The global shipping and logistics industry is under increasing pressure to reduce its environmental footprint. This article looks at how innovation, regulation, and industry collaboration will be key to driving progress toward net-zero emissions.
The Need for Sustainability in Supply Chains
Container shipping is the most carbon-efficient way to transport goods globally, yet it still has a substantial environmental impact. With the industry accounting for around 3% of global greenhouse gas emissions, reducing vessel emissions is critical to meeting global climate targets. In response, the International Maritime Organization (IMO) has set ambitious targets to achieve net-zero emissions by or around 2050, with interim goals of a 20-30% reduction by 2030 and 70-80% by 2040, compared to 2008 levels.
Industry Efforts to Reduce Supply Chain Emissions
Achieving net-zero emissions in global supply chains requires a combination of innovative technologies, alternative fuels, and operational efficiencies:
Alternative Fuels in Shipping
The maritime industry is increasingly exploring alternative fuels such as green methanol, hydrogen, and ammonia as part of broader efforts to decarbonise operations. Many shipping lines, including Maersk, CMA CGM, and Hapag-Lloyd, are investing in dual-fuel vessels and partnerships to accelerate the transition.
Maersk, for example, launched the world’s first large container vessel powered by green methanol, the Ane Maersk, which completed its maiden voyage in 2024. It is the first of 18 dual-fuel vessels Maersk plans to deploy by 2025, capable of running on both methanol and conventional fuels to provide operational flexibility during the transition. Similarly, CMA CGM has ordered methanol-powered ships as part of its commitment to carbon neutrality by 2050, while Hapag-Lloyd is investing in LNG-powered vessels with the potential for future alternative fuel conversions.
Beyond individual shipping lines, the industry as a whole is working to scale fuel availability and infrastructure. Partnerships between carriers, fuel producers, and port authorities are critical to ensuring a viable and scalable pathway for alternative energy adoption.
Decarbonising Port Operations
Ports play a crucial role in sustainable supply chains. In the UK, the Port of Felixstowe has embarked on a comprehensive decarbonisation strategy, including the acquisition of 17 electric gantry cranes and 48 battery-powered terminal tractors, to reduce annual CO₂ emissions. Additionally, the port is exploring hydrogen as a sustainable energy source, collaborating with partners to develop on-site hydrogen production facilities.
These initiatives align with broader European efforts, such as Germany’s National Action Plan for Climate-Friendly Shipping, which focuses on alternative fuels, electrifying port equipment, and enhancing energy efficiency. The Port of Hamburg, for instance, has committed to reducing carbon emissions by 50% by 2025 and achieving full climate neutrality by 2040. A key component of this shift includes the installation of shore power facilities, allowing ships to draw electricity from the grid while docked, thereby reducing emissions from idle vessels. European ports are investing heavily in shore power infrastructure, making this a critical step in the effort to create greener ports.
Sustainable Trucking Solutions
Road transport remains a significant contributor to supply chain emissions. Companies like Maersk are investing in electric trucks to decarbonise their logistics operations and achieve net-zero emissions by 2040. However, the adoption of hybrid and electric trucks faces challenges due to range limitations and the need for a broader charging infrastructure, particularly for long-haul freight.
Economic and Regulatory Pressures
Transitioning to sustainable practices presents significant economic and regulatory challenges for the shipping and logistics industry. Companies must balance the high costs of adopting green technologies with maintaining operational efficiency, while also navigating an increasingly complex regulatory landscape.
Financial Implications
Investing in green technologies and infrastructure inevitably increases operational expenses. To help offset these costs, various port charges have been introduced, such as the Green Energy Transfer Levy (GET), Energy Adjustment Levy (EAL), and Emissions Trading System (ETS). These charges reflect the costs of transitioning to greener practices, from alternative fuel investments to emissions reductions. While they may raise short-term costs, they are crucial for ensuring long-term sustainability. These levies are designed to encourage investment in lower-emission technologies while holding operators accountable for their environmental impact.
Regulatory Compliance
The IMO’s decarbonisation strategy includes progressively stricter emissions regulations to drive industry-wide change. A key milestone in this transition was the introduction of mandatory emissions data reporting in 2023. In 2024, this data was used to assign performance ratings based on the Energy Efficiency Existing Ship Index (EEXI) and the Carbon Intensity Indicator (CII). Ships with poor CII ratings will be required to improve efficiency or risk being idled, reinforcing the push to reduce carbon intensity across the industry.
However, compliance is becoming increasingly complex due to overlapping international and regional regulations. The EU Emissions Trading System (EU ETS) and FuelEU Maritime Regulations, for example, introduce additional financial and operational requirements. From January 2025, the FuelEU Maritime regulation will mandate a 2% reduction in carbon intensity per ship, compelling operators to accelerate efficiency improvements. Without global alignment, these fragmented regulations risk creating costly regional silos, making compliance more challenging and potentially slowing investment in zero-carbon fuels and infrastructure.
Barriers and Incentives for Green Shipping
Despite growing commitments to alternative fuels, the transition remains slow due to significant cost barriers and infrastructure challenges. Developing supply chains for green fuels like hydrogen, ammonia, and methanol requires substantial investment in production, storage, and bunkering facilities. At present, liquefied natural gas (LNG) and conventional fuels continue to dominate, as many shipping lines prioritise them for short-term fleet expansion due to their availability and lower costs. Additionally, uncertainty around future regulations and the scalability of emerging technologies has made some companies hesitant to commit fully to alternative fuels.
However, regulatory pressure and market incentives are expected to accelerate change. Stricter emissions targets, carbon pricing mechanisms, and potential penalties for non-compliance are pushing the industry toward greener solutions. At the same time, early adopters of sustainable shipping stand to benefit from enhanced brand reputation, stronger customer relationships, and access to green financing. As technology progresses and costs decline, investment in low-carbon solutions will become increasingly viable, reshaping the industry for the future.
The Path Ahead
Achieving a sustainable global supply chain requires collaboration between governments and industries, driven by growing consumer demand for greener practices. Consumers are increasingly making purchasing decisions based on sustainability, influencing businesses to prioritise emissions reduction, alternative fuels, and energy efficiency. Organisations that act now will not only contribute to global decarbonisation but also strengthen their market position and ensure long-term compliance with evolving regulations. Proactive investment in sustainability today will help pave the way for a resilient and environmentally responsible supply chain in the future.
In conclusion, the journey toward net-zero emissions in global supply chains is complex and multifaceted. By embracing innovation, adapting to evolving regulations, and working together, the industry can overcome the challenges ahead and make a meaningful impact on global sustainability efforts.
Sources:
International Maritime Organization (IMO) Net-Zero Emissions Targets
Maersk’s Green Methanol-Powered Vessel, Ane Maersk
Port of Felixstowe’s Decarbonisation Initiatives
Port of Hamburg’s Climate Goals
Barriers and Incentives for Green Shipping
Image, AI generated.
