The maritime industry is amidst a profound transformation driven by technological advancements, environmental legislation and evolving market dynamics. These developments will have a varying degree of impact on the marine fuels and lubricants industry, and the implications for suppliers of these products will again vary depending on their scale and geographic footprint.
Figure 1 shows the top ten developments that will have potential implications for the suppliers of fuels and lubricants for marine customers. Understanding the timing and magnitude of these changes is crucial for anticipating their full impact.
For measuring the impact of each of these developments for marine fuels and lubricants, continuous tracking is required to effectively comprehend the timing and degree of impact. Let’s discuss some of the above topics at a more granular level.
Decarbonization of Marine Transport
The shipping industry is grappling with the far-reaching implications of a host of regulations such as the EU Emissions Trading System (EU/ETS), the International Maritime Organization’s (IMO) Carbon Intensity Indicator (CII), global greenhouse gas reduction targets, the Vessel Incidental Discharge Act (VIDA), the FuelEU Maritime initiative, and the Energy Efficiency Index for Ships. These legislations aim to reduce the environmental footprint of maritime operations and demand significant adaptations from the sector. To comply with these stringent requirements, shipping companies are exploring various pathways, including adopting energy-efficient technologies, investing in low-emission fuels and implementing operational changes to meet evolving carbon intensity and emissions benchmarks.
Figure 1. Top 10 trends in marine industry and their directional impact on fuel and lubricants business
Source: Kline & Co.
Shipping companies are also weighing their options between transitioning to alternative fuels such as liquid natural gas, biofuels, methanol and ammonia, which promise lower emissions, and adopting hardware solutions like exhaust gas cleaning systems (scrubbers) that help meet immediate compliance needs. The choice often hinges on factors such as cost-effectiveness, fuel availability and long-term sustainability goals. Additionally, there is significant focus on the role of technology innovation, including advanced energy-saving devices, digital optimization tools and potential breakthroughs in renewable energy integration, such as wind-assisted propulsion systems.
Looking ahead, the pace of technology adoption is expected to accelerate as companies seek to stay competitive and align with global sustainability objectives. Collaborative efforts among stakeholders, such as shipbuilders, fuel suppliers and regulatory bodies, are fostering innovation and expediting the transition to greener shipping practices. The industry’s response to these challenges reflects a proactive commitment to reshaping its operations for a low-carbon future while navigating the complexities of compliance and technological transformation.
Economics
Understanding the implications of the broader macroeconomic environment is critical to assessing the financial health and strategic ambitions of shipping companies. Factors such as global trade fluctuations, interest rates, inflation and geopolitical uncertainties directly influence shipping demand, operational costs and companies’ ability to invest in sustainable technologies. In response, shipping companies are adopting financial risk management strategies, diversifying operations and engaging in long-term planning to weather economic volatility while pursuing green initiatives.
The price outlook for various grades of marine fuels, including traditional heavy fuel oil, LNG, biofuels, and emerging alternatives like methanol and ammonia, will play a significant role in shaping the industry’s fuel technology adoption. Price stability, regional availability and carbon taxes are driving the transition toward cleaner fuels. Governments and organizations are promoting this shift through subsidies, research grants and infrastructure investments for alternative fuels, thereby influencing the pace and scale of technology integration in the sector.
Furthermore, the choice of marine fuels and their associated technologies will continue to reshape the formulation of marine lubricants. As engines evolve to accommodate new fuel types with different combustion characteristics, lubricant manufacturers will need to develop specialized formulations to ensure optimal engine performance, compatibility with alternative fuels and compliance with environmental regulations. Collaborative efforts between fuel producers, OEMs, and additive and lubricant suppliers are advancing this adaptation, ensuring that the shipping industry can transition seamlessly toward more sustainable operations.
Shifting Customer Preferences
As a result of the above, preferences of ship charterers have been shifting where they are trying to balance their sustainability and profitability ambitions. This is directly influencing the operational and procurement strategies of ship owners and managers. For instance, charterers are prioritizing vessels that meet stringent environmental standards. This is pushing owners to adopt cleaner fuels, energy-efficient technologies and sustainable practices. To address these evolving demands, ship owners are investing in green retrofitting, low-emission engines and digital tools to monitor and optimize environmental performance. Buyers will likely prioritize suppliers that offer tailored solutions, technical support and products compatible with sustainable shipping trends. These efforts aim to align with charterers’ sustainability goals while enhancing operational efficiency.
Mapping the lubrication solutions with target customers will be crucial in this evolving market. Key segments include ship owners transitioning to low-emission technologies, operators with a focus on fuel efficiency and fleets adopting alternative fuels. Suppliers will be addressing these needs by collaborating with shipyards, fuel providers and engine manufacturers to develop innovative lubricant formulations that meet both current and future requirements. This targeted approach ensures alignment with market demands and positions suppliers to capture emerging opportunities.
There are several uncertainties that could influence the pace and trajectory of change within the marine fuel and lubricants industry. For example, geopolitical factors may impact supply chains, potentially reshaping the selection of ports for fuel and lubricant sourcing across different regions, either temporarily or permanently. Additionally, the availability of supply infrastructure and raw materials—particularly for low-emission fuels—will play a critical role in shaping future hotspots for marine fuel and lubricant development. To navigate these shifts, suppliers must adopt a more objective approach to evaluating options, focusing on capital investments and fostering synergistic partnerships.
The composition of global trade is undergoing significant shifts, particularly with the growing demand for clean energy in both transportation and industrial applications. This transformation raises important questions about how the configuration of marine cargo—currently dominated by fossil fuels, which account for 40% of the total—will evolve. Changes in cargo demand may also influence the design and requirements of shipping vessels. Additionally, the energy transition is poised to impact the inland marine segment, presenting new opportunities and challenges for fuels and lubricants in areas such as offshore oil rigs and the offshore wind service industry.
Understanding the impact of these developments thoroughly is essential for crafting a future-proof strategy for the marine fuels and lubricants business. Although there remains considerable uncertainty around the choices customers will make, the key drivers behind those decisions are becoming clearer. These choices will be heavily influenced by climate priorities, as well as growing geopolitical and macroeconomic shifts.
Kline’s Marine desk continues to monitor developments in the maritime industry, providing global and regional clients with actionable insights and scenario analysis of emerging opportunities in the marine fuels and lubricants market. Don’t hesitate to reach out for further information on how Kline can help you navigate the turbulent tides and capitalize on the shifting landscape of the marine industry.
Satyan Gupta is director, Energy Practice for Kline & Co.