19 sept 2025
Despite this year’s breakthrough agreement on the International Maritime Organization’s Net Zero Framework, the shipping sector remains off track to meet its 2030 climate target of having 5-10% of international shipping fuels come from scalable zero-emission sources, according to a new progress report released today.
The fourth annual “Progress towards shipping’s 2030 breakthrough” report, developed by UCL Energy Institute, the Global Maritime Forum’s Getting to Zero Coalition, and the Climate High-Level Champions, reveals a concerning disconnect between technological readiness and market implementation.
While technology for scalable zero-emission fuels (SZEF) has advanced significantly—with methanol engines now commercially available and ammonia engines in final testing stages—demand and finance trends show critical gaps that threaten the industry’s decarbonization timeline.
“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,” states Jesse Fahnestock, Director of Decarbonisation at the Global Maritime Forum. “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.”
The report highlights that a significant proportion of vessels currently on order are not SZEF-capable, creating risks of stranded assets and increasing pressure on retrofitting capacity. Current projections indicate that only about one-third of the demand needed to meet the 5% target would materialize by 2030 without accelerated action. This shortfall represents approximately 9 million tonnes of fuel oil equivalent—or roughly 400 large container ships worth of capacity.
Dr. Domagoj Baresic, Senior Research Fellow at the UCL Energy Institute, emphasized: “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.”
Critical details of the IMO’s framework, including incentives for early adopters of scalable zero-emission fuels, remain subject to negotiation before implementation in 2027. These negotiations will be decisive in determining whether the industry can maintain a viable path toward its 2030 targets.
The 5% target represents the critical mass at which infrastructure, supply chains, and technology supporting zero-emission fuels would mature sufficiently to enable exponential growth. Failure to reach this milestone could jeopardize the industry’s 2050 net-zero goal—a critical concern given that global shipping accounts for approximately 3% of world greenhouse gas emissions, equivalent to more than Germany’s total emissions.
Climate High-Level Champion for COP30, Dan Ioschpe, warned: “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.”
The report recommends three critical actions: supporting a robust IMO reward mechanism prioritizing scalable zero-emission fuels, increasing awareness of risks facing non-SZEF-aligned vessels, and helping national actors implement policies to fill gaps where the IMO framework might provide insufficient support.