Passenger shipping is at a pivotal crossroads in its sustainability journey. Although the sector represents a relatively small share of global maritime emissions, it sits at the forefront of public attention on the environmental impact of shipping. And like the rest of the industry, it is grappling with the challenge of impending regulation, with the International Maritime Organization (IMO) targeting at least a 20 per cent cut in greenhouse gas emissions by 2030 and net-zero “by or around 2050.”
For passenger shipping companies, the transition presents both challenges and opportunities. Long fleet lifecycles and high investment costs demand careful planning, but advances in alternative fuels, electrification, vessel design, and digital optimisation are already reshaping operations and the pace of development has the potential to make some newbuilds out of date before they launch. As passenger demand for greener travel grows, the industry is seizing the chance to position itself as a leader in maritime decarbonisation.
The pressure placed on companies is considerable, with regulations now threatening financial consequences for non-compliance. Among the most major recent developments has been the agreement of the IMO’S Net-Zero framework in April 2025. The mandate – expected to come into force in 2028 – will require ships over 5,000gt to progressively reduce their greenhouse gas fuel intensity (GFI), a measurement that refers to the emissions produced for each megajoule of fuel used.
This is paired with the first legally binding global greenhouse gas pricing mechanism for the shipping industry. Companies with vessels that do not meet their GFI targets must purchase “remedial units” through this mechanism, while those that outperform them can generate “surplus units”. These units can be traded through the IMO Net-Zero Fund, which will invest into the development of clean fuels and emission-reducing technology, as well as providing support for developing nations.
The framework comes at the same time as the introduction of region-specific regulation. The FuelEU Maritime Regulation mandates that ships over 5,000gt must reduce their carbon intensity or face penalties, as well as requiring all passenger ships to connect to onshore power supply where it is available by 2035. The considerable overlap between this regulation and the IMOs Net-Zero Framework could cause confusion and inefficiency, suggests Philippos Ioulianou, managing director of EmissionLink, a service provider specialising in emission scheme management.
“If the IMO’s system comes into force in 2028 while FuelEU is already active, we risk at least two years of duplicated monitoring, verification, and penalties,” he says. “Without regulatory alignment, shipowners will pay twice for emissions that should only be counted once – and that could actively hinder the path towards decarbonisation.”
This warning about the complexity of regulations is echoed by Mark Towl, principal regulatory risk specialist for Lloyd’s Register, who suggests that the recent regulation could have a profound impact on the operation of the shipping industry.
“The number and complexity of the regulatory updates that are taking place is challenging to understand,” he says. “The recent agreement to a Net Zero Framework to reduce the GHG intensity of shipping, and the consequential measures to enable that to happen safely, are historically among the biggest regulatory disrupters to shipping’s business model.”
Propellers can be redesigned to match the operational profile of a vessel to maximise efficiency
It’s therefore of vital importance for operators to be investing in ships capable of consistently meeting these targets across their lifetime. The design of these ships will need to take advantage of new technologies in order to achieve this goal, with the biggest savings to initially be made in the use of more efficient alternative fuels.
“It’s important for passenger ship owners to develop a fuel strategy for their entire fleet,” says Brian Bender Madsen, head of machinery and systems at naval design consultant KNUD E. HANSEN. “They need to be planning upgrades whenever necessary in order to keep their fleet compliant with new regulations. This will require a comprehensive study in order to develop the most effective strategy, considering both the cost of the upgrade and of operating the vessels.”
Wind propulsion systems are also being explored by some operators as a possible option for reducing fuel consumption. Orient Express Corinthian, currently under construction by Chantiers de l’Atlantique, will feature three SolidSail rigid sails, each of which will span 1,500 square metres. The sails will work alongside an LNG-powered engine, though may be able to provide up to 100 per cent of the energy needed for propulsion under ideal weather conditions, according to manufacturer SolidSail.
Madsen also suggests a combination of hull, propulsion, and energy-system improvements that can be made by passenger shipping operators to reduce their greenhouse gas intensity. These include air lubrication systems that reduce friction between the hull and water, waste heat recovery systems that capture engine energy for auxiliary power, and propeller redesigns or repitching to match new operational profiles. Existing vessels can also benefit from bulbous bow modifications optimised for current speed and route conditions. Onboard energy use can be lowered through optimised HVAC systems and engine/exhaust energy harvesting, while the increasing prevalence of shore power systems enable ships to significantly reduce their emissions.
Mia Elg, R&D manager at maritime consultancy Deltamarin, identifies three key questions as essential for deciding on a solution for a shipowner looking to design a low-emission vessel.
“Our work starts with answering: What fuel type? Which energy saving technologies? What power train set-up?” she says. “We build out the optimal solution from there. We have a holistic view of ship design that enables us to orchestrate the ship systems that are most appropriate to the required operational demands of the vessel and to present an optimised package of technologies that will realise the greatest efficiencies and ultimately the most profitable return on operations.”
As passenger shipping navigates this era of unprecedented regulatory and technological change, the industry faces a dual challenge: compliance and competitiveness. Meeting the IMO Net-Zero targets and regional regulations will require careful planning, long-term investment, and adoption of cutting-edge technologies, from alternative fuels and energy-efficient hull designs to advanced onboard systems.
Yet, these challenges come with a clear opportunity: operators that proactively embrace decarbonisation can differentiate themselves in a market increasingly driven by environmental awareness and reduce operational costs over the long term. By preparing their vessels for the future, they can both safeguard the value of their investments and help to shape maritime travel in the years to come. Those that see the opportunity in this pivotal moment may be able to not only meet emissions requirements, but also turn sustainability into a strategic advantage for their fleet and their brand.