With increasingly stringent emissions regulations on the horizon and a rapidly changing energy market, navigating the financial risks involved is key for ship owners and ship operators, writes Aleksander Askeland, Chief Financial Officer at Manta Marine Technologies (MMT).
This article was originally featured in Seatrade Maritime and you can access it here
Shifting regional financial markets have had a significant impact on the pace and progress of decarbonisation. The newly-introduced protectionist US tariff policy is likely to amplify this impact on a number of maritime sectors, particularly the announcement of soon-to-be-implemented US port fees for Chinese-manufactured vessels — which comprise a significant portion of the global fleet. China has announced reciprocal tariffs on US imports, exacerbating fears of a trade war and economic downturn.
Ship owners and operators already juggling difficult financial decisions required for a global transition to Net Zero may find their finances tighter, amplifying the need for any investment to offer immediate returns and cost-savings — whether in terms of greater efficiency, simplified operations, or fuel savings.
The pressure is on, and the margin for error feels smaller every day as shipping’s CEOs weigh these variables in their financial decision-making.
Despite the ongoing upheaval in trade markets, shipping’s commitment to decarbonisation remains paramount — and the risks of non-compliance are as significant as ever. The EU’s rapid adoption and implementation of a range of ambitious regulations, such as the EU ETS and FuelEU Maritime, sits alongside the International Maritime Organization’s (IMO) CII and EEXI regulations. These regulations sit within larger global conversations regarding scale and availability of low- and zero-carbon fuels, green technology retrofits to manage emissions, available capacity and infrastructure among shipyards and ports, political will and government policy — and, perhaps most importantly, the public and private funding available to make decarbonisation a possibility.
Ship owners and operators have to balance current requirements against factors already set to emerge within the coming decade. For example, the IMO’s ongoing discussions of a carbon levy indicate that this market-based measure will soon be a reality, even as questions of what the funds will be used towards and whether there is sufficient carrot to go with the stick continue to be hammered out. FuelEU Maritime mandates a gradual decrease in carbon emissions, beginning with a very achievable 2% reduction in 2025 that escalates to 80% by 2050.
Although these regulatory measures are clearly aligned with the IMO’s targets of a 20% reduction in greenhouse gas (GHG) emissions by 2030, a 70% reduction by 2040, and net zero emissions by 2050, they also indicate the scale of the challenge for ship owners and operators — whether working with large or small fleets — in an industry where the average age of a vessel is between 20 to 25 years, and where clear market leaders for fuels are still under debate. Geopolitical shifts and turmoil have also indicated abrupt shifts in the energy market, not only impacting fuel costs and availability but also longer term questions around research and development, as well as public infrastructure to support decarbonisation.
Financiers and investors are well aware of these challenges, and many banks have teams working closely with shipping’s stakeholders to understand what would be the most appropriate measures to implement for its sector-specific needs while still in compliance with guidelines such as the Poseidon Principles. In this market, emissions reduction technologies need to be proven, independently verified, and viable to scale. Ship owners and operators also know that technologies retrofitted onboard need to be balanced with commercial considerations, such as time in drydock or training for crew.
Even with the urgency of decarbonisation, shipping’s bottom line remains unchanged: it is a business, and any investment must be guided by value rather than sentiment. The onus, therefore, lies with green technology providers, like us at Manta Marine Technologies (MMT), to ensure that any products that go to market have a robust business case and can demonstrate the results advertised — communicating not only the potential emissions reductions, but also the larger benefits for commercial operations.
Understanding and alignment on these key shared goals not only advances operations towards Net Zero, but also supports ship owners and operators with the management of financial risk.
Green technologies to reduce emissions are urgent and expensive — there is no point pretending otherwise. We already know that most ship owners and operators will be only able to afford a limited number of technologies to support their decarbonisation efforts, based on their financial capacity. Additionally, the technology in question is likely to impact existing models of operation and require amendments, adding new operational risks to this scenario. These operational risks have the potential to compound financial risk — particularly if a shipping company has taken the grand leap of major investment in a single technology or alternative fuel to future-proof their vessel or fleet.
For most shipping companies, the solution tends to be more diversified and risk-averse. By investing in a number of decarbonisation technologies that are lower priced and lower in risk profile, they are able to make significant gains — trusting that these technologies will not only produce a rapid return on investment but also contribute towards profitability in other ways.
For example, MMT’s propulsion optimisation system, FuelOpt, is a fuel agnostic bolt-on technology for existing vessels across all sectors. Whether a ship switches fuel in its dual-fuel engine or undergoes an engine retrofit, the system demonstrates long-term investment value by continuing to deliver on the unchanged fundamentals — using less fuel saves money and reduces emissions. Installation of the system does not require drydock and neither does its removal, keeping cost and operational impacts at a minimum.
This offers immediate savings on fuel cost without significant changes to operational models, and offers a return on investment whether considered a tool or a necessary investment. For example, charterparties may find this offers a simple and mutually beneficial scenario, with charterers paying a fixed rate to ship owners for use of the technology onboard and financially benefitting themselves from fuel savings and simplified compliance with emissions targets.
For smaller ship owners and operators, subscription models are also a prime example of increasing adoption with reduced financial risk. Subscriptions grant access to the same optimisation, cost savings and emissions reductions by a route that is more affordable and viable to smaller shipping businesses — allowing them to progress their decarbonisation efforts and avoid the reputational, operational and financial risks associated with non-compliance.
The use of multiple green technologies onboard can also combine towards greater emissions savings when these work in harmony. In fact, there are times when the combination of technologies can ensure that the operational risk introduced by one new technology is safely mitigated by the other.
For example, utilising FuelOpt alongside Wind-Assisted Propulsion (WAP) technology onboard allows vessels to safely reap the full benefits of fuel savings and emission reductions. FuelOpt’s patented Dynamic Power Limits mitigate the challenges that arise at low engine speeds, ensuring that levels never fall below a preset minimum engine load even when utilising wind power. This prevents the likelihood of an engine blackout or the requirement for auxiliary blowers to utilise fuel and create emissions while getting the engine back to required air pressure limits. The result is not only the promised fuel savings and emissions reductions, but also greater operational safety as the likelihood of this potentially costly scenario is mitigated early without adding to administrative burden onboard.
For a risk averse industry like shipping, decarbonisation is not just about compliance — it is about making informed, strategic choices that support long-term operational and financial stability. Shipping companies cannot afford to gamble with financial stability, and green technology providers are key partners in mitigating that risk — evolving our approach, collaborating on solutions, and tackling the new challenges that emerge as we progress.
Trust is key to this process, and that trust relies on understanding the financial and operational drivers around shipping’s decision-making. Working together, we can ensure that the transition to a greener future is not just a regulatory obligation but a smart, strategic move toward long-term success.
Aleksander Askeland is Chief Financial Officer at Manta Marine Technologies since January 2024. Aleksander has worked for the broader Yara group from 2016 until the acquisition of Yara Marine Technologies by Okapi Supply Trading SA in 2024. Prior to joining Manta Marine Technologies, Aleksander worked four years as Director for Sales & Business Development for Store Norske Spitsbergen Kulkompani in Svalbard and before that, six years for the Boston Consulting Group. Aleksander holds a Master’s degree in Economics from Yale University and a Bachelor of Arts from Oxford University.
