Reevaluating maritime decarbonisation: the shift from fossil cargoes to electrification and efficiency

The shipping industry’s decarbonisation debate often begins with the wrong question. Rather than asking which fuel can simply replace today’s bunker mix, the more important issue is how much fuel demand will remain once the energy transition changes what ships actually carry.

That distinction matters because fossil cargo is not just a major share of global shipping by weight; it is also one of the sector’s biggest drivers of freight energy use. In the analysis by Michael Barnard’s TFIE Strategy Briefing, fossil fuels account for roughly 40% of maritime tonnage but close to half of maritime freight energy, largely because coal, oil and gas are moved over long distances in bulk. In other words, a tonne of LNG or crude moving across oceans is not the same energy problem as a tonne of scrap steel shifting regionally.

The implication is straightforward: as coal, oil and gas demand falls, the shipping work associated with them should shrink too. That means the industry does not need a one-for-one liquid-fuel substitute for the entire current fleet’s energy appetite. A substantial slice of today’s transport work should disappear along with the cargo.

Raw iron ore is another important part of the picture. It is not counted in the fossil-fuel tonnage share, but it is closely tied to the old industrial geography that the transition is already reshaping. As China’s construction boom slows, scrap use rises, electric arc furnaces gain share and some iron reduction moves closer to renewable power, long-haul ore shipping is unlikely to remain a permanent growth story. It will not vanish, but it is a weak foundation for assuming that bulk-shipping energy demand will simply keep rising.

The parts of shipping that do grow through the transition are often better suited to electrification than to new molecule-based fuels. Offshore wind support vessels, ferries, short-sea routes, harbour craft and some coastal services tend to have regular patterns, shorter distances and predictable terminals. Those characteristics make shore power, charging infrastructure and battery-dominant hybrid operation far more practical than they are for long-haul fossil cargoes.

That is where recent research has pushed the discussion in a more useful direction. Nature Energy work on short-sea electrification, cited in the TFIE analysis, found a larger-than-expected share of maritime energy could be served by batteries once route structure, vessel class and operating patterns are properly examined. For those segments, the answer is not a universal global fuel. It is electricity, charging and operational planning.

Efficiency also deserves a bigger place in the debate. Slow steaming, routing improvements, hull and propeller upgrades, wind assistance and better logistics all reduce the amount of fuel the remaining fleet has to burn. None of them eliminates the need for residual liquid fuels, but all of them shrink the problem those fuels must solve.

Only after those cuts does the residual fuel question become meaningful. According to the TFIE Strategy Briefing, biomethanol, biodiesel, hydrotreated vegetable oil and, in some cases, ethanol can all have a role on routes that still need dense liquid energy and where feedstock availability, lifecycle emissions and cost make sense. In that framing, hybrids make alcohol fuels range extenders rather than competitors to electrification.

That is also why hydrogen and ammonia remain difficult centrepieces for maritime decarbonisation. They require costly new fuel chains, face handling and safety complications, and often ignore the fact that the fuel pool itself is shrinking. Synthetic fuels bring their own energy losses and electricity demands. LNG, meanwhile, continues to look more like a fossil incumbent with a different label than a clean break from the current system.

Industry reports reflect the uncertainty. Lloyd’s Register said in 2023 that the sector faces two broad alternative pathways, one centred on hydrogen-based fuels and another on biofuels, with e-ammonia and liquefied bio-methane emerging as major candidates in its modelling. Gasum has argued that large-scale synthetic fuel adoption remains unrealistic for shipping in the near term because of the huge electricity requirement, limited supply and infrastructure gaps, even if methane-based fuels remain more workable for some operators.

The policy framework is improving, with more attention on well-to-wake emissions and tighter International Maritime Organization targets. But targets alone do not create viable fuel systems. A pilot bunkering trial is not fleet transformation. Real progress will be measured in operating routes, verified emissions, repeat orders and economics that survive beyond demonstration projects.

The broader lesson for industrial decarbonisation is that shipping should not be assessed against today’s bunker pool as though it must be replaced molecule for molecule. Much of the fuel-intensive work is tied to fossil cargoes and other legacy bulk flows that are already exposed to structural decline. Once that shrinking denominator is acknowledged, the maritime fuel transition looks very different: less a search for one perfect replacement and more a managed shift towards electrification, efficiency and a smaller set of residual liquid fuels for the journeys that still need them.

The first transition in shipping, then, may not be a new fuel at all. It may be the disappearance of a large share of the long-haul fossil work that made the current fuel system seem so large in the first place.