Maersk’s logo is seen on top of a building at Zona Franca in Barcelona, Spain, November 3, 2022. Photo: Reuters

The take-off in this decade is expected to be gradual as shipping companies grapple with factors such as trade volatility and geopolitical uncertainty, but gains are expected in the following 10 years.

“Between 2030 and 2040, I think this is where we’re going to see the real kind of volume shift to low carbon fuels,” said Emma Mazhari, CEO at Maersk Oil Trading.

Regulations including the European emissions trading scheme and maritime fuel standards are driving the shift, Mazhari said.

“We can already see now when we bunker in Europe, there is increased supply of low carbon fuel … so there’s definitely a lot of change coming,” she said.

Because of the expected shift, Maersk is no longer investing in single-fuel ships.

“If we invest in new assets now, they have to be dual-fuel, so that we have the optionality also to make sure that we can recoup the investments on a long-term scale,” Mazhari said.

Takeshi Hashimoto, CEO of Japan’s second-largest shipping company Mitsui O.S.K. Lines (MOL) told the conference that over the next five to 10 years, shipping companies will focus first on reducing emissions through “proven products” like LNG and methanol.

MOL is also aggressively exploring the use of wind power to assist ship propulsion systems, he said.

Hashimoto added that shipping decarbonisation has been going through a “stop and go” currently, though the development of low-carbon marine fuels like green ammonia, green methanol and biomethane will be an imperative for the industry over the longer term.

The shipping industry has been exploring lower-carbon alternative fuels to reduce its reliance on oil as it tries to meet carbon emission reduction targets set out by the U.N.’s International Maritime Organization.

An executive from Tata NYK Shipping said regardless of geopolitical volatility, decarbonisation needs to be a priority.

“Decarbonisation as a necessity and a strategy for shipowners will be there despite whatever we are hearing from the White House,” said Amitabh Panda, managing director at Tata NYK Shipping, a joint venture between India’s Tata Steel and Japan’s NYK Line.

But he acknowledged that the shifting geopolitical landscape complicates corporate decision making.

“We are not very sure when and how much to invest, so the capital allocation becomes an issue.”