Shipping’s green fuel push hits regulatory, cost and supply hurdles

By Rikordias Siahaan

Efforts to scale green fuels for shipping are accelerating, but industry leaders warn that regulatory uncertainty, fragmented responsibilities, and limited fuel supply continue to hinder progress toward net zero.

Speaking at the “Scaling Green Fuels for Net Zero Shipping” panel at Asia Pacific Maritime (APM) 2026, participants highlighted a growing disconnect between ambition and implementation, even as pilot projects and investments increase.

A central challenge lies in the lack of regulatory clarity at the global level. New Wei Siang, Director of Maritime Decarbonization & Net Zero Pathways at the Maritime and Port Authority of Singapore, said uncertainty around the International Maritime Organization’s (IMO) net zero framework has slowed decision-making.

 “The direction is clear… but how we’re going to get there is a little bit less clear,” he said during the panel, urging stakeholders to “take a long-term view” despite short-term policy fluctuations.

While global rules remain under discussion, investments and technological development are already moving ahead. Torben Norgaard of the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping noted that decarbonization is progressing, though not yet driven by fuel switching.

“Decarbonization… is happening as we speak, primarily driven by energy efficiency measures,” he said, adding that investments in energy transition technologies are “increasing year-on-year at an exponential rate.”

However, Norgaard cautioned that current regulatory frameworks are insufficient to trigger large-scale fuel adoption. “A demand signal is not enough to trigger the off-screen investments,” he said, emphasizing the need for stronger incentives and coordination across the energy value chain.

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The issue of responsibility sharing across stakeholders also emerged as a key barrier. Wei Jie Lau of the Global Centre for Maritime Decarbonisation said the industry still lacks clarity on who bears the cost of transition.

“Fundamentally the question is who is paying and who is benefiting… currently it isn’t clear,” he said, pointing to new financing models aimed at distributing costs between shipowners and operators.

Beyond regulation and financing, supply constraints remain a major obstacle. Wei Siang noted that while hubs like Singapore are preparing infrastructure for multiple fuel types, global production capacity for green fuels is still limited.

“The production of fuel supply… still needs to be scaled up,” he said, adding that availability and cost remain significant concerns, particularly for fuels such as green methanol.

The transition is further complicated by risk and insurance challenges. Capt Hari Subramaniam of Howden stressed that the absence of clear standards makes it difficult to price and manage risk.

“In the absence of statutory regulations, then it becomes individual risk assessments… how much is enough, or how less is enough,” he said.  He also pointed to broader structural constraints in fuel availability.

“We are only about 2% of the entire carbon footprint… what makes you think that we are so privileged that everything will come to our 2%?” he said, referring to competition for low-carbon fuels across sectors. Despite these hurdles, pilot projects are playing a crucial role in bridging the gap toward commercialization. Wei Jie Lau said trials are helping define technical standards and reduce uncertainty for stakeholders.

“Only when [insurers] are happy… that’s when trials can happen. And if trials happen, that means there’s a pathway… to a more commercially sustainable model,” he said.  Looking ahead, Norgaard emphasized that no single fuel solution will dominate, urging shipowners to maintain flexibility in their investment strategies.

“Complexity is increasing… the clear recommendation is to build in optionality,” he said, highlighting multiple pathways including gaseous fuels, liquid fuels, and electrification for short-sea shipping.

As the industry navigates competing technologies and uncertain timelines, panelists agreed that collaboration across sectors and stronger global alignment will be essential.

 “We still very much believe in multilateral organizations… to tackle international challenges like this,” Wei Siang said, reaffirming the role of the IMO in shaping the sector’s decarbonization pathway.

For now, the transition remains a balancing act between ambition and pragmatism, with scaling green fuels dependent not only on technology, but on aligning policy, investment, and global supply chains.

Editing by Reiner Simanjuntak