The shipping industry's transition to cleaner fuels is entering a difficult phase. Alternative-fuel vessels are reaching commercial service, bunkering infrastructure is expanding, and engine technology is advancing. Yet investment in future capacity is losing momentum just as the industry's 2030 emissions targets draw closer.
A new report from the UCL Energy Institute and the Getting to Zero Coalition identifies a growing disconnect between technological readiness and commercial investment. Released during New York Climate Week, the 2026 edition of Climate Action in Shipping: Progress Towards Shipping's 2030 Breakthrough examines progress toward achieving 5% to 10% adoption of scalable zero-emission fuels by 2030.
The findings suggest that the central obstacle is shifting from technology development to investment risk. Shipowners face uncertainty over future operating costs, cargo owners are becoming less willing to pay premiums for lower-emission transportation, and fuel producers lack the long-term purchasing commitments needed to finance commercial-scale projects.
Several indicators show measurable technological progress. Methanol bunkering availability increased approximately 53%, with the number of ports offering the service rising from 19 to 29. The industry also completed its first ship-to-ship ammonia bunkering operation and conducted sea trials involving large ammonia-fueled vessels.
Fleet deployment has accelerated as well. Deliveries during 2025 increased the tonnage of methanol-capable vessels in service from 2.3 million to 7.7 million gross tons, more than tripling the installed capacity. These developments demonstrate that some of the technology and supporting infrastructure required for alternative-fuel shipping is progressing beyond demonstration projects.
However, the industry's future order book points in the opposite direction. Vessels compatible with scalable zero-emission fuels accounted for just 5.7% of newly ordered tonnage, compared with 9.5% previously. That represents a decline of 3.8 percentage points, or approximately 40% of the earlier share. The slowdown is significant because commercial vessels typically remain in operation for decades, making current investment decisions important to the industry's longer-term emissions trajectory.
Fuel production presents another constraint. According to the report, qualifying scalable zero-emission fuel production remained below 0.02 exajoules in 2025, against a milestone of 0.10 exajoules. Output was therefore more than 80% below that benchmark.
The report's low- and medium-growth scenarios indicate that production may not exceed the minimum 2030 milestone of 0.6 exajoules until 2032–2035. Reaching that minimum would require annual qualifying fuel production to increase more than thirtyfold from its 2025 level. These are modeled scenarios rather than predetermined outcomes, but they illustrate the scale of additional capacity needed.
Commercial demand is weakening at the same time. The premium cargo owners are willing to pay for lower-carbon shipping declined from 4.5% to 3%, a reduction of one-third. The proportion expecting to pay more within five years also fell from 65% to 45%, a decline of 20 percentage points.
That shift creates a financing problem across the maritime supply chain. Shipowners need sufficient customer demand to justify alternative-fuel vessel investments, while fuel developers need bankable purchasing agreements before committing capital to production facilities.
Financing data reinforce the concern. Shipping-specific sustainable debt issuance fell from $3.4 billion in 2024 to approximately $3 billion in 2025, a decline of about 12%. Meanwhile, institutions participating in the Poseidon Principles recorded their strongest annual improvement in climate alignment, with approximately 29% of global ship financing now covered by transparent, IMO-aligned climate disclosures.
Improved climate reporting, however, is not equivalent to financing new infrastructure. Greater transparency does not necessarily produce additional investment in qualifying fuels, compatible vessels or port facilities.
The International Maritime Organization's delayed Net-Zero Framework has introduced another source of uncertainty into an already difficult investment environment. The framework received initial approval in April 2025, but negotiations over its formal adoption were postponed in October of that year.
The proposed regulations would establish international greenhouse gas fuel-intensity requirements alongside an emissions-pricing mechanism. They would also create financial incentives for qualifying zero- and near-zero-emission fuels. The requirements are intended to apply to large ocean-going vessels exceeding 5,000 gross tons, which account for more than 85% of international shipping emissions.
The postponement represents at least a year of lost regulatory certainty. Under the original timetable, the regulations were expected to enter into force in 2027. With adoption now potentially occurring in December 2026, the required 16-month implementation period would push the earliest anticipated entry into force into approximately April 2028. That assumes adoption proceeds without further delays.
The consequences extend beyond regulatory compliance. The delay affects three interconnected commercial decisions:
These figures quantify changes in the market, rather than losses directly attributable to the IMO postponement. The report also identifies economic pressures, energy security concerns, geopolitical disruption and supply-chain challenges as contributing factors.
For project developers, the production gap is particularly relevant. Even if qualifying fuel production reached its 2025 milestone of 0.10 exajoules, another sixfold expansion would be required to meet the minimum 2030 benchmark. Delays in securing financing and purchasing agreements could narrow the time available to construct and commission the necessary facilities.
Regional policies are providing some investment signals while international negotiations continue. Europe's FuelEU Maritime regulation establishes greenhouse gas-intensity requirements for energy used aboard covered ships, while initiatives in Singapore and the United Kingdom support alternative-fuel infrastructure and related investment.
These programs create opportunities for early deployment, but regional differences can complicate compliance and fuel procurement for international operators. They also cannot guarantee that sufficient qualifying fuel production will become available globally.
The report identifies technology and fuel supply, along with civil society activity, as partially on track. Demand, finance and policy are classified as not on track. Its authors recommend adoption of the IMO Net-Zero Framework during the proposed December 2026 session, alongside stronger national measures to support fuel production. The IMO has scheduled its next Marine Environment Protection Committee meeting for November 30–December 3, with a possible extraordinary session on December 4, subject to confirmation.
The commercial issue now facing the shipping industry is whether investment can accelerate quickly enough to take advantage of technological progress. Although the report considers the 2030 fuel-adoption target technically achievable, its findings indicate that current demand and financing trends will need to change substantially.
For shipping companies, fuel suppliers and their customers, the next phase of the transition will depend as much on the ability to secure long-term commercial commitments as on further technological development.
