Decarbonizing the shipping sector is essential, but not an easy task. This goes beyond just adopting alternative fuels and modernizing the fleet. According to a new study by EY-Parthenon, the strategy and transactions arm of EY Greece, decarbonisation represents a broader industrial, technological, financial and regulatory challenge affecting the entire maritime value chain. As such, it requires a comprehensive and coordinated strategic approach.
With approximately 80% of global merchandise trade transported by sea, such a systemic shift must be implemented in a way that ensures the continuity of maritime transport and the smooth functioning of international trade.
The pace and success of decarbonisation of the maritime sector will depend largely on the readiness of the wider maritime ecosystem, rather than on regulation alone, the EY-Parthenon study finds. The availability and cost of alternative fuels, port and supply infrastructure development, shipyard capacity, as well as financing and coordination among stakeholders, are all critical prerequisites for achieving a viable transition. While compliance requirements and much of the transition costs are borne at ship level, many of the key factors that determine successful decarbonisation lie elsewhere across the maritime value chain.
Key challenges on the path to decarbonisation
The current composition of the global fleet highlights the scale of the challenge. The penetration of alternative fuel ships remains limited, as only 2.4% of ships are currently capable of operating on alternative fuels. However, when measured by gross tonnage, the figure rises to 8.9%, indicating that these capacities are mainly concentrated among larger ships. At the same time, the decline in the number of major active shipyards and their increasing geographical concentration further restricts the transition process, as fleet renewal depends heavily on the ability of shipyards to deliver newbuildings and modernize existing ships.
The market for alternative fuels also remains constrained. Today, alternative fuels represent less than 1% of global shipping energy demand, while their cost remains three to seven times higher than conventional marine fuels. Demand for alternative fuels is expected to grow significantly over the coming years, but overall supply is unlikely to expand at the same pace or with sufficient predictability. As a result, shipping will increasingly compete with other sectors – including aviation, power generation, and heavy industry – for access to limited renewable energy resources, green hydrogen, and sustainable feedstocks.
The study also highlights that transition pathways differ significantly between regular charging and vagrancy charging. At the same time, regulatory frameworks and market-based mechanisms – including those introduced by the International Maritime Organization (IMO), FuelEU Maritime, and the European Union Emissions Trading System (EU ETS) – are gradually turning greenhouse gas emissions into a direct compliance cost.
Factors that will determine a successful transformation
Under these circumstances, there is no single solution capable of achieving decarbonization of the maritime transport sector. A successful transition will require a combination of energy efficiency measures, operational improvements, transitional fuels, technological flexibility, and the gradual deployment of alternative fuels as they become widely commercially available.
According to the study, the success of this transition will depend on effective timing, close coordination between the public and private sectors, a clear and predictable regulatory framework, and a fair distribution of financing gaps, risks and responsibilities across the entire maritime value chain. Finance will play a particularly important role, requiring targeted financial instruments and risk-sharing mechanisms capable of mobilizing investments in ships, fuel, ports, infrastructure and emerging technologies.
Commenting on the study results, Yannis Petzis, Partner at EY-Parthenon Greece, said:
“For the shipping industry, decarbonization is not just a technological or regulatory challenge; it is fundamentally an issue of long-term resilience and competitiveness that concerns the entire maritime value chain. The transformation must move forward despite current constraints and without disrupting global trade. Successfully achieving decarbonization in the transport sector requires a realistic roadmap that identifies practical transformation paths, capital requirements, and financial instruments capable of bridging the investment gap in the sector.”
Yiannis Perros, Partner at EY Greece and Head of Shipping at EY Global Assurance, added:
“There is no single factor that can push shipping towards decarbonisation. Success will depend on the effectiveness of regulatory frameworks, public policies, the development of alternative fuel supplies, modern infrastructure, and available capital. Immediate priorities should focus on improving energy efficiency, implementing operational improvements, and accelerating the adoption of digital solutions.”
Source: EY Greece
