Shipping must pool demand to unlock alternative fuel investment, says EmissionLink

Shipping industry leaders at SMM in Hamburg emphasized the need for collective demand aggregation to spur investment in alternative fuels necessary for zero-emission shipping. Managing Director Philippos Ioulianou of EmissionLink stressed that the maritime sector should learn from past energy transitions instead of tackling the supply-and-demand issues head-on.

Limited fuel availability and high costs continue to impede decarbonization efforts. Shipowners are hesitant to commit without assured supply at reasonable prices, while fuel producers demand long-term demand certainty before investing significantly. This chicken-and-egg dilemma has persisted for years. However, Ioulianou believes we are progressing in the right direction, citing lessons from industries like solar power that have benefited from regulation and incentives.

The EU's FuelEU and Emissions Trading System (EU ETS) have already shown how effective regulation can drive demand for low-carbon fuels and foster industry collaboration. By aligning shipowners and charterers around shared compliance needs, the industry could generate the scale and certainty needed to expedite alternative fuel adoption and achieve a market with accessible and affordable low-carbon options.

Ioulianou also advocated for reinvesting revenues from maritime activities under the EU ETS directly into maritime decarbonization projects. With anticipated billions of euros in EU ETS revenues for EU Member States, a larger share should fund projects addressing decarbonization barriers and advancing alternative fuel infrastructure, particularly in major bunkering hubs.

He further stressed the importance of green shipping corridors to build supply chains: corridors should incentivize vessels that cut emissions using cleaner fuels or energy-efficient technologies, creating an environment where investing in low-carbon operations becomes commercially viable. The panel, moderated by Gary Howard, featured insights from Hanno Bromeis, Alex Hueser, Arne Maibohm, and Dr. Charlie McKinlay, underscoring the urgency of collective action and regulatory guidance in navigating the complex path towards maritime decarbonization.