The urgency of scaling up green fuel production

Producing green fuels for international shipping is no longer a technological challenge, as the fundamental technologies are known. What remains is scaling them to market in a way that can drive down costs and meet future demand. This transition depends on major investments across the value chain and close coordination between governments, regulators, energy producers, ports and shipowners.

Urgency is key. While it is tempting to wait for more refined technologies, we might not have enough time. Every delay in ramping up green fuel production can have a huge impact on reaching our global climate goals.

Green fuels are typically three to five times more expensive than fossil alternatives. Options such as green ammonia and e-methanol already exist in Denmark, where commercial-scale production and early adoption are demonstrating their viability. Still, their broader competitiveness depends on strong policy support. Regulatory interventions to increase the demand for e-fuels, by reducing their cost and increasing the cost of fossil fuels, will be essential to level the playing field and accelerate uptake across global shipping. Such measures can help ensure that fossil fuels reflect their true societal and environmental costs.

A turning point came in April 2025 when the IMO approved draft regulations to achieve net-zero shipping by 2050. These include a global fuel standard requiring ships to reduce fuel greenhouse gas intensity over time, calculated on a well-to-wake basis. They are supported by an economic mechanism, requiring high-emitting ships to purchase remedial units, while rewarding the use of low- or zero-emission fuels. Together, these measures are shaping investments and steering the market toward low- and zero-emission fuels. Thus, supply-side certainty of green fuels is taking shape, but its strength depends on continued progress on the demand side.

Increasing the offtake by growing the green fleet

Given ocean-going vessels typically remain in service for around 25 years, it is essential to act today to ensure the future fleet can use carbon-neutral fuels by 2050. From 2030, all new ships ordered by Danish shipowners are to be made ready for green fuels or other zero-emission means of propulsion. This commitment is reflected in current order books, where over 80 percent of total tonnage is already compatible with green fuels. Laying the groundwork for a green fleet sends a strong market signal that, once green fuels are available, they will find a buyer.

Even with uncertainty regarding which fuels will dominate the future, shipowners are responding to climate targets and regulatory signals. In 2024 alone, global orders for alternative-fuelled ships rose by 50 percent, with more than 600 new vessels advancing the decarbonisation of maritime transport. A growing share of these, especially among containerships, are designed to run on green fuels.