Shipping industry decarbonization in 2025 is the sector’s defining challenge—driven by new policies, ESG pressure, and the urgent need for low-carbon fuel alternatives and scalable infrastructure.

Navigating the future of sustainability in shipping through biofuels, ETS taxation, and emissions certificates.

In the last few years, heavy emitters have witnessed the development of decarbonization solutions, with financial markets facilitating connections between low-carbon fuel producers and consumers, offering solutions for a rapid scale-up and comprehensive adoption.

The heavy industry sector, including shipping, is responsible for approximately 40% of global CO2 emissions. While there is no single solution to decarbonize heavy emitters, a combination of more minor, ad hoc initiatives can add up to a broad shift away from fossil fuels across the industrial world.

Blending ethanol into the gasoline pool, mixing used cooking or crop oils into middle distillates, replacing regular power with renewable alternatives, or utilizing gases produced from waste or compost can collectively contribute to a significant decarbonization effort.

With increasing regulatory and stakeholder pressure, two industries that produce heavy emissions are facing particular challenges in their decarbonization paths: shipping and aviation.

Volume and weight constraints, combined with the extended length of a typical voyage compared to even the best battery usage cycles, have made electrification impracticable for both ships and planes.

Small-scale initiatives exist and should not be discounted, ranging from algal biofuels to ships running on hydrogen or ammonia; however, these would either be constrained by scale limitations or prohibitive retrofitting costs.

Biomethane, a potential silver bullet?

In decarbonizing the shipping industry, several pathways have emerged for low-carbon fuels. The Maersk Mc-Kinney Møller Center estimates that, by 2050, biogas fuels could account for between 19% and 37% of the overall mix in the deep-sea shipping sector. A credible alternative will emerge from biomethane and its derived marine fuels.

Produced from the smallest hydrocarbon building block, methane, contained in organic waste, biomethane has nearly the same chemical composition as natural gas.

It can be directly injected into the gas grid and then consumed as feedstock to create hydrocarbon chains tailored to the end-user’s specifications, engineered to any length or degree of complexity — with virtually zero sulfur content and minimal, or sometimes even negative, carbon intensity.

Logistical advantages

Furthermore, port infrastructures are typically located near population centers and can easily be connected to existing gas grids, eliminating the need to transport Natural Gas Liquids through dedicated supply chains to bunkering stations and significantly improving the scalability of this new type of fuel production.

The technology may not be revolutionary, but its on-site deployment capability makes it far more economically viable than its competitors in replacing oil-based marine fuel oils and diesels.

Emissions offsetting

Altogether, the International Energy Agency predicts that biofuels, hydrogen, ammonia, and methanol will collectively account for 85% of the share in final energy consumption in the shipping industry by 2050. However, until biomethane and renewable fuels constitute a significant share of daily fuel consumption for ship engines, the industry must face the reality of its carbon footprint.

End-users who can access alternative energy sources are likely to do so, driven by regulations, investor pressure, or a genuine desire to minimize the environmental impact of their operations.

When no such alternative exists, operators must turn to emissions offsetting: generating positive carbon emissions to conduct business but financing a carbon sink for the same amount of emissions, thereby maintaining a legitimate position to claim a net-zero operation.

Navigating the transition

CSC Commodities, a division of Marex, has been trading oil derivatives and physical emissions for over a decade and believes emissions markets are about to face an inflexion point in their sizes, with radical changes in supply-demand balances.

The FuelEU Maritime regulation, which took effect on 1 January 2025, will further tighten the screws on the shipping industry. This regulation mandates gradual reductions in the greenhouse gas intensity of fuels used by ships, starting with a 2% reduction by 2025 and aiming for a reduction of up to 80% by 2050.

Ships will also be required to use onshore power supply or zero-emission technologies while at berth, particularly for container ships and passenger ships. The framework is also expected to drive increased investment in low-carbon fuels and the infrastructure needed to support them, sparking renewed discussions about the advantages of various low-carbon alternatives, such as biomethane.

These measures, combined with the EU ETS, which extends emissions trading to the maritime sector, will create dual pressure on shipowners and operators to adopt cleaner fuels and technologies while managing the financial implications of purchasing emissions allowances.

Many in the industry recall the seismic shock of IMO 2020 and the introduction of a sulfur cap for marine fuels. The International Maritime Organization has so far left local jurisdictions to decide whether shipping should be in the scope of ETS initiatives and mandatory emissions reductions schemes.

But with the ever more urgent climate emergency, and ever greater public awareness, it is only a matter of time until a complete offset of carbon footprint is mandated to the industry – it will come in a package of new obligations: the use of zero carbon intensity fuels, the payment of an ETS tax, and the surrendering of emissions reductions certificates.

Navigating these regulatory waters will be challenging, but the integration of biomethane as a marine fuel offers a promising pathway to compliance and sustainability. A discussion around shipping’s emissions efforts is also helpful in this context.

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2025 Marks a Turning Point for Global Shipping — Are You On Course?

The pressure to decarbonize shipping is at an all-time high. From regulatory enforcement to public ESG demands, the industry must act fast to integrate circular fuels, clean technologies, and transparent reporting systems.

Klean Industries Offers Scalable Maritime Climate Solutions:

✅ Marine-grade pyrolysis systems producing low-carbon fuels from waste
✅ Turnkey infrastructure for clean fuel logistics and port delivery
✅ KleanLoop™ blockchain for verifiable ESG & lifecycle tracking
✅ Partnerships supporting compliance with FuelEU Maritime & IMO goals

Contact Klean Industries to stay ahead of regulatory pressure and lead the transition to climate-aligned shipping in 2025 and beyond » GO.