The shipping sector is still off track to meet its climate target of having at least 5-10% of the fuel used in international shipping come from scalable zero-emission sources by 2030, according to a new progress report.

The fourth annual report of its kind, Progress towards shipping’s 2030 breakthrough – 2025 edition, follows the International Maritime Organization’s (IMO) agreement on the Net Zero Framework earlier this year. Developed by the UCL Energy Institute, the Global Maritime Forum’s Getting to Zero Coalition, and the Climate High-Level Champions, it finds that although technology is advancing, weak demand signals and stalled finance are risking delaying the transition and negatively impacting future supply.

Critical details of the framework, including the incentives the IMO intends to use to spark early adopters of scalable zero-emission fuels, are subject to further negotiation before the framework enters into force in 2027. These negotiations, as well as the time needed for the industry to understand and react to their implications, will determine whether there remains a plausible path towards zero- or near-zero emission fuel types making up 5% to 10% of shipping fuel by 2030.

The report makes clear that to stay on track, the shipping industry must act on three fronts:

Support a robust IMO reward mechanism that clearly prioritises scalable zero-emission fuels (SZEF), ensuring alignment on definitions, early adoption of guidelines, and a design that gives investors and operators confidence.

Increase awareness of the growing risks facing non-SZEF-aligned vessels, both for individual owners and the wider system, to prompt timely retrofits and investment in future-ready fleets.

Help national actors and sub-global policy to gap-fill where the IMO Net Zero Framework might not provide sufficient support.

The agreement of the IMO’s Net Zero Framework was a significant feat of multi-lateral diplomacy, but we are not yet seeing the level of momentum the industry needs. If the IMO produces guidelines that steer rewards towards the first-movers on scalable, zero-emission fuels, it will go a long way towards aligning supply, demand, and finance, and meeting the 2030 goals.

Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum

The progress report finds that the technology needed to support SZEF uptake has progressed well, as have developments related to the supply or availability of these fuels. Methanol engines have progressed to a commercial phase, ammonia engines are entering the final stages of testing, and methanol propulsion is making steady progress – signalling a viable multi-fuel future.

However, demand trends within the industry paint a less optimistic picture. A significant proportion of the vessels being ordered and due for delivery are not SZEF-capable, adding pressure on retrofitting and yard capacity, which increases the risk of stranded assets. Current projections indicate that only around one-third of the demand needed to meet the 5% target would materialise by 2030, unless the industry steps up its orders of SZEF-capable vessels. That shortfall amounts to approximately 9 million tonnes of fuel oil equivalent, or 400 large container ships capable of running on scalable zero-emission fuels.

One of the most notable trends we have seen in this year’s progress report is the continued expansion of fuel supply initiatives and pilot projects across multiple regions. This tells us that technology readiness is no longer a limiting factor. However, demand and finance have not kept pace. Unless all these levers move together, the 2030 tipping point will remain out of reach and supply developments could also stall. This underscores the importance of treating this transition as a systems challenge, not just a fuel challenge.

Dr. Domagoj Baresic, Senior Research Fellow at the UCL Energy Institute.

Each year since 2021, the progress report has observed five key ‘system change levers’ for the industry and tracked their progress towards enabling the 5% SZEF target by 2030. These include:

• Supply (partially on track): Current SZEF production in the pipeline could cover somewhere between just over a third (32%) and all (134%) of the SZEF supply required by 2030 — the uncertainty here lies in how the current pipeline continues to develop. However, technology to support SZEF has progressed well, and the overall pipeline is continuing to expand.
• Demand (off track): Current estimates predict a significant shortfall in SZEF-capable vessels. Unless demand significantly ramps up, the current order book for these ships will only deliver around 37% of the SZEF demand needed to achieve the 2030 target.
• Finance (off track): Despite early progress in SZEF investment, momentum has stalled. Funding continues to flow disproportionately toward conventional fossil-fuelled vessels, and stronger policy signals will be essential to unlocking more private capital.
• Policy (partially on track): The IMO’s Net Zero Framework marked a significant moment for shipping decarbonisation policy. However, critical details are still to be confirmed and progress at the national level remains uneven.Civil society (partially on track): Awareness of equity issues is growing within the maritime sector, with greater visibility around seafarer training, workforce diversity and gender imbalance. Translating this awareness into tangible action remains the next step.

It is estimated that about 5-10% of all the fuels used by the shipping industry in 2030 need to be SZEF for the industry to be on track to meet the ambitions laid out in the IMO’s 2023 Greenhouse Gas (GHG) Strategy. The 5% target is considered the critical mass at which the infrastructure, supply chains, and technology that support zero-emission fuels mature and enable exponential growth.

If the 5% target is not achieved, it could jeopardise the industry’s entire 2050 net-zero goal. Global shipping is responsible for around 3% of the world’s GHG emissions – more than Germany – so it is a crucial sector to decarbonise. With global trade predicted to quadruple by 2050, emissions will skyrocket without urgent action.

Without greater alignment across supply and demand, finance, and regulation, the tipping point envisioned for 2030 will remain out of reach. The direction of travel is understood – the challenge now is to move with greater clarity, coordination, and pace, backed by finance, shaped by fair policy, and grounded in a just transition that benefits people and communities across the maritime sector and beyond.

Dan Ioschpe, the Climate High-Level Champion for COP30
Source: Global Maritime Forum