In the wake of the International Maritime Organization’s vote to price carbon in shipping fuels, I had the opportunity to sit down with an insider and expert on maritime decarbonization, Tristan Smith. He’s the director of a maritime advisory services consultancy, UMAS, and professor at University College London. This is a lightly edited transcript of the second half of our conversation. This first half is here.
Michael Barnard [MB]: Welcome back to Redefining Energy–Tech. This episode is powered by TFIE Strategy, guiding investors toward climate-smart bets that will win in the real world and in the market. I’m your host, Michael Barnard, and returning for the second half of our conversation is Tristan Smith, director of UMAS, a maritime advisory services consultancy. He’s also a professor with the University College London Energy Institute and a maritime decarbonization expert. That’s what this nerdcast is all about, triggered by some excellent movement by the International Maritime Organization.
Part of the dynamic I’m seeing in this industry is that everyone is still confused about what the answer is. I’ve got my opinion, and some people share that opinion. You have a different perspective, based upon your published work. LNG was a dominant narrative, and now the bloom is off that rose. Methanol was a dominant narrative, and the bloom’s off that rose as well. Hydrogen was another narrative, and now the bloom is off that rose because hydrogen isn’t going to be cheap—and synthetic fuels made from hydrogen won’t be cheap either. Meanwhile, the nuclear industry is rearing its head again, claiming they’ve got a solution.
I recently read a survey—maybe it was from the IMO—where a large group of shipping industry participants were polled, and the responses were all over the map. It was, “Maybe this, maybe that—I don’t know.” Consensus just isn’t present yet because there have been so many abortive attempts. It’s fascinating to watch.
Tristan Smith [TS]: There have been abortive attempts, so trust has been lost that anyone can be authoritative on the subject. But also, I think a lot of people understand that what becomes dominant will depend partly on what the sector chooses now. There’s an element where the sector can shape its own pathway from here. If we challenge one of those statements you made and only build methanol dual-fuel ships, then nobody is going to build out ammonia or other fuel production bases. Everyone will assume there’s guaranteed offtake because those ships will need methanol once regulations exceed the greenhouse gas intensity limits already set. The market will respond directly to the specification of the ships.
So what happens next in the fleet will influence what we build as production capacity, creating interacting cycles—production capacity responding or moving in another direction because someone starts betting on a different fuel pathway, which gradually gains traction. Many people seem resigned to waiting and seeing how the fleet evolves and how the energy production side evolves. There’s a common narrative: “We’d love to decarbonize, but we just can’t see the fuels being available, and without knowing which fuels will be available, we can’t decide what molecule we should build our ships around.”
Therefore, some adopt a “bury our heads in the sand” approach, hoping biodiesel will be abundant enough to solve the problem. That’s an easy stance to take given the absence of evidence in fuel infrastructure development. Our research group is trying to monitor those trends closely, both on the supply side—the fuel provision—and by tracking investments and production maturity across fuel options. We’re also looking at the vessels being ordered. Certainly, until the recent IMO outcome, the dominant choice was LNG, representing over 50% of dual-fuel vessels.
So while we can have a theoretical discussion concluding LNG clearly isn’t the answer, that’s not what’s actually happening in the sector. We must factor that reality into our analysis. We make sure our models aren’t naïve and instead recognize the realpolitik influencing behavior and decisions constrained by what’s available or by observing what competitors are doing.
[MB]: There is no dominant answer yet. Maersk is trying to create one by purchasing all its dual-fuel ships with methanol, but it’s going to be interesting to see how that evolves.
We have about half an hour left, and I’d like to return to the recent IMO decision, because it’s intriguing. Let’s start with: What year is it baselined on?
[TS]: It’s baselined on 2008, which I can explain based on the fact that 2008 is the first year for which there was a consistent inventory from the third IMO greenhouse gas study. The organization has conducted four greenhouse gas studies so far, and the third study, published in 2014, examined the period from 2008 to 2012. Thus, the earliest date with reliable inventory data from the third IMO study is 2008. Previous studies went further back but employed substantially different methods, making it difficult to reliably connect earlier emissions estimates to later studies—for example, going back to 1990 or another baseline year.
So, 2008 is considered by the IMO to be the first year with a trustworthy estimate of actual international shipping emissions.
[MB]: The date is interesting in part because I compare and contrast it with Europe, which uses 1990 as its baseline for all greenhouse gas targets. The European baseline is convenient because it’s around the time the IPCC was formed and the first COP was held. The timing is meaningful, and it’s actually a baseline from before a massive amount of the growth in trade, GDP, and shipping we’ve seen over recent decades. But if you don’t have good data for the shipping industry from back then, I can understand why you’d pick a different year.
I also compare and contrast with the United States, which prefers 2007 as its baseline for electricity generation emissions. The U.S. story looks good from 2007 till now, but terrible from 1990 to 2007.
One thing I note, despite the practical reasons for choosing 2008 as the IMO baseline, is that it was prior to the economic crash, prior to widespread slow steaming, back when fuel oil was cheap and container ships were essentially sprinting across the Pacific. From your perspective, do you see the 2008 baseline as unfortunately high compared to the slower steaming practices and greater route efficiencies we observe today? I’m trying to determine if the average ship on an average journey today is already compliant relative to the 2008 baseline.
[TS]: So, compliant with what exactly? Compliant with the IMO’s revised strategy and trajectory, or compliant with something else?
[MB]: Let me paraphrase my question to make it clearer. If we take a typical 20,000 TEU container ship sailing from Shanghai to Los Angeles in 2008 and compare it to the same journey today, would the ship today already have significantly lower greenhouse gas emissions simply due to operational changes like slow steaming?
[TS]: It’s an interesting point that those ships didn’t actually exist in 2008. The largest container ships back then were probably around 9,000 TEU, and it’s extraordinary how they’ve grown in scale since. That’s a fascinating part of the puzzle. But broadly speaking, yes, the absolute emissions from individual vessels have come down significantly since 2008.
As you say, 2008 was indeed a high point—ships were moving fast, fuel was cheap, and energy efficiency in vessel design was relatively low. Those inefficiencies started to be corrected by market forces following the financial crisis, which led to a significant reduction in absolute emissions from around 2008 to about 2012 or 2013. During this period, fuel consumption dropped by as much as 40% or 50% on some vessels, largely due to substantial reductions in speed and correcting poor design choices from the early 2000s.
So yes, 2008 is a flattering baseline year. However, the basic logic the IMO used to set its 2030 and 2040 objectives helps correct for that because it takes a cumulative emissions approach. This aligns shipping’s climate response with the IPCC’s general recommendation: approximately halving emissions by 2030, and reaching net-zero by 2050. That’s from the IPCC AR5—I believe it’s AR5. I’m not always great at recalling these fine details, but around 2019 or 2020, the IPCC clearly stated that to avoid dangerous climate change, these targets were essential.
Translating cumulative emissions into IMO targets gave us the absolute reductions in the revised strategy. While we argued for slightly higher ambitions—around a 36% absolute reduction by 2030 and about a 90% reduction by 2040—the agreed-upon strategy targets of 30% by 2030 and 80% by 2040 are actually fairly close to those IPCC recommendations. That’s politics in action, but the point remains that the final numbers don’t appear to continue any trend of apologizing for past emissions.
2008 was essentially a line in the sand, and the process since then has been scientifically informed in reaching the current targets.
[MB]: Good, because I didn’t have the detail on that. Sometimes these baseline choices can seem arbitrary, picking an easy target to hit—but clearly, that’s not what’s happening here, unlike the United States and its 2007 baseline. The U.S. might have its own rationale similar to what you’ve described, but let’s get back to specifics.
I previously mentioned a large, modern container ship traveling from China to the United States. Do you have a concrete example of a route where you could illustrate the financial implications and likely costs associated with exceeding the IMO limits?
[TS]: I should have done my preparation. I don’t—I can’t do the numbers off the top of my head. The way we’ve been approaching it is in terms of relative competitiveness between fuel options, including simply continuing to use oil and paying the non-compliance fee. Initially, those costs are relatively low. But over the course of the 2030s, they rise substantially. By the 2040s, you’re looking at significant premiums just to stay operational while remaining out of compliance. Broadly speaking, fuel costs could quadruple if you just keep paying the fines.
[MB]: And that is significant. There’s an interesting thing here—I just want to nerd out a bit about the growth of container ships. I read The Box twice because it’s just so fascinating. Have you ever read The Box? Pretty much everybody in the industry has, but people outside the industry often say, “What’s that—a book about boxes?”
The move from ships of around 9,000 TEU to today’s 24,000 TEU vessels is interesting simply because greenhouse gas emissions per ton of freight delivered have decreased substantially. Scaling up these ships, lengthening their hulls, and improving efficiency as the hull moves through the water have collectively reduced emissions per container significantly. It would really be a good-news story if we hadn’t built so many ships to keep up with skyrocketing global shipping demand.
[TS]: I’d also argue that you need to be very careful about assumptions regarding how full these ships actually are. While economies of scale certainly work from a physics perspective, logistics often mean you can carry fewer containers and still make a profit. With smaller vessels, you need to be full all the time. But when companies started building these extremely large container ships, they found they could afford not to have them completely full, so their overall utilization dropped.
When you factor in the actual lower number of containers carried, the theoretical CO₂ savings these ships should have delivered—if they’d been full—didn’t necessarily materialize. We analyzed this using IMO data in the late 2010s, and it seemed clear at that time that the claims of significant CO₂ savings from giant container ships were overstated due to their lower operational utilization.
This underutilization partly arises from the competitive strategies of major shipping lines, which use large tonnage to establish monopoly-like dominance on key routes. They’re incentivized to push competitors off routes, sometimes colluding through shipping conferences to provide high-quality services on mainline routes like China-to-Europe. These huge ships allow companies to market significantly lower prices for freight, driving competitors out of business.
That’s why the shipping sector has experienced such dramatic consolidation. If you compare today with the early days described in The Box, you’ll see we’ve moved from a large number of shipping companies in the ’80s and ’90s to the small handful dominating global liner trade today.
The industry dynamics are complex, and economies of scale aren’t always beneficial from a CO₂ perspective. Another good example is bulk ore carriers. Historically, some ships specialized in carrying oil one way and iron ore on the return leg, creating a logistical efficiency. Instead of running empty half the time, these ships could operate triangular routes, significantly reducing empty miles. However, such vessels were gradually driven out by competitors offering lower freight costs through simpler back-and-forth operations. Those simpler operations enjoyed logistical advantages but actually generated higher overall CO₂ emissions than ships maximizing cargo utilization.
So, bigger isn’t always better from an emissions standpoint.
[MB]: Interesting—that’s a great nuance for me to mull over. The example numbers I put together, based on what I could understand of the regulation as someone who didn’t help develop it, indicated that additional costs might be a couple million dollars per journey. That seemed significant to me, but I’m not sure I got those numbers exactly right. I was hoping you’d have more precise figures.
However, your guideline—about four times the fuel cost—is an excellent rule of thumb. It’s substantial enough that we’re not talking about a 20% increase, but something like 300% or 400% higher.
So 43% in 2035. Is there a 2030 figure?
[TS]: There is—and I think it’s on the order of 8 or 9%. Sorry, I don’t have the exact number in front of me. It depends whether we’re talking about the base GHG intensity reduction trajectory, which is lower, or the direct compliance trajectory, which is higher. So it’s around 8% in 2030 for the base trajectory reduction, but then it goes up by another 13% to reach direct compliance. So, that’s nearly 21% in total.
[MB]: Those are interesting numbers because ship hulls typically last 25 to 30 years. There are exceptions, like the “ghost tankers” currently transporting Russian oil, and some older vessels that eventually get scrapped and recycled, but generally speaking, most ships remain operational for about three decades. That means most ships sailing five years from now are already on the water today.
This raises a key question: How will these existing ships achieve efficiency gains of 8 to 21% compared to the 2008 baseline, given they’re already built and operational?
We’re back to the balancing act around 2008 as a baseline. Back then, ships were steaming faster and designs were less efficient, so there are already savings embedded just by operational changes like slow steaming. But if ships today aren’t already meeting the upcoming regulations, how exactly will they achieve compliance in the relatively short span of five years?
[TS]: On energy efficiency, you don’t actually get credit from operational changes like speed reduction. Changing your speed doesn’t count towards the GFI, because the regulation specifically targets the greenhouse gas intensity of the fuel you have onboard. In other words, what’s regulated isn’t overall greenhouse gas emissions per unit of transport supply—which would include operational efficiencies—but purely the carbon intensity of the energy itself.
That means your compliance options are limited to measures related directly to onboard energy sources. Although guidelines aren’t fully finalized yet, wind assistance would likely count. So if you installed sails on your existing five-year-old ship, you’d receive some credit toward compliance. Similarly, energy you use when docked in port—connecting your vessel to shore-based electricity—would also count.
However, this varies considerably by vessel type. Many ships won’t significantly lower emissions through shore power because they’re only alongside for short periods, limiting electricity substitution to small single-digit percentages. Cruise ships might be exceptions since they spend more time docked and could displace more of their onboard energy demand with electrification.
But for most ships, if wind assistance and shore power aren’t sufficient to meet the required 8% reduction—which is just the baseline compliance, with a $100 charge applied to emissions in the next band—they’ll have to consider biofuels. There are already significant examples of companies trialing biofuels and securing biofuel supplies specifically to achieve the required emission-intensity reductions.
[MB]: If you’re bunkering in Singapore or Rotterdam, you can buy B30 right now. I’m not sure how many other ports currently offer biofuel blends—those two immediately spring to mind, but that might just reflect my availability bias.
[TS]: Those are also the ports that publish data on this. Most references indeed point to Singapore and Rotterdam because they sell some of the largest volumes, making information readily accessible. But biofuel availability is broader—there are multiple ports providing these fuels today.
However, it’s worth remembering we’re still pre-regulation. Ships won’t need these fuels to comply until 2025, though some operators are already adopting them to align with existing EU regulations. The EU already has its own standards, so we’re seeing early adoption there.
Globally, I would expect the IMO decision to accelerate the evolution of supply chains for B30 and similar biofuel blends, much like we saw previously with low-sulfur fuels. Biofuels represent the obvious “drop-in” compliance solution for existing vessels. As long as prices stay competitive—without demand outstripping supply and pushing prices higher or other sectors driving up costs—biofuels will be the simplest solution for existing ships that need to meet the upcoming IMO regulations.
[MB]: That’s interesting, because the market demand dynamics will certainly shift significantly. Right now, we produce around 70 million tons of biodiesel annually, mostly wasted in ground transportation. And ground transportation is electrifying rapidly—India reached about 97% heavy rail electrification by the end of last year; China is around 75–80%. Europe’s passenger rail network is already 65–70% electrified and continues to electrify, supplemented by battery-electric solutions for bridging gaps.
So, as ground transport electrifies, that existing biodiesel demand will diminish. This raises the question of whether that 70 million tons will transition towards sustainable aviation fuels or be consumed largely by shipping. It sets up an interesting market shakeout as organizations place their bets.
But there’s another intriguing question here. Suppose that many ship operators simply can’t achieve full compliance. From what you’re telling me, operators will likely opt to pay the initial $100-per-ton fine rather than the higher $380 fine. They’ll choose to blend fuels and pay penalties on emissions above the base compliance level. Given this, what do your models project as the total annual revenue from these fines, and how will that revenue ultimately be used?
[TS]: So in the parameters that we have for the first three years, we think assuming the behaviors of some biofuel use and some methane use and some methanol use, given the existing fleet, that will generate on the order of 11 to 12 billion US dollars per annum. So a total pot of the order of 33 to 36 billion by the end of that first three-year phase. And that first three-year phase is the first period for which we actually have the parameters very clearly set. What the parameters will be in 2031 is still uncertain because there are various review clauses that will kick in and those values might change. So therefore the revenues might increase—or potentially not. And the use of the revenues is still to be finalized.
But there is some language that we can see and we can sense from the political dynamic from the negotiations in April, that there’s a strong desire for a large share of that to be used for subsidizing what the IMO calls ZNZS, or zero or near-zero emission fuels. And then there’s also revenue use for wider purposes, for which there’s quite vague language, but which many countries suggest should support energy infrastructure investments in countries, particularly low-income countries, and also assist countries with their various other energy transition needs, which will include skills retraining of seafarers, maybe some uses to improve logistics so that the effect of the cost increase due to using more expensive fuels is reduced as much as possible.
You know, these various other things that one could use the money for, which will now have to go through a political discussion to finalize. So it’s not clear exactly what the ratios are. There was some proposal during the meeting that it should be split where the majority of the money should go to those national projects, which would still leave on the order of 40%, so a good chunk of maybe 5 billion per annum, to energy subsidy for the ZNZ substitute fuel use. But others have proposed that the subsidy should be greater—maybe use 70%, so closer to 8 billion per annum going to fuel rewards for these ZNZ fuels. And I guess the final thing to say here is that we haven’t yet agreed the definition of ZNZ.
At the moment we have a threshold on the greenhouse gas intensity that sets the minimum requirement for a ZNZ, and that’s 19 grams of CO₂ per megajoule. That puts most of the first-generation biofuels out of the definition, but includes advanced biofuels, and also includes e-fuels, as long as they’re made in a way which minimizes upstream emissions—so using renewable electricity. It probably discounts a lot of the blue fuels that come from CCS and natural gas, steam methane reformation and CCS on land, but it’s not definitive. Maybe, maybe some of that. But that’s just the minimum. And we’ll now have another political discussion to say: do we want everything that is within the minimum to be rewarded, or only a subset? A subset that is genuinely scalable and therefore will be the one we will need in large volumes by the time we get to 2040.
[MB]: It’s going to be interesting to see how this plays out. One of the observations I’ve been making and wondering about since the late 2010s is why everyone assumes synthetic fuels will be remotely affordable for anyone.
I did the techno-economic analyses on direct air capture and synthetic fuels, looked into chemical processes, and compared them against alternative solutions. The numbers simply didn’t make sense. Every time I’ve assessed the cost of green hydrogen production—across four continents, covering 15 or 20 different projects myself—the economics never added up to a truly cheap option.
For instance, I conducted a study on European energy colonialism in North Africa, specifically Morocco, Algeria, and Egypt, where European policies were pushing to manufacture green hydrogen locally for export, rather than prioritizing domestic decarbonization. My conclusion, which I’ve published, was that hydrogen can indeed be green—but it can’t be cheap. By extension, synthetic fuels can’t be cheap either. The IEA’s recent fuel assessments echoed this, finding synthetic fuels costing about four to six times as much as conventional fossil fuels.
This makes synthetic fuels extremely difficult economically, which is why I lean toward biofuels—they’ll likely cost around two to three times more than traditional fuels, rather than four to six times.
Meanwhile, the global biofuels market itself is set for transformation as electrification takes away biofuel’s current primary markets. This could leave the right kinds of molecules available—but airlines will be competing for exactly the same molecules.
All of the conversations I’ve had around this issue ultimately boil down to economics.
[TS]: Absolutely. There’s nothing in shipping that adds any premium, which is exactly why we’ve been using heavy fuel oil—a waste product—because shipping always gravitates toward the lowest-cost fuel source available. We need to identify what the equivalent low-cost waste product might be in the global economy of the future. We’ve tried to do exactly that ourselves.
Our problem is that we struggle to see bioenergy being supplied at the volumes needed—not just by shipping, but also by the numerous other sectors competing for it. We’ve analyzed the cost of substitution across these sectors. Take aviation as an example: if airlines can’t sufficiently decarbonize with sustainable aviation fuel (SAF), they’ll need synthetic kerosene. Comparing the costs of synthetic kerosene versus synthetic ammonia indicates you’re more likely to see bio-derived SAF flowing into aviation, with E-fuels moving into shipping. This is because it’s much more efficient—per green electron—to produce synthetic ammonia for ships than synthetic kerosene for airplanes.
But that analysis still only focuses on shipping and aviation. In reality, sustainable biomass feedstocks—those which avoid unintended consequences like land-use changes—will be in demand from many sectors, even after accounting for the extensive electrification underway. This isn’t just our finding; others have reached similar conclusions.
This debate is precisely where the conversation sits right now. We need to revisit all assumptions about potential biomass consumers—whether that’s a growing global population, the plastics industry, or sectors not easily electrified—and then reassess how much residual biomass demand remains, and if that residual demand matches the sustainable bioenergy supply. We’ve done this before, but it should be revisited continuously. That reassessment will tell us clearly whether there’s enough sustainable bioenergy to avoid reliance on more expensive synthetic E-fuels, or whether E-fuels will inevitably have a significant role.
Based on current conditions, we think the incentives set by the IMO—using some of that projected $5 billion to $8 billion revenue—would be enough to make a viable business case for using E-ammonia in shipping this decade, even at today’s high hydrogen costs. That means, regardless of whether E-ammonia proves to be the optimal long-term solution, we’ll likely see at least some early adoption. Maybe not massive volumes initially, but certainly meaningful experimentation.
We already see ship owners ordering dual-fuel ammonia vessels because they’re convinced by these economics and skeptical about sufficient bioenergy availability in maritime markets. They’re willing to take the risk, experiment, and see how reality plays out—not just theoretical spreadsheet analyses from teams like ours. We need real-world data on costs, unexpected factors we’ve overlooked, or potential cost-reduction opportunities we’ve underestimated.
Over the next three to five years, we’ll gain valuable experience to help revisit and clarify these critical questions: What exactly will replace those 250 million tons of oil currently required each year to fuel the global shipping sector and serve global trade?
[MB]: Well, we disagree about that number because 55% of tonnage is in structural decline. So my projection for tonnage is lower than the adjusted tonnage that the IMO uses, which is fine. But it’s not like you’re using the maximal tonnage either. The Maersk Institute—when I talk to them, the Maersk McKinney Møller Institute for Maritime Shipping Decarbonization or whatever that collection of syllables is, it’s just too long a name—they reference 450 to 550 million tons. So there are all sorts of projected numbers, and there’s a big range. I’m at the bottom end of the range, just as I am with hydrogen.
But I’ll make two statements before we close. The first is that we throw away 2.5 billion tons of calories manufactured for human consumption every year. A full third of food is wasted. A lot of that waste happens at choke points or points of heavy processing, where it can be captured. Every ton of dried biomass turns into 0.4 tons of biofuels. So there’s a massive amount of biomass waste, currently turning into methane—a major greenhouse gas problem—that we are underutilizing. That waste stream is a large feedstock opportunity for biofuels, particularly for shipping and aviation, which still need them for long-haul transportation.
I’ve done the work on all the sources of biomass feedstock and the conversion technologies—professionally, for an energy firm that asked me what the energies of the future would be, and personally, because I’m a nerd who can’t help it. So I think the answers are there.
The second thing I’ll say is I did the math on ammonia. If you take a ton of e-ammonia and use it to fertilize biomass, the result—because of modern agricultural upskilling—is 64 tons of biofuels. If you just burn that ton of ammonia, you get exactly that: one ton of ammonia energy. But if you use it to grow biomass and make biofuels, you get 64 tons of output. So I think the math is going to become pretty obvious over time.
I think there’s a lot of emotion in the EU’s discussion around biofuels, but eventually economic rationality will prevail. That said, these are just differences of opinion. You guys make spreadsheets, I make spreadsheets. What’s going to matter is what people actually buy.
And here’s the good news: the IMO is now representative of an industry that’s getting serious about fixing climate change. And that’s a really good news story.
[TS]: Exactly. A good place to wrap up is acknowledging that, until now, it’s been very difficult to establish a clear business case for substantial investments—whether in high-quality bioenergy production that truly valorizes waste products rather than simply growing crops for bioethanol, which obviously isn’t scalable, or in synthetic hydrogen-derived fuel pathways.
The critical point is that the IMO regulations will create the business case that drives investment and innovation. We’ll gain valuable insights into both biofuels and hydrogen-derived alternatives, understanding their relative merits and trade-offs based on real-world experiences, not just theoretical debates.
This learning period over the next few years will be immensely beneficial, not just to shipping as it plans its future, but also to all sectors seeking solutions for hard-to-electrify applications.
[MB]: I always like to leave an open-ended opportunity at the end of our discussions. We’ve covered a lot of ground, but if there’s anything important we’ve missed or anything you’d like to add, this is your chance.
You have an audience of founders, CEOs, investors—all with a nerdish predisposition. Whether you want to share a key takeaway, offer advice, or even just pitch UMAS, how would you like to close this? What would you like to say with an open-ended opportunity to address this audience?
[TS]: I guess our takeaway is this: we had hoped for more clarity from the IMO outcome. We’d hoped for a steeper reduction curve, more aligned with climate science. It was difficult to celebrate fully, because the targets still aren’t entirely consistent with what we know is needed to avoid some of the most extreme climate outcomes.
Nevertheless, the shipping industry now faces dramatic and inevitable change. By 2040, we know the majority of energy used in shipping will no longer be fossil-based. The regulation now mandates a 65% greenhouse gas intensity reduction—this is binding, backed by significant penalties, enforced by an organization with a strong track record of ensuring compliance.
So, in the next 15 years, shipping will undergo profound shifts. While there remains uncertainty about exactly which fuel molecules will ultimately prove cost-optimal, the industry can now seriously strategize. Shipping requires long-term decisions—ships typically operate for around 30 years, and infrastructure such as terminals can last 40 years or more. Assets built today will soon exist in a world where fossil fuels are no longer dominant.
This presents enormous opportunities but also significant risks. The risk lies primarily in taking a “wait-and-see” approach, the traditional behavior in shipping. The opportunity comes from proactively doing the math—carefully analyzing which fuel pathways offer competitive advantages and how to build viable business cases around them. Those who move early can effectively de-risk their strategies, positioning themselves well for the coming transition.
Historically, it’s been easy to dismiss the credibility of IMO actions—but that’s changing now. I can’t think of another sector that has successfully advanced a regulatory strategy at such a global scale. There are examples where national policy has driven localized transitions, but shipping is unique in creating a global transition opportunity.
I hope this also triggers significant opportunities in lower-income countries, ensuring the energy transition isn’t solely led by North America, Europe, and China—regions with substantial public investment—but genuinely becomes a globally inclusive process. Energy transitions must encompass a wide variety of countries to succeed in practice.
[MB]: I’ll just say the IMO’s movement is a lot better than what the ICAO is doing.
[TS]: In relative terms, it certainly is.
[MB]: This has been Redefining Energy – Tech. I’m your host, Michael Barnard. My guest today was Tristan Smith, director of UMAS, a maritime advisory services consultancy, and professor at University College London’s Energy Institute. Reach out to him and UMAS to figure out what your maritime shipping organization should be doing in the coming decades—he knows as well as anybody. Tristan, thank you so much for being here and sharing your insights with us.
[TS]: Thanks so much for your time.
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