Phased Fuel Transitions for Decarbonizing the Asia–Europe Green Shipping Corridor

August 24, 2026

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(Nature Sustainability) International shipping stands at a pivotal juncture in its decarbonization efforts, yet a comprehensive assessment of viable fuel transition pathways remains scarce. Here we develop a dynamic life cycle assessment framework integrated with system dynamics to evaluate 13 alternative marine fuels (for example, ammonia, methanol, hydrogen and soybean-based biodiesel) for the Asia–Europe Green Shipping Corridor through 2050.

The framework incorporates climate impacts, environmental sustainability, energy efficiency and economic feasibility. Under three scenarios (Business as Usual, Most Economical and Maximum Carbon Reduction), this study accounts for key dynamic parameters, including technology learning curves.

Results indicate a phased transition: soybean-based biodiesel offers a near-term solution, while electrofuels dominate after 2040.

The International Maritime Organization’s Net-Zero Framework progressively narrows regional cost–emission gaps, whereas the European Union’s FuelEU Maritime regulation introduces a cost premium of up to 7.6%. These results indicate that policy design and regulatory stringency substantially shape fuel transition trajectories for maritime decarbonization.

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To address this gap, we developed a dynamic LCA framework that integrates system dynamics (SD), moving beyond static snapshots to capture the evolving, multidimensional performance of alternative marine fuels through 2050. It assesses four dimensions: climate impacts, environmental sustainability, energy efficiency and economic feasibility (termed Climate-3E). The framework is applied to a critical case study: the Asia–Europe Green Shipping Corridor, selected for its high trade volume and potential exposure to dual regulatory pressures from the IMO Net-Zero Framework and the FuelEU Maritime regulation. The analysis encompasses 13 alternative fuels, benchmarked against heavy fuel oil (HFO) and marine diesel oil (MDO), including biodiesel, denoted as soybean-based fatty acid methyl ester (FAME); methanol variants: coal-based (Coal-MeOH), natural gas-based (NG-MeOH), electro-MeOH (e-MeOH) and bio-derived (bio-MeOH); liquefied natural gas variants: conventional (Conv-LNG), electro-LNG (e-LNG) and bio-derived (bio-LNG); liquid hydrogen variants: conventional (Conv-LH2), electro-LH2 (e-LH2) and bio-derived (bio-LH2); liquid ammonia variants: conventional (Conv-LNH3) and electro-LNH3 (e-LNH3).

This study addresses a central question for the maritime low-carbon transition: which fuel transition pathways can most effectively decarbonize global shipping under the evolving IMO Net-Zero Framework and the FuelEU Maritime regulation? The proposed dynamic modelling framework reveals how policy timing and regulatory stringency may shape future mitigation outcomes, clarifying the conditions under which alternative fuels gain or lose competitiveness. While the modelling framework cannot encompass all factors influencing decision-making, it provides forward-looking, scenario-based projections of fuel competitiveness and transition trajectories, thereby empowering shipowners, policymakers and investors to make informed decisions. By illuminating the dynamic interplay of policy, technology and fuel competitiveness, this study supports confident, timely commitments to the most robust and scalable pathways for a climate-resilient maritime future.

Results

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Figure 1a shows that hydrogen-based marine fuels, particularly electro- and bio-LH2, achieve near-zero life cycle GHG emissions in most scenarios. Conv-LH2 also delivers substantial GHG emission reduction compared with HFO and MDO. However, the low energy density of hydrogen fuels limits their practical use, often requiring 30–70% blending with diesel on long voyages, diminishing overall climate benefits19,20. Bio-LNG emerges as a viable transitional fuel, offering substantial emission reductions due to biogenic carbon uptake21. By contrast, Conv-LNG exhibits higher life cycle emissions than HFO and MDO due to methane leakage and the energy-intensive liquefaction process22. E-LNG performs between bio-LNG and HFO under current energy structures. All LNG-based pathways retain lower long-term emissions, underscoring their continued relevance for the low-carbon transition.

Conversely, methanol- and ammonia-based fuels, including their electrofuel (e-fuel) variants, generally exhibit higher life cycle emissions than HFO and MDO, because their low energy density increases fuel consumption per distance travelled, and fossil-derived variants (Coal-MeOH, NG-MeOH and Conv-LNH3) rely on carbon-intensive synthesis23. While bio-MeOH offers meaningful emission reduction, the climate performance of e-MeOH and e-LNH3 remains strongly constrained by the carbon intensity of the electricity mix. Under current fossil-dominated grids, their carbon footprints may exceed those of HFO and MDO.

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How the electricity mix shapes e-fuel performance

The performance of e-fuels is powerfully shaped by the carbon intensity of the electricity used in their production. To evaluate this influence in a strategic decarbonization context, this study focuses on the Asia–Europe Green Shipping Corridor, which has high trade volumes and is likely to face dual regulatory pressures from the IMO Net-Zero Framework and the EU’s FuelEU Maritime regulation. Figure 2 summarizes the installed renewable power generation capacity along this corridor35, highlighting regional disparities that underlie fuel competitiveness.

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From a climate perspective (Fig. 3a), renewable electricity is pivotal for e-fuels to achieve deep-life cycle GHG cuts. Conventional and biomass-derived fuels, such as Coal-MeOH, NG-MeOH, Conv-LNG and bio-variants, exhibit limited sensitivity to the electricity mix, whereas e-fuels show pronounced variation. Under the renewable electricity scenario, e-LNG and e-LNH3 achieve low emissions, while e-MeOH remains carbon-intensive due to process-related N2O and CH4 emissions during synthesis36.

Environmental performance (Fig. 3b) further illustrates the influence37. The carbon intensity of e-fuels declines substantially as renewable electricity penetration increases. Biofuels remain stable in carbon intensity because they rely little on electricity. Under the renewable scenario, Conv-LNH3 achieves a carbon intensity of 0.002 kg of CO2 per tonne·nautical mile, below the regulatory benchmark, and both e-MeOH and e-LNG can attain negative carbon intensity.

Energy performance (Fig. 3c) shows that renewable power has a limited impact on conventional and biomass-derived fuels, whose life cycle energy consumption depends on the feedstock and process technology. By contrast, renewable power substantially reduces the energy intensity of e-fuel production33. For example, the life cycle energy consumption of renewable-powered e-MeOH, e-LNG and e-LNH3 is reduced by 57.2%, 56.8% and 41.5%, respectively. This improvement stems from the higher efficiency of renewable electricity systems relative to fossil-derived thermal generation. Economic outcomes (Fig. 3d) are less responsive to changes in the electricity mix. However, the declining cost of renewable energy enhances the long-term competitiveness of e-fuels38,39. Continued advances in renewable technologies and the scaling of e-fuel production are expected to strengthen their economic viability further.

Annual costs and emissions under dual regulatory scenarios

The transition to low-carbon marine fuels is a long-term, dynamic, path-dependent process. An analysis is therefore essential to capture total emissions over the transition period, avoiding misinterpretation from short-term fluctuations. Guided by this perspective, transition outcomes across key regions along the Asia–Europe Green Shipping Corridor—from Japan, through China (East Asia), Malaysia (Southeast Asia), the United Arab Emirates (Middle East), Egypt (Africa), to Europe—are compared under different policy scenarios, as simulated in Fig. 4.

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Policy scenario

This study examines three distinct regulatory scenarios to understand their individual and combined effects on the fuel transition (Supplementary Fig. 4). The first scenario models the IMO Net-Zero Framework, incorporating its ambitious targets and economic mechanisms, including increasingly strict annual limits on GHG intensity, a two-tier penalty system and its flexibility provisions. The second scenario models the EU’s FuelEU Maritime regulation, which mandates a gradual reduction in the average carbon intensity of energy used by ships calling at EU ports. This includes imposing a penalty of US$730 per tonne of CO2e for non-compliance and accounting for flexibility regulations, such as banking, pooling and the 50% emissions requirement for voyages involving only one EU port. The third scenario combines both frameworks, where vessels must comply with both sets of rules. In this case, more stringent requirements apply to each compliance element, and the total compliance cost is the sum of expenses incurred under each policy. This combined scenario tests the interaction and potential synergy or conflict between the global, market-based IMO policy and the regional, prescriptive EU regulation. READ MORE