Shipping lags as other sectors drive green fuel markets: report

BCG says road, power, and aviation are shaping the supply of biofuels, ammonia, and methanol.

Shipping is not the primary driver of demand for low-carbon fuels and will rely on decisions made by road transport, power, chemicals, and aviation to shape its decarbonisation pathway, according to Boston Consulting Group (BCG).

The report said maritime players are price takers in markets for biofuels, renewable methane, ammonia, and methanol, with structural change before 2030 likely to be incremental even if new International Maritime Organization measures are adopted.

In biofuels and biogas, heavy-duty trucking fleets and utilities are driving demand through blending mandates and renewable energy targets, leaving shipping to depend on “borrowed capacity” and to compete for limited supply at premiums set by on-road sectors.

Ammonia presents a different dynamic, with Japan and South Korea promoting ammonia co-firing in coal power plants as part of their energy transition strategies.

Japan plans to import and use millions of tons annually by 2030 and has signalled tens of billions of dollars in investment to build a global supply chain, effectively positioning the Asian power sector as a market maker for low-carbon ammonia.

BCG said shipping could benefit from this buildout, with ammonia-fuelled vessels potentially becoming viable between 2030 and 2035 as infrastructure, storage, and safety protocols develop in parallel with power-sector demand.

By contrast, methanol lacks a clear external market maker. Although more than 300 methanol dual-fuel vessels are on order as of 2025, green methanol remains significantly more expensive than conventional marine fuels, and neither existing regulations nor current IMO proposals mandate its use.

Aviation could alter that balance if methanol-to-jet technology becomes commercially viable, potentially increasing global methanol demand by up to 50% beyond current projections, but such growth is unlikely before the 2030s.

The report identified several trigger points that could reshape markets, including stronger global carbon pricing by the IMO, stricter biofuel blending mandates in Asia, breakthroughs in ammonia cracking technology, and expanded sustainable aviation fuel requirements.

To secure supply in a multisector market, BCG said shipping companies should pursue collaborative procurement, co-investment with energy producers, customer-backed green corridor agreements, advocacy for supportive policies, and multifuel flexibility to manage price and sourcing risk.