Shipping decarbonisation: feedback from industry

On this page:

• Roundtable 1 - Alternative fuels and energy - 24 February 2025
• Roundtable 2 - Transitional arrangements to reduce maritime emissions - 26 June 2025
• Roundtable 3 - Alternative fuels and emerging technology - TBC November 2025
• Have your say on maritime decarbonisation

Introduction and context

Participants acknowledged the maritime sector faces significant challenges in adopting alternative fuels and technologies to meet decarbonisation goals. 

Key considerations discussed included:

• the role the Australian Government, and AMSA, have in enabling decarbonisation
• the importance of collaboration between all stakeholders involved in the decarbonisation transition
• various alternative fuels and their potential, opportunities, challenges, scalability, and future prospects. 

Key considerations

Australian Government’s role in enabling decarbonisation

Discussions highlighted industry interest in clear pathways and policy to support the maritime sector’s transition to alternative fuels and energy sources. Comparisons were drawn from other transport sectors that have decarbonised, such as buses, and the role of government in supporting the transition. The importance of clear guidance, policy certainty, and strategic investment to ensure the maritime sector progresses on decarbonisation targets was highlighted.

Participants raised that AMSA is regarded as the ‘gold standard’ for vessel safety and standards in the Asia-Pacific region and has a significant role in maintaining this standard and providing regional support as the sector transitions. 

Participants expressed interest in AMSA playing a proactive role in enabling and supporting the safe introduction of new fuels and technologies as part of the maritime sectors’ transition to decarbonisation. 

There was discussion on the importance of ensuring flexibility in the approach to alternative fuels, acknowledging the need to avoid committing too early to a single source that may not prove to be viable in the long term.

Collaboration to support decarbonisation

The discussion highlighted the importance of a coordinated approach to decarbonisation, with industry, government, and regulatory bodies working together to create clear and consistent policies.

Participants raised the importance of aligning industry initiatives with broader national and international decarbonisation strategies and objectives.

Participants raised that the global maritime transition requires cooperation and collaboration across the whole supply-chain and sector-wide roadmaps will be critical to achieving long-term decarbonisation goals.

Participants saw maritime decarbonisation as an opportunity for Australia to position itself as a leader in decarbonisation technology, training and response.

Alternative fuels and energy sources

Biofuels

Participants raised the following views on biofuels:

• Maritime use: Biofuels were discussed as a potential transitional fuel. Trials of biofuels, particularly in Australia, are ongoing. The biofuel market faces challenges in Australia due to small-scale infrastructure and logistical issues e.g. trucking timeframes and limitations. Despite being more expensive than traditional fuel, biofuels are a proven, lower-risk option compared to more novel fuels like ammonia and methanol.
• Challenges: Participants noted challenges with large-scale adoption, including limitations in small-scale infrastructure, bunkering capabilities, supply issues and issues with large-scale sourcing of products (feedstock) to develop biofuels.
• Opportunities: The adoption of biofuels requires collaboration across the industry. Lessons from international markets, such as Singapore’s incentivisation of large-scale biofuel production, were referenced. It was noted that the regulatory frameworks must evolve to keep pace with innovation. The recent amendments agreed by the IMO to reduce barriers to carrying and supplying fuels with a higher biofuel blend content was seen by participants as a positive outcome.

Methanol

Participants raised the following views on methanol:

• Maritime use: Methanol was seen by participants as a viable alternative fuel, particularly due to its lower toxicity relative to other alternative fuels. The potential of bio-methanol derived from food waste was discussed. While methanol remains of interest, it is not currently being prioritised over other fuel options by many participants.
• Challenges: Discussions highlighted the need for further investment in production and infrastructure to improve cost-effectiveness and accessibility.
• Opportunities: There was recognition of Australia’s potential to be a leader in methanol adoption, provided that the right infrastructure and market conditions are in place.

Ammonia

Participants raised the following views on ammonia:

• Maritime use: Ammonia was identified as a potential long-term fuel option due to its scalability and cost-effectiveness.
• Challenges: Despite its advantages, concerns were raised about NOx emissions and the need for appropriate technology, training and standards to mitigate these impacts. It was also raised that ammonia requires significant efforts to address safety concerns. Training, certification, and risk assessments are crucial for the safe adoption of ammonia in shipping.
• Opportunities: The discussion emphasised AMSA’s role in facilitating trials, supporting risk assessments and developing an environment that enables informed decision-making on ammonia and other alternative fuels.

Hydrogen

Participants raised the following views on hydrogen:

• Maritime use: Hydrogen was acknowledged as a promising and high potential green fuel. Some companies are exploring hydrogen in dual-fuel systems.
• Challenges: Discussions highlighted significant challenges regarding, economic viability due to high production and storage costs, transport, and infrastructure development. It was suggested that limited demand within the maritime sector is another challenge to large-scale adoption.
• Opportunities: There was recognition of Australia’s potential in the supply of hydrogen, provided that the right infrastructure and market conditions are in place.

Electrification and shore power

Participants raised the following views on electrification and shore power:

• Electrification: Electrification was discussed as a solution primarily suited for vessels undertaking short-haul voyages due to energy storage limitations on longer voyages. It was noted that some countries have already implemented battery-electric vessels with promising results.  
• Shore power: The adoption of shore power, where ships are plugged into electricity while at berth to reduce emissions, was seen by participants as a promising solution for port-based emissions reduction. It was noted that Sydney and Adelaide are considering shore power adoption.
• Challenges: Lack of consistent infrastructure across ports is seen as a significant barrier to scaling this solution globally. The high implementation costs and the need for sufficient renewable electricity supply was also raised by participants.

Onboard carbon capture

Participants raised the following views on onboard carbon capture:

• Maritime use: Onboard carbon capture was discussed as a potential mechanism for offsetting emissions, particularly where alternative fuels may not provide a fully zero-carbon solution. It was raised that consideration is still being given to the productive use of captured CO2.
• Challenges: Participants raised that there are high costs associated with capturing and storing CO2 onboard, and there is a lack of a market for selling captured CO2. Therefore, waste reception at ports and terminals is needed to support this option.

Introduction and context

The discussion focused on the practical measures and strategies that can be adopted now to support the shift from fossil fuels to zero and near-zero emission options, including biofuels, electrification, shore power, digitalisation, energy efficiency and training.

The discussion provided a platform to identify challenges, share insights, and explore what regulatory, technical, and workforce actions can support a successful transition.

Key considerations

Government support for maritime decarbonisation

Participants reflected on how government is supporting maritime decarbonisation and identified additional opportunities for government to enable innovation to support the adoption of alternative fuels and technology. During discussions, the following points were raised:

• The work on decarbonisation of international shipping and fuel safety, which is progressing at the International Maritime Organization, is critical to ensure the maritime sector can decarbonise, and Australia's engagement in this work is essential.
• The facilitation of cross-sector engagement and collaboration on key decarbonisation topics, such as fuel specifications and regulatory requirements, supports information consistency and accuracy amongst Australian stakeholders, which is vital for a successful maritime decarbonisation transition.
• Clear and consistent policy and regulation from government supports maritime ‘s transition by setting decarbonisation targets and providing investment certainty for industry.
• Policy, regulations and incentives that support early adopters of new fuels and technology can drive maritime decarbonisation by making new fuels and technology more accessible for all.
• Market mechanisms, such as a price on carbon emissions, and subsidies to support innovation, can make alternative fuels and technologies cost-competitive with traditional fuels, which will support the uptake of zero and near-zero-emission fuels and technologies.

Biofuels

Participants discussed their experience with biofuels, renewable diesel, FAME, and HVO, and the role of these fuels in reducing ship emissions.

The Group recognised that biofuel is viewed as a viable current fuel option and an effective emission reduction pathway. With compatible engines and fuel already available, it is seen not just as a future transitional solution, but one that can be adopted now.

Some participants identified challenges related to the uptake of these fuels, such as:

• Conflicting messaging around the availability and scale of supply can result in challenges in determining which biofuels are in demand and should be supplied at Australian ports and terminals. It was suggested that greater certainty on supply locations and sector-wide demand would improve access and provide greater certainty on biofuel availability.
• Commercial and logistical challenges, including access and availability of blending facilities and determination of appropriate bunkering infrastructure.

Shore power and electrification

Participants shared their experiences with shore power and ship electrification, and raised the following:

• Shore power and electrification are seen as effective emission-reduction tools which is particularly well suited to certain ship types and operations, such as short-haul operations, cruise ships, Ro-Ro Pax, tugs, and ferries.
• Hybrid engine technology was discussed providing practicality and flexibility in adopting shore power and electrification within the maritime sector.
• Some participants identified challenges related to the uptake of shore power and electrification, such as:
  • Shore power infrastructure is not yet widely available. It was suggested that mandating the provision of shore power at ports, such as what is happening in EU and California, would ensure the availability of infrastructure.
  • Return on investment for the installation of shore power infrastructure can be lengthy. Establishing greater certainty on ship demand would help drive and justify investment, and it was suggested coordination through collective expressions of interest would help identify demand at specific ports.
  • Grid capacity limitations and energy demand to recharge vessels can impact surrounding community energy demands.
  • Coupling shore power with additional green solutions, such as wind or solar energy, is often not feasible due to the immense scale of turbines and panels required, especially in often space-constrained ports and terminals.
• To ensure that shore-power is contributing to decarbonisation of the sector, it was proposed that a certification scheme could help verify emission credits from shore power, but there was uncertainty how this would work under the IMO’s Net-Zero Framework.

Energy efficiency

Participants shared their views and experience with energy efficiency measures, including but not limited to Just-in-Time Arrival (JITA) systems, hull coatings and cleaning, slow steaming and improving propeller design. The following was raised:

• Improving energy efficiency is a foundational step to decarbonise ships and remains an ongoing priority even after the adoption of alternative fuels and technology as a way to reduce fuels costs.
• While many energy efficiency measures have already been adopted, they have not yet been fully leveraged across the sector, so there remains significant potential for further energy efficiency improvements.
• Key challenges raised regarding investment in energy efficiency include:
  • Many energy efficiency improvements require collaboration across the sector, and therefore require sector buy-in.
  • Short-term shipping contracts can discourage innovation and long-term investment in energy efficiency measures.
  • Difficulty measuring the effectiveness of energy efficiency improvements and quantifying the return on investment, which may deter uptake and funding.
  • High upfront costs being seen as a significant barrier.
• It was noted that efficiency improvements needed to be considered as a 'package' rather than individualised actions to optimise efficiencies achieved.
• Applying a holistic approach using marginal abatement cost analysis can help prioritise energy efficiency measures by evaluating their cost-effectiveness across the sector.

Digitalisation

Participants shared their views and experience with digitalisation options to support emission reductions, such as Just-in-Time Arrival (JITA) systems and route optimisation. The following was raised:

• Just-in-Time Arrival Systems (JITA) and route optimisation were recognised as effective measures for improving energy efficiency. However, several challenges were identified with their adoption, including:
  • JITA can be undermined by late scheduling decisions, which limits the potential to adjust arrival times and realise energy efficiency benefits meaningfully.
  • 'First come, first served' mentality within the sector needed to shift to enable more flexible and efficient scheduling practices required for JITA.
  • There is an absence of a natural party willing to fund the installation of a JITA system, which can stall progress and adoption.
  • Any limitations to information sharing and cooperation in the port can hinder the effective implementation of JITA and other optimisation measures.
  • There are multiple, non-integrated systems in use to support route optimisation, however optimisation is most beneficial where there is a single system across the board, or where existing systems are interoperable.
  • Route optimisation tools would benefit from incorporating additional data beyond AIS, such as real-time weather and sea state conditions, to improve accuracy and decision-making.

Training and skills

Participants discussed upskilling across the maritime workforce to support the transition. The following points were raised:

• More comprehensive education is needed across the board on all aspects of the transition alternative fuels, safety, and regulatory expectations and therefore accessible sector-wide education on these elements would be beneficial
• There would also be benefit in providing general awareness raising information for those across the maritime sector to support engagement with the transition.
• Well-defined training and certification requirements are valuable. While the STCW framework supports international training, there is a need to clarify the requirements for domestic shipping.
• Training requirements can be subjective and depend on the target audience, such as seafarers, port personnel, emergency responders or fuel suppliers.
• Increased engagement with Jobs and Skills Councils was recommended to develop cross-sectoral training aligned with industry needs.

Have your say

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