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Over the last few decades, numerous environmental initiatives have been introduced as part of a global effort to tackle climate change and better protect the planet. From awareness campaigns to policies to regulation, these initiatives have aimed to change the habits and responsibilities of individuals, corporations and industries alike.
In this article, we look at the maritime energy transition – and explore the broad systemic shifts in fuels, technologies and regulations that we are seeing across the global maritime sector.
What is the energy transition?
The energy transition describes the shift away from using energy derived from fossil fuels (e.g. coal and oil) and towards energy generated using alternative renewable fuels (e.g. wind, solar). Renewable fuels produce limited or no carbon emissions and are therefore cleaner and more sustainable than fossil fuels. Spurred on by fears around climate change, energy security and environmental sustainability, the energy transition aims to transform the world’s overall energy system.
While there have been various energy transitions in the past (e.g. the 19th century shift from using wood to coal), the one we see today is driven by an urgent need to protect the future of our planet.
What is the difference between the energy transition and the green transition?
The energy transition is closely linked to the green transition. Some people even use the two terms interchangeably, however doing so is not strictly accurate.
It’s best to think of the green transition as a subset of the energy transition. The energy transition deals with all elements of the energy system (e.g. electricity generation, transportation, heating and industrial processes). On the other hand, the green transition has a more specific focus on improving the environmental sustainability of economic activities (e.g. global shipping) by reducing their carbon footprint.
What is the timeline for the energy transition?
In 2015, the Paris Agreement (an international treaty aiming to limit climate change) was adopted by 196 parties. The goal of the treaty was to limit global warming and prevent the Earth’s temperature from increasing by any more than 1.5 °C. To achieve this requires meeting ambitious emissions reduction targets for all types of greenhouse gases, across all economic sectors, and in all parts of the world. As a result, there have been a range of near-, mid- and long-term targets introduced by various countries and regulatory bodies around the world. For example, the EU has adopted the:
- European Green Deal (launched in 2020) – aims for net-zero emissions by 2050
- Fit for 55 package (launched in 2021) – aims for a 55% cut in CO2 emissions by 2030 (from 1990 levels)
Despite this, the International Renewable Energy Agency (IRENA) published a report in 2024 saying:
“The world is far off track to limit global temperature rise to 1.5 degrees Celsius (°C) above pre-industrial levels, as clearly stated by the IPCC Sixth Assessment Report … Accordingly, short-term climate ambition needs to be enhanced to ratchet up the energy transition.”
So, let’s look at how the energy transition is unfolding in different parts of the world and how timelines vary.
As of November 2023, approximately 145 countries had announced, or were considering net-zero targets, covering close to 90% of global emissions. Notably, this included China, the EU, the USA, and India, who jointly represent more than half of global greenhouse gas emissions.
In the majority of instances, pledges aim to achieve the target net‐zero emissions by 2050, however there are some exceptions, for example:
| Country | Aims to reach net-zero emissions by |
| Finland | 2035 |
| Austria | 2040 |
| Iceland | 2040 |
| Sweden | 2045 |
| China | 2060 |
| India | 2070 |
Source: Energy & Climate Intelligence Unit
There are also differences between nations in terms of how formal their commitment to net-zero is. Each country’s commitment falls into one of the following four categories:
- In law – (e.g. UK, Canada and Colombia)
- In policy document – (e.g. Latvia, Uruguay and Namibia)
- Declaration/pledge – (e.g. Saudi Arabia, South Africa and Mexico)
- Proposed/in discussion – (e.g. Pakistan, Ecuador and Lebanon)
Additionally, there are some variations in the specifics of each country’s pledge, such as:
- Exemptions and/or different rules for certain emissions
For example, New Zealand’s net-zero pledge covers all GHGs except biogenic methane, which has its own separate reduction target. - Sector specific exclusions
For example, France, Portugal and Sweden exclude international aviation and shipping from their net-zero emissions pledges. - Use of international mitigation transfers
For example, Norway permits the use of international transfer of carbon credits, while France explicitly rules them out, and Sweden allows them but has imposed a limit for their use.
Why is the energy transition relevant to the maritime industry?
As with all forms of transportation, the shipping industry contributes to global greenhouse gas emissions. While shipping is the most carbon-efficient mode of transport, producing significantly less grams of CO₂ per tonne-km than air, road and rail travel, it is still responsible for around 2.3% of CO₂ of global emissions.
The shipping industry is predicted to grow in line with increasing international trade volumes. More shipping activity, of course, means more greenhouse gas emissions produced by the sector. The maritime industry therefore faces a pivotal dilemma: how do we reduce shipping’s carbon footprint while the sector continues to grow? As a result of these pressures, we have seen an increasing focus on ensuring more sustainable shipping operations that bring down carbon emissions and so lessen the environmental impact of the shipping industry as a whole.
While shipping was not included in 2015’s Paris Climate Agreement, the International Maritime Organization (IMO) and other regulatory bodies have introduced a variety of policies and targets to drive decarbonisation across the sector. One key piece of IMO regulation requires the shipping industry to reduce greenhouse gas emissions by at least 50% by 2050 (measured against 2008 levels). The energy transition is therefore highly relevant to the maritime industry as it is one of the ways in which the sector will meet these targets and play its part in helping to reduce climate change.
How can maritime businesses respond to the energy transition?
Fatih Birol, Executive Director, International Energy Agency (IEA), said: “The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense” – and this rings true for maritime businesses. Companies operating in global shipping should be taking proactive measures to prepare for the evolution of the maritime energy transition over the coming decades. They can do this through measures such as:
- Adopting alternative fuels
Companies should be looking at utilising zero-carbon fuels where possible, participating in green corridors, and exploring Carbon Capture and Storage (CCS) solutions for reducing emissions. - Investing in energy efficiency measures
Companies might consider adopting new digital tools to monitor and optimise the operational efficiency of their vessels. Alternatively, they might consider retrofitting vessels with energy-saving technology and/or systems to make them compatible with alternative fuels. - Preparing for regulatory frameworks
There are numerous measures in place to incentivise cleaner decision-making in shipping and drive lower emissions (e.g. the IMO’s goals for 2028, 2030, and 2040). Maritime businesses should make sure they stay informed about legislation changes and upcoming regulation (e.g. the implementation of the CII and EEXI requirements by 1st January 2026 and the IMO’s target deadline in 2030) to ensure they are compliant and playing their part in creating a greener future.
How can Clarksons support maritime businesses to navigate the energy transition?
Clarksons provides market-leading support to clients looking to navigate the green transition and energy transition effectively. Clarksons offers a range of services to help clients maximise commercial opportunities while still meeting environmental targets, including:
- Consultancy – developing and executing shipping decarbonisation strategies
- Finance – highly experienced teams to facilitate a wide range of green financing initiatives
- Carbon offsets – assessing and executing transactions to offset Scope 1, 2 & 3 emissions
- Insight and data – data, authoritative insight and intelligence related to the energy transition helps clients make better-informed decisions
- Fleet evolution – advising, executing and financing fleet renewal strategies with market-leading Sale & Purchase teams
- Technology – proprietary technology and digital tools to provide solutions that harness data and promote better, cleaner decision making
- Data-driven chartering brokers – informing cargo owners on how to ship cargos effectively
