Shipowners cite uncertainty as key barrier to energy transition, survey finds

The survey, which included senior executives from shipowning companies across various sectors, highlights the “uncertainty dilemma”—where decarbonisation choices remain unclear, but regulatory pressure necessitates action.

The survey respondents acknowledged the difficulty of navigating the transition amid tightening environmental regulations. While many shipowners expressed a need for flexibility to adjust strategies as conditions evolve, the absence of clarity from some governments and transport departments was cited as a significant hindrance.

One passenger shipowner questioned the lack of guidance on domestic shipping regulations, saying: “What’s the definition of domestic shipping going to be? What are the exclusions, inclusions, and will there be a phased-in approach like the EU? Right now, there are no answers to any of it.”

Shipowners also pointed to the geopolitical climate, particularly the outcome of the 2024 US presidential election, as a factor influencing sustainability strategies.

Despite uncertainties at the governmental level, interviewees acknowledged that regulatory frameworks have become more defined since Houlder’s previous survey two years ago. Notably, the EU Emissions Trading System (ETS) has begun to shape business practices. Smaller owners anticipate its growing impact, while larger owners consider it “priced in” but value it as a benchmark for carbon pricing in operational and financial planning.

In contrast, the FuelEU Maritime regulation is seen as a more immediate concern due to its stringent penalties—up to €2,400 per tonne of very low sulfur fuel oil (VLSFO) energy equivalent for non-compliance.

“ETS is not a particularly big deal compared to FuelEU,” said one respondent. “What FuelEU has done is shock businesses into realising the penalties they face if they don’t act on energy efficiency and eventually adopt future fuels.”

Houlder’s CEO, Rupert Hare, emphasised the need for the industry to embrace action despite uncertainties.

“We can’t let uncertainty become an alibi for inaction on decarbonisation,” Hare said. “With incoming regulations like FuelEU Maritime, shipowners must simulate scenarios based on available data to make informed decisions now. Surrounded by fog, you’d slow to a crawl without aids to navigation.”

Jonathan Strachan, Houlder’s chief technical officer, echoed this sentiment, urging shipowners to start the journey with agility and adaptability.

“100% certainty is neither possible nor necessary. Those who wait for a perfect route will be left behind. The leaders are already moving, staying informed, and preparing to adjust as needed,” he said.

The survey also explored barriers to the scaling of green fuels and the performance of clean technologies. Shipowners noted uncertainty as a persistent theme in these discussions. However, many reported progress in securing internal support and budgets for research and development, spurred in part by the financial implications of new regulations.

By re-engaging with shipowners two years after the initial survey, Houlder identified a growing willingness to act amid uncertainty, highlighting a shift in mindset across the container, tanker, bulk, cruise, and ferry sectors.