ON THE HORIZON 2026 | Who Blinks First? The VHS vs Betamax Problem at the Heart of Maritime Decarbonisation

Introduction

The problem at hand is that there is increasing pressure to reduce GHG emissions, and development of EU regulations in this area means that inaction is likely to be costly. However, with a range of alternative fuels available, how do you make sure that when you make your choice and invest your millions, whether that be in expanding a fleet or expanding port facilities, you pick VHS and not Betamax?

This is a problem faced by both ports and shipowners. Shipowners expanding their fleet want to know that their chosen fuel will be readily available and want the ports to tell them what they are planning on bunkering, the ports on the other hand want to know that they are meeting the needs of shipowners and want certainty that there will be sufficient demand for their chosen fuel and want shipowners to commit before they make their decisions, and so you have a standoff.

Why is this such a problem, and what is the cost of switching if you get it wrong? Arguably, the ports have the tougher position here. They will have to consider not only space constraints, but also planning and consenting which may vary greatly depending on the type of fuels used. Given the time that the planning and construction takes, if they get it wrong, changing will be an uphill battle. That said, the cost for shipowners if they get it wrong is undoubtedly high, but they do not have the same regulatory hurdles to overcome before making a change – it is essentially a money problem.

This article will explore what options are available, the models that have been developed to try to unlock the situation and what issues remain unsolved and may require further regulatory intervention.

The Regulatory Gun at Everyone’s Head

The pressure to act is now embedded in hard law, and the financial consequences of inaction are rising year on year.

The EU moved first and fastest. The extension of the EU Emissions Trading System to shipping in 2024, followed by the introduction of FuelEU Maritime in 2025, means that every vessel calling at a European port is already paying a price for its emissions. That price will increase progressively through the decade. For owners operating on intra-European routes or calling regularly at EU ports, the cost of running on conventional fuel is now a balance sheet item.

At the global level, the IMO approved its Net-Zero Framework at MEPC 83 in April 2025, combining a mandatory GHG fuel intensity standard with a pricing mechanism for emissions. This is the first binding regulation of its kind applied to an entire global industry. Ships that fail to meet the targets will purchase remedial units at significant cost; those that outperform will generate tradeable credits. The framework was due for formal adoption in October 2025 but was adjourned to 2026, adding another layer of uncertainty to an industry already struggling to plan ahead.

How do you break the deadlock?

There is not an easy, clear cut answer to this. If there were, the deadlock would probably have been resolved by now. It is made more complicated by the fact that there are not just two options, there are a number of candidate fuels that all have different strengths and weaknesses, and we have prepared an overview table at the end of this article. Because of the multitude of options, there is also a multitude of possible commercial solutions.

The Gothenburg example

The Port of Gothenburg has been an early mover on setting Net Zero targets and has set clear ambitions to reduce shipping emissions within the port by 70% by 2030. They got off to a great start in 2022 when they announced a joint project where they would partner with ferry companies Stena Line and DFDS and energy companies Ørsted and Liquid wind to build an e-methanol plant.

However, despite early enthusiasm, the project ran into difficulties. Ørsted withdrew from the project only a year after breaking ground in 2023, citing a failure to secure off-take agreements at an acceptable price and, crucially, of a suitable duration. Ørsted was looking for long term off-take agreements of 10-15 years to secure a bankable income stream, however, most shipping companies are looking for 1-3 year commitments.

Whilst the original collaboration has not succeeded, LiquidWind has since secured funding for a larger and more extensive plant in the same location, so there is hope still for the project. However, it is an interesting cautionary tale which shows that collaboration is possible, but when you have parties from different expectations you need to work carefully to align interests.

Shipping corridors

An alternative attempt at unlocking the situation is the use of shipping corridors. A prime example is the Rotterdam-Singapore shipping corridor which is based on methanol bunkering in both ports, bio-LNG pilot projects and aligned safety standards. The initiative has 28 industry partners.

The benefit of this initiative is that it is aimed at a wider range of participants. A bit like how VHS worked with video rental stores to push for more widespread adoption, this has a clear advantage as a greater number of participants is likely to lower costs in the long run. However, the contractual framework for this arrangement is practically non-existent. It is based on MOUs and co-operation agreements rather than long term, binding contracts. Whilst it might mobilise a greater number of participants, you cannot create a bankable project based on MOUs alone.

Fuel producer and shipping collaborations

A third option sees fuel producers and shipowners joining forces as we have seen with the Proman Stena Bulk joint venture. Proman needed vessels to transport methanol from its production hubs in Trinidad, Texas and Oman to customers in Asia and Europe and rather than chartering third-party vessels, it partnered with an experienced tanker operator to build and run a dedicated dual-fuel fleet running on its own product. With all six ships now operational, the JV has systematically opened new bunkering points — completing the first methanol bunkering at the Port of Houston, the Port of Savannah and the Port of Singapore, and developing bunkering infrastructure at over 50 ports globally. The fuel producer, the shipowner and the port are in this scenario building the same value chain, and offering the financing model to other shipowners who want to follow the same path.

Conclusion

There is no simple answer to the question of which fuel type wins, nor to the answer of who needs to blink first. That said, there are some commercial and practical realities that should help map the way.

Port expansion projects are expensive and time consuming and no sensible port operator will commit without some fairly long-term commitment from users — the risks are simply too high.
Loose frameworks can be facilitated by ports and can help move the needle and facilitate projects, but they cannot be the basis for big, bankable projects.

Fuel producers need to consider not just the technical merits of their fuels or the price, they also need to consider how best to facilitate and support the development of critical infrastructure that makes their fuel attractive. To return to VHS and Betamax, VHS made early crucial choices which helped secure commercial victory, and those choices were centred around two key points — creating machines that were cheaper to make and therefore more readily available and, crucially, working with motion picture companies to help launch the home rental market. Fuel producers should consider strategic commercial moves that help open up the market for their product.

The models explored in this article show that the industry is capable of innovation when the commercial incentives align. But the gap between what industry can achieve alone and what the scale of the transition demands may yet require regulatory intervention. Until then, ports, shipowners and fuel producers may all continue to wait for someone else to blink first.