Sustainability Transition in the Maritime Industry and Regulatory Instruments
The maritime industry and shipping — encompassing ship design, shipbuilding, shipping operations, and maritime transport — is governed by a complex framework of international agreements and policy instruments. Although shipping and shipbuilding are global activities, regulation can be highly localized. International maritime organizations, such as the International Maritime Organization (IMO), play a key role in building globally accepted consensus for the industry.
The European Parliament and the Council have emphasized the need to accelerate the sustainability transition, adopt circular economy practices, enhance material circulation, secure the availability of raw materials, strengthen security of supply, and update legislation to support these objectives. From the perspective of maritime transport, applying sustainability-driven regulation in practice includes, for example, integrating lifecycle thinking into ship design and construction, as well as reducing emissions and improving efficiency during vessel operation.
In the context of the sustainability transition, the most significant regulatory focus is on the reduction of emissions from maritime transport. Therefore, research and development activities within the industry are primarily concentrated in this area. However, from a regulatory standpoint, ensuring maritime safety always remains the top priority.
Regulation guiding the sustainability transition also has business impacts, particularly in terms of costs. Regulatory frameworks from the IMO and the EU — such as the Carbon Intensity Indicator (CII), the Energy Efficiency Existing Ship Index (EEXI), and the EU Emissions Trading System (EU ETS) — may introduce new costs for maritime stakeholders. For example, the EU ETS can increase annual costs for large vessels by hundreds of thousands or even millions of euros. This encourages shipyards to invest in energy-efficient design solutions, alternative fuels, and green technologies.
Companies that adopt new sustainability requirements early and implement new technologies proactively can gain a competitive advantage, as the number of environmentally conscious customers demanding sustainable mobility and transport solutions continues to grow. Conversely, failure to comply with regulations may lead not only to reputational damage but also to business risks, such as lower contract prices and reduced resale value of vessels.
Due to the long lifespan of ships, ownership may change several times during a vessel’s lifecycle. This also means that the applicable legislation may change multiple times during that period. As a result, the regulations governing the design and construction phases may differ from those applied during the operational phase and at the end of the vessel’s lifecycle.
From a business perspective, the sustainability transition should be regarded as an inevitable process. Regulation is continuously tightening, and new requirements are to be expected. A leading position in developing sustainable solutions may create significant business opportunities in the future. Moreover, customer demands — and the resulting pressure for the availability of sustainable solutions — are increasing. In the near future, sustainable operating models may become a prerequisite for maintaining competitiveness and remaining in the market.
You can read more about regulatory instruments and governance in sustainable shipbuilding from our extensive regulatory review produced in the S4M project: Anticipatory and proactive regulation map in the constraint of contemporary knowledge.
Author: D.Sc. (Tech.) Nani Pajunen
Circular Business Models Research Group