By Jonathan Strachan, Chief Technical Officer, Houlder The shipping industry is navigating uncharted waters as it confronts the complex challenge of decarbonization. A recent qualitative survey by Houlder, the London-based design and
Jonathan Strachan.
By Jonathan Strachan, Chief Technical Officer, Houlder
The shipping industry is navigating uncharted waters as it confronts the complex challenge of decarbonization. A recent qualitative survey by Houlder, the London-based design and engineering consultancy, sheds light on the tough decisions shipowners must make in a rapidly shifting regulatory and political landscape. Jonathan Strachan, Houlder’s Chief Technical Officer, offers insights from his discussions with shipowners grappling with the “uncertainty dilemma,” where hesitation and decisive action compete for priority.
The weight of uncertainty
Houlder’s survey, which involved shipowners from sectors including container, tanker, bulk, cruise, and ferry, identifies uncertainty as one of the most significant hurdles in the industry’s energy transition. Constantly evolving regulations—often vague or open to interpretation—leave many owners unsure about their next steps.
A passenger shipowner summed up the challenge with the words: “We still lack clarity on fundamental issues, like what constitutes domestic shipping or how phased policies will roll out, particularly in regions like the EU.” These unanswered questions slow momentum, forcing owners to balance immediate decisions with a wait-and-see approach.
Adding to the unease is the volatile political environment. With elections having taken place in 64 countries last year—including the United—shipowners are closely watching for potential consequences of the policy changes. Significant shifts in the U.S. administration’s approach to climate policy for example withdrawing from the Paris agreement on climate change could have a ripple effect on global sustainability efforts, while unclear guidance from transport authorities in various regions has stalled progress for many.
Regulatory pressure intensifies
While political uncertainty clouds the horizon, regulatory frameworks provide some navigational markers. Compared to two years ago, shipowners report improved clarity on measures such as the EU Emissions Trading System (ETS). Smaller operators view the ETS as a growing challenge, while larger shipowners see it as a manageable cost that informs carbon pricing and operational planning.
A more immediate concern, however, is the introduction of FuelEU Maritime. With non-compliance penalties reaching up to €2,400 per tonne of very low-sulfur fuel oil equivalent, this regulation has triggered alarm across the sector. As one respondent noted, “The penalties are steep, and they’ve shocked us into action. It’s pushed energy efficiency and alternative fuels higher up the agenda, particularly for research and development investments.”
Navigating without perfect clarity
While uncertainty persists, delaying action is no longer a viable strategy. Decarbonization deadlines are fast approaching, and waiting for complete clarity could leave shipowners exposed to financial and operational risks. 100% certainty is an illusion—leading owners aren’t waiting for perfect conditions, they’re starting the journey now. This involves adapting as they go, and partnering strategically to ensure they remain agile and informed.
This approach requires shipowners to simulate scenarios based on today’s best available data. Like ships moving through dense fog, progress may be slow and cautious, but inaction risks leaving businesses stranded as regulatory pressure mounts.
Moving forward in a shifting landscape
Houlder’s latest findings highlight that while uncertainty remains a dominant theme, it does not need to paralyze the shipping industry. Shipowners must address a range of challenges, from assessing clean technology performance to scaling up green fuels. Yet, the research is clear: progress is achievable for those willing to take calculated risks, embrace flexibility, and act decisively.
By leveraging strategic partnerships, staying informed on technological advancements, and committing to adaptable pathways, shipowners can forge ahead. Bold decisions, underpinned by informed and calculated risk-taking, are essential to keeping the industry on course for a sustainable future.
Time is no longer a luxury. The stakes are significant, but with the right tools and strategies, shipowners can navigate through uncertainty and emerge as leaders in the decarbonization journey.
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