Ship energy efficiency

Regulations as driving factors for ship energy efficiency

IMO

At MEPC 80 in June 2023, the International Maritime Organization (IMO) agreed on a set of ambitious targets, including full decarbonization ‘by or around 2050’. Delegates also agreed to stepped targets along the way: a 20% reduction in emissions by 2030, and a 70% reduction by 2040. 

The IMO's mid-term decarbonization measures, set to be implemented in 2027, will include a goal-based marine fuel standard to reduce the GHG intensity of marine fuels and a maritime GHG emissions pricing mechanism. 

European Union (EU)

In 2024, the EU’s Emissions Trading Scheme (ETS) was extended to shipping, putting a price on carbon emissions.

In 2025 the EU’s FuelEU Maritime regulation was implemented, setting well-to-wake greenhouse gas (GHG) emission intensity requirements on energy used on board vessels over 5,000 GT trading in the EU, with financial penalties for non-compliance. 

Rising expectations from cargo owners

Demand for a greener maritime industry is increasingly being driven by stakeholders throughout shipping’s value chain. This is being led by cargo owners who are facing increased pressure from customers, investors, and society at large to reduce their carbon footprint, and make their supply chains greener.

Many cargo owners have set ambitious sustainability goals which go beyond regulatory requirements. These commitments are, in turn, leading to shipowners seeking greater emissions reductions across their fleets, with energy efficiency seen as a practical and cost-effective means of achieving this.

Financial incentives

Maritime decarbonization is increasingly prevalent in the decision-making process of financial institutions, like banks and investment funds. Several of these players now have clearly defined decarbonization targets in their portfolios and consider the decarbonization credentials of companies as a key metric when making lending or investment decisions. Access to capital from these institutions is crucial to maritime companies, which need to make significant investments in the coming years to decarbonize their fleets.

Reduce cost with ship energy efficiency measures 

With regulations putting a price on regular fuel oils, energy efficiency measures can help to reduce costs by decreasing fuel consumption. 

The business case for investing in energy efficiency measures rests on the potential for fuel cost savings within an acceptable payback period. While capital expenditure (CAPEX) and return on investment (ROI) requirements may differ among stakeholders, it is crucial to ensure that the implementation of an energy efficiency measure can reliably deliver the projected savings across various operational and environmental conditions.  

By accurately measuring and quantifying the effects of these devices in real-world operations, along with independent third-party verification of these effects, stakeholders can build trust and confidence in the performance of energy efficiency measures, while also providing knowledge for future investments. This, in turn, can speed up the adoption of such measures and support the development of new collaborative business models.