For a century, the world’s oceangoing fleet has been powered by crude. The 50,000 ships plowing the high seas consume more than five million barrels every day, not much less than all the aircraft in the sky. One-twentieth of all oil ends up burned in a ship engine. Those days may soon be ending.

That’s because the world’s merchant ships are about to undergo the most profound revolution they’ve seen since the dying days of coal-powered steamships. Rules being quietly hammered out by the International Maritime Organization or IMO (the United Nations body that regulates shipping) are about to change the industry beyond measure.

It would be nice to be able to report this as a victory for climate. New energy technologies for power stations and vehicle engines are the biggest drivers of decarbonization in the world today. That doesn’t look like it’s happening in shipping just yet. Even so, we might be approaching a tipping point.

After decades of resistance, the IMO is finally implementing measures to reduce shipping’s carbon footprint. It wants to cut emissions intensity to 40% below 2008 levels by the end of this decade, with total carbon pollution by 2050 falling to half of 2008’s levels. From the start of 2023, all ships will have to report their emissions and submit plans to improve if they’re underperforming.

That sounds like good news, but the shipping industry is notoriously conservative and the IMO tends to be dominated by the industry it regulates. The regulations at present are largely voluntary, and in line with what shipowners are already doing for cost-management purposes. Some of the biggest contributions will come from simple measures such as slowing the speed of ships on the open ocean, and cleaning their hulls more regularly, rather than any revolution in the way ships are fueled.

Even so, the fueling of ships is going through a revolution — or rather, multiple overlapping ones. Three years ago, almost all were powered by heavy fuel oil or HFO, a sludgy refinery byproduct that often costs as much as a third less than crude.

HFO is cheap, but it’s nasty, too, with heavy sulfur content that is damaging to the environment. At the start of 2020, the IMO tightened its rules on sulfur emissions, causing any ship that couldn’t install pollution-control devices to switch overnight to cleaner diesel.

It’s possible that many of the broader problems in the oil market to this date can be traced back to that decision. It immediately added more than one million daily barrels of diesel demand in a market that typically churns out about 27 million barrels a day, and it has often been irrepressible diesel demand pulling up prices for crude over the past year.

As freight rates have returned to something like normality in recent months and fuel costs rather than port bottlenecks have resumed their role as the main headache for cargo lines, the spread between high-sulfur fuel oil and low-sulfur diesel has widened drastically. Diesel now costs more than twice as much as HFO.

Faced with soaring costs to power their fleets, shipowners are rapidly switching to alternatives. So far, the winner has been LNG, which typically delivers its energy at a cheaper price than diesel but was almost unknown as a marine fuel a few years ago.

Some 98% of car carriers on order are now LNG-powered, along with 49% of cruise ships, 32% of bulk carriers, 28% of tankers and 26% of container ships, according to a study in 2021 by TotalEnergies SA. Of new ships ordered this year, 444 — 63% of the total by tonnage — have been alternative fuel-powered, according to shipping data service Clarksons.

LNG’s dominance isn’t a huge win in emissions terms. While its carbon footprint is better than crude-oil products, that performance can deteriorate a lot if gas escapes without being combusted — a substantial problem with most marine engines. But the rising cost of diesel is making other fuels more attractive, too. Methanol made from natural gas and a 30-70 mix of biofuel and diesel are already competitive with the price of low-sulfur fuel oil, according to an October presentation given to the IMO.

All of that is going to start chipping away at shipping’s share of oil demand — but the holy grail for decarbonization efforts is to plug the industry into the emerging hydrogen economy. A ship powered with hydrogen or its more easily stored compound, ammonia, could be more or less zero-carbon if the fuel was produced with renewable electricity. The costs for that would be several times higher than even the diesel being used at present, but there’s already 136 ships in the order book that are designed to be switched to ammonia or hydrogen when those fuels become available.

The cartel-like nature of the shipping industry and regulatory capture at the IMO may help, rather than hinder, that process. Fuel is ultimately paid for not by shipowners but their customers, and ocean freight is so cheap — on the order of 10 cents or so per kilo — that most of us would barely notice the switch, especially when compared to the 10-fold increase in costs we went through over the past year.

By using the IMO to enforce some unity on the market and punish free riders, the ship owners with the largest fleets stand a good chance of passing those costs on, helping to further entrench their positions. AP Møller–Mærsk A/S, the biggest container line, is staying aloof from the shift to LNG-fueled ships, wagering the industry will end up shifting straight to zero-carbon fuels. In May, the IMO reached a consensus on including a carbon price in its coming suite of measures to reduce emissions.

The jury is still out on whether those moves can succeed in decarbonizing shipping. Either way, though the oil era will soon be as dead as steam and sail.