Shipping accounts for roughly 3% of global greenhouse gas (GHG) emissions – about as much as aviation. Yet, while planes dominate the public discourse, the maritime sector quietly sails along, transporting over 80% of the world’s trade volume, powered by some of the dirtiest fossil fuels available.
At the moment, 99% of maritime transport runs on desulfurised heavy fuel oils (VLSFO). Concerns about acid rain in the 90s led to progressive global policy to remove the sulphur from shipping fuels; however, they are nevertheless very carbon intensive. Many countries are switching to liquefied natural gas (LNG), hoping for easy emission reductions, but here’s the issue: LNG leaks methane all along the value chain and there is widespread concern that investing in LNG just delays the deep decarbonisation by locking us into burning fossil fuels.
Enter the FuelEU Maritime Regulation: the EU’s plan to alter course
As part of the “Fit for 55” package in 2021, the EU launched the FuelEU Maritime regulation. Its goal is to reduce the GHG intensity of shipping fuels by 2% by 2025 and 80% by 2050. The regulation emphasises shifting towards renewable fuels of non-biological origin (RFNBOs) but also includes measures to make ports more energy efficient and enforcing onshore power connection in ports.
So, what’s on the horizon for green shipping fuels?
There are four main e-fuels (which fall within RFNBOs) discussed in the context of decarbonising shipping: e-ammonia, e-methanol, e-Fischer Tropsch (FT) diesel, and e-LNG (Figure 1). All require green hydrogen, which is produced via highly energy-intensive water electrolysis. Additionally, e-methanol, e-FT diesel and e-LNG require CO2 from direct air capture (DAC). Meanwhile, e-ammonia is produced by combining green hydrogen with nitrogen.
To compare the impacts of these technologies in a 2050 net-zero scenario, we conducted a prospective Life Cycle Assessment (pLCA) of the four technological options above (Ingwersen et al, 2025). We also included ship-based carbon capture and storage (SBCCS) in our analysis, as ships are the only transport mode large enough to potentially install CCS onboard to capture CO2 directly from the exhaust gas to be transported to the shore and stored underground.
Advanced pLCAs link integrated assessment models (IAMs) to life cycle inventories (LCIs), allowing for projections of technological advancements and future markets. We chose this method to assess the future environmental impacts and suitability of the technological options to reach the climate targets defined in the Fuel EUMaritime regulation in 2050. The system boundaries of our LCA are shown in Figure 1, including the whole life cycle of the technological options from well to wake (WTW).
We did not include battery-powered shipping in our analysis, as the energy required for most shipping routes would require prohibitively large, heavy and expensive batteries. However, thanks to advances in battery technology, battery-powered shipping might become another viable option for reducing emissions in the future (Moon, Hee Seung, et al. 2025).
LCA from well to wake: there is no flagship technology
We assessed various environmental impacts of the technological options shown in Figure 1. None of the technological options emerged as the silver bullet to decarbonise shipping. However, e-ammonia and e-FT diesel emerge as the most promising e-fuel options when considering both environmental impacts and costs in our analysis. However, these also face significant trade-offs. Figure 2 shows a schematic overview of the results of our pLCA and the economic analysis based on Allgoewer et al. (2025). It also incorporates insights from other existing studies.
Our results indicate that e-ammonia, e-FT diesel, and e-methanol could meet the 2050 FuelEU Maritime target, but e-LNG and SBCCS could not. Among the e-fuels analysed, e-ammonia exhibited the highest potential for GHG emission reduction, closely followed by e-FT diesel. For these two e-fuels, we find a reduction of the WTW GHG emissions by 86–92 % compared to VLSFO. Meanwhile, WTW GHG emissions of e-LNG and fossil fuels with SBCCS are not compliant with the regulation. SBCCS only achieves a 50–58 % reduction of WTW GHG emissions compared to VLSFO and e-LNG exceeds the WTW GHG target due to ship-level methane slip by 48 % or more in case the methane slip is higher.
The comparative analysis of various environmental impacts reveals that among e-fuels, e-ammonia conversion in solid oxide fuel cells has the lowest environmental impact in eight out of twelve environmental impact categories, and e-methanol exhibits the highest toxicity levels. Among fossil fuels, VLSFO with SBCCS has the highest environmental impact in ten environmental impact categories. This is because additional VLSFO is burned to operate SBCCS.
Water electrolysis and the combustion process are the most relevant sub-processes contributing to the environmental impact of the analysed fuel pathways. Specifically, NOx emissions are the main cause of the harmful environmental impact caused by the combustion process, leading to particulate matter formation, photochemical oxidant formation, eutrophication, and acidification. We find that electrolysis has a life cycle toxic impact caused by electricity production.
Although it is the most immature technology, we find that e-ammonia could be the cheapest option in the long run, especially when used in fuel cells where less fuel is used. Meanwhile e-methanol emerges as the most expensive e-fuel. Figure 2 in our publication shows the results of the pLCA comparing nine different fuel pathways in 12 environmental impact categories.
Overarching challenges and some solutions: high electricity use and costs
E-fuel production requires large amounts of renewable electricity (Ueckerdt et al., 2021). It is therefore important that e-fuel production does not compete with direct electrification efforts (e.g., in transportation, heat etc.). Instead, the electricity used for e-fuel production could be used in a way to enhance system flexibility and support system integration. Specifically, the increasingly abundant renewable electricity could be used for e-fuel production when supply exceeds demand to avoid curtailments. Additionally, the maritime sector should prioritise reducing energy consumption as much as possible by fully leveraging all available energy-efficiency options. These include measures such as improved hull design, wind assistance, and speed and route optimisation, as recommended by the International Maritime Organisation.
E-fuels are expensive, and targeted measures should aim to close the cost gap between suitable e-fuels and fossil fuels in shipping. Since January 2024, all large ships (5’000 gross tonnage and above) entering EU ports are included in the EU’s Emissions Trading System (EU ETS). This helps raise the cost of fossils, making e-fuels more competitive, but it’s important that the emissions cap continues to fall predictably into the future, providing a clear incentive for deep decarbonisation within the shipping sector by transitioning to e-fuels.
The issues with hydrogen
All e-fuels depend on green hydrogen, which has issues with both its production and transportation. The EU Commission has defined green hydrogen as a key strategic technology for decarbonising hard-to-abate sectors and has defined a target of 10 million tons for both EU-based hydrogen production and importation by 2030. However, the EU is likely to grossly miss its green hydrogen targets. The required EU-based electrolyser capacity by 2030 will likely fall short of expectations, and shipping will have to compete with sectors like steel and aviation for the limited green hydrogen supply. Additionally, the EU intends to import green hydrogen from regions such as North Africa, often repurposing natural gas pipelines. This is problematic due to hydrogen leakage, where hydrogen’s indirect global warming potential (GWP100) of twelve times that of CO2 could significantly increase the life cycle emissions of e-fuels. We therefore call for (i) the strategic use of hydrogen only in sectors where it is most needed (e.g., aviation, shipping, steel production) and (ii) strict monitoring of hydrogen leakage during its transportation to accurately assess hydrogen and hydrogen-based fuels life cycle emissions.
Setting a course towards deep decarbonisation
The investment decisions taken today will lock in the fuels and technologies that shape the shipping industry for decades, and choosing the wrong path now could lead to stranded assets, inefficiencies, and, most importantly, higher emissions down the line. Policymakers, especially, have a crucial role to play in steering the sector in the right direction.
But here’s where things get tricky. One term dominates the current policy debate in Brussels: technology neutrality. The idea? Let the market decide which solutions win, as long as they meet incremental climate targets.
Unfortunately, the technology-neutral approach of the FuelEU Maritime regulation risks the continued use of fossil options like LNG and encourages the development of e-LNG projects despite e-LNGs likelihood of failing to meet FuelEU Maritime targets for 2050 (Fig. 2 in Ingwersen et al, 2025). For example, the e-NRG Lahti project is supported through the EU’s Innovation Fund, meaning the EU is subsidising the research, development, and buildout of technologies and their supporting infrastructure, which our analysis has shown are not capable of reaching the EU’s own targets considering real-world ship-based methane leakage.
Policies should be designed to promote technologies with the highest decarbonisation potential and exclude options such as e-LNG that are (at best) unlikely to meet FuelEU Maritime targets by 2050. Policies must prevent the lock-in to fossil-based alternatives like LNG and natural gas. This is critical to maintaining a viable trajectory toward net zero emissions.
We recommend a more targeted approach towards more suitable options such as e-ammonia and e-FT diesel, specifically addressing their unique challenges; e.g., developing a stringent safety framework for safe onboard fuel handling for the toxic e-ammonia, and ensuring compliance with NOx-standards of new fuels and engines.
If policymakers don’t step in with clear guidance, incentives, and guardrails, we risk a future where the shipping industry clings to familiar but flawed options, delaying real progress.
