ship ammonia bunkering operation has taken place. Everllence, Wärtsilä and WinGD have also announced new methanol retrofit offerings. Meanwhile, the number of ports offering methanol bunkering have increased from 19 to 29.
Fuel production nevertheless remains well short of the required trajectory. Total SZEF production remained below 0.02 EJ in 2025 compared with a breakthrough target of 0.10 EJ. The report now expects that milestone to be surpassed in 2028, while the 0.6 EJ target originally targeted for 2030 is likely to be passed between 2032 and 2035 under its low and medium ramp-up scenarios. Green hydrogen costs are also still “substantially above levels needed” to reach the targeted $1.5-$2.0/kg by 2030.
Demand presents a particularly mixed picture.
The long-awaited delivery of methanol-capable containerships produced the largest annual capability gain recorded by the study. Methanol-capable in-service tonnage more than tripled from 2.3 million to 7.7 million GT, lifting SZEF-capable tonnage from 0.41% to 0.77% of the active fleet.
But the forward orderbook moved sharply in the opposite direction. SZEF-capable vessels fell from 9.5% to 5.7% of GT ordered, with both methanol- and ammonia-compatible ordering declining. The 2024 shift away from conventional fuels therefore looks, according to the report, like “a one-off pulse driven by a few large operators rather than a structural break in ordering behaviour”.
Expected potential SZEF demand in 2030 consequently stands at around 0.45 EJ, equivalent to about 450 large containerships, against roughly 600 needed to reach the lower 5% breakthrough threshold. Re-establishing the pre-2025 growth trajectory for SZEF-capable ordering could raise capacity to 0.70 EJ and clear that threshold, illustrating how much hinges on ordering decisions over the remainder of the decade.
Limited appetite
Cargo owners are providing little encouragement. Their willingness to pay a premium for low-carbon shipping fell from 4.5% to 3%, while the proportion expecting to pay more within five years dropped from 65% to 45%. Despite the number of Getting to Zero Coalition members offering zero-emission shipping services more than doubling from four to nine, the report concludes that demand from cargo owners “is not keeping pace with that growth” and says this further demonstrates that the market alone is unlikely to prompt the required fleet shift.
Finance offers another split picture. The Poseidon Principles Annual Disclosure Report 2025 recorded its strongest year-on-year improvement in climate alignment since the framework was established. Around 29% of global ship finance is now covered by transparent IMO-aligned climate disclosure.
However, sustainable finance entering shipping has plateaued.
Around $3 billion of shipping-specific sustainable debt was issued in 2025, down from $3.4 billion in 2024. One $1.1 billion Hapag-Lloyd green loan accounted for 37% of the year’s shipping issuance, while only 10% was approved by the Climate Bonds Initiative. The report therefore judges finance “partially on track to align shipping portfolios, but not to align the flow of capital”.
Policy is where the report identifies the most damaging reversal. Although the draft NZF was approved in April 2025, its formal adoption failed in October and the extraordinary IMO session was adjourned for one year. While negotiations became more constructive at MEPC 84 in April 2026, substantial uncertainties remain over fuel eligibility, rewards and the system’s implementation architecture. National and regional initiatives in the UK, Singapore and Europe have progressed but are regarded as too uneven and limited to replace global regulatory certainty.
Civil society, meanwhile, remains only partially on track despite advances in workforce standards, alternative-fuel training and participation by climate-vulnerable and Indigenous actors at the IMO. Local campaigning around ports remains especially limited, with active campaigns identified at just eight of the world’s top 50 container ports during 2025.
Against that backdrop, the report places regulation firmly at the top of its prescription for recovery, arguing that the IMO should adopt the NZF “‘as is’ within 2026”. It describes the failure to adopt the framework in October 2025 as “the single most transition-regressive event of the five years this report has been running”.
Its other recommendations reinforce that message. Reward mechanisms for zero- and near-zero-emission technologies and fuels need to establish an immediate business case for SZEF; national and regional governments should underwrite early fuel use while global measures are developed; and industry needs to reduce the risks associated with a “‘wait and see’” strategy by attaching a clearer value to vessel and fuel optionality.
