103 Photo: Orient Express Sailing Yachts 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optimisation are already reshaping operations and the pace of development has the potential to make some newbuilds out of date before they launch.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 regionspecific 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” Mike Towl Lloyd’s Register
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