Travel, Logistics & Infrastructure Practice

Destination zero: An
action plan for shipping
CEOs
The transition to zero carbon can be a value-generating opportunity
for shipping companies—if they are proactive and purposeful, rather
than reactive and defensive.
This article is a collaborative effort by Susann Almasi, Martin Joerss, Arjen Kersing, Matt Stone,
Benjamin Weber, and Apostolos Zampelas, representing views from McKinsey’s Travel, Logistics &
Infrastructure Practice.

© MR1805/Getty Images

December 2022
 Decarbonization has risen rapidly up the agenda
of shipping CEOs. The shipping industry—one
of the most costly and challenging sectors to
decarbonize—faces growing calls by shareholders,
regulators, customers, and other stakeholders to
decarbonize at a pace commensurate to the needs
of a warming planet. The EU, International Maritime
Organization (IMO), and individual countries are
tightening carbon regulations, while customers
and clients want decarbonized shipping to meet
their own Scope 3 decarbonization targets.1 The
same goes for lenders trying to decarbonize their
lending portfolios,2 and environmental groups and
civil-society organizations are campaigning for
decarbonization more vigorously than ever.
On top of this, as shipping CEOs work to steer their
organizations through a multidecade transition to
net zero, they are simultaneously having to juggle
near-term market disruptions, geopolitical tensions,
crewing challenges, and burgeoning digitalization.
What is a shipping CEO to do?
On the one hand, inaction is a default choice.
Some shipping companies have taken a posture
of “strategic patience.” Choosing from a sea
of emerging sustainability technologies and
alternative fuels can feel more like a gamble than
a savvy investment. A wrong choice could have
ramifications lasting as long as a ship’s life span,
which is often more than two decades. Currently,
the production and bunkering infrastructure for
alternative fuels does not exist at any meaningful
scale. Moving too early may saddle the business
with an uncompetitive cost structure. The regulatory
environment remains murky and uncertain. In this
context, “wait and see” seems more prudent.
On the other hand, “green leaders” have chosen to
act purposefully to try to cut through the uncertainty.
They seek to capture the emerging “green premium”
for decarbonized shipping services from customers
and get ahead of the coming regulations such as the
Carbon Intensity Indicator (CII), Energy Efficiency
Existing Ship Index (EEXI), EU Emissions Trading
System (EU ETS), and potentially IMO-mandated
carbon pricing. They anticipate a “green fuels”
shortage in coming years and want to lock in supply
now, turning this into a significant competitive
advantage. They look over the horizon and aim to
avoid stranded-asset risk in the coming decades.
These companies are following the maxim of the
great ice hockey player Wayne Gretzky, “I skate to
where the puck is going to be, not where it is.”
Both postures are built on fiercely held beliefs
about the future, and there are no simple answers
to the questions surrounding decarbonization. It
is no exaggeration to say that how one chooses
to decarbonize—at what pace, with which
technologies, and to what degree of integration
with the company’s asset strategy and commercial
posture—is one of the biggest strategic choices
facing shipping CEOs right now.
What would be imprudent is not to have a plan at
all, and not to stress-test that plan against a range
of scenarios. Given the significant uncertainties
around future costs of technologies and fuels,
policy, customer demand, the financing landscape,
and other factors, CEOs need clarity on what
decarbonization moves are “good for all seasons”
and which ones should be made only under certain
conditions. The plan needs to be robust and
practical at the level of each individual vessel (for
example, which retrofits to do at the next dry dock
and which propulsion and fuel pathway to choose
for each new build) while also satisfying a portfolio-
level decarbonization pathway and financial-return
profile (see sidebar “What a decarbonization action
plan looks like”).
This article presents three levers that decision
makers can activate to accelerate the industry’s
transition toward zero carbon and capture value
in the process (see sidebar “A decarbonization
action plan checklist”). Each lever—fleet, fuel, and
commercialization—represents a critical aspect that
shipping companies could address now. As we’ll

1
For example, the Cargo Owners for Zero Emissions Vessels (coZEV) initiative orchestrated by the Aspen Institute has 19 cargo owners,
including Amazon, Ikea, and Unilever, which are demanding zero-carbon container shipping by 2040—well ahead of IMO targets and those of
many shipping companies.
2
For example, 30 banks representing approximately two-thirds of global ship financing have signed up to the Poseidon Principles, which aim
to reduce the total annual greenhouse-gas emissions in shipping by at least 50 percent by 2050.

2 Destination zero: An action plan for shipping CEOs

What a decarbonization action plan looks like

For companies embarking on a
decarbonization transformation, an
action plan helps to incorporate both
bottom-up and top-down tactical actions
at the level of each individual vessel,
which, in aggregate, meet a fleetwide
target trajectory for decarbonization and
optimize for cost and capital expenses.
Some companies approach this purely
at the level of individual vessels (“What
efficiency technologies are net-present-
value-positive and should we install
them?”); others make overly sweeping
generalizations about future fuels (“We
will move our entire fleet to ammonia”).
In our experience, the cost-optimal
decarbonization pathway is more nuanced
than either approach.
In collaboration with the Mærsk McKinney
Møller Center for Zero Carbon Shipping,
for which McKinsey acts as a knowledge
partner, we’ve created the Fleet
Decarbonization Optimizer tool. The tool
harnesses the proprietary bottom-up
cost modeling of the Center’s NavigaTE
model and optimization algorithms to
rapidly identify the specific actions
across fleet and fuel that will meet a given
decarbonization objective.
Given the level of uncertainty, actions vary
by scenario. Even within a single scenario,
a shipping fleet may adopt multiple fuel
pathways. And each vessel will have its
own unique adoption of energy-saving
devices, based on the specific operating
characteristics, age, and starting efficiency
of a vessel (Exhibits A and B).

Web 2022
ShippingIndustryCarbonZero
Exhibit A
Exhibit 1 of 4

Use of LNG, biodiesel, e-ammonia, and bio-/e-methanol differs substantially

depending on assumptions about the future.

Illustrative projected fuel consumption by scenario, and characteristics of scenarios

Delayed transition Current momentum Accelerated transition Heavy fuel oil (HFO),
marine gas oil (MGO)
70
60 Biodiesel
50 Liquefied natural gas
(LNG)
40
30 E-methane (PS)
20 Ammonia (green and blue)¹
10 E-methanol (PS)
0 Bio-methanol
21 30 40 50 21 30 40 50 21 30 40 50

Commonalities and
HFO-powered vessels until 2050 differences between
scenarios
Biodiesel major
Limited use of biodiesel
transition fuel

LNG (including bio- and e-LNG) plays a meaningful role

Alternative fuels² not

Alternative fuels² introduced from ~2030
introduced until ~2040

Bio-/e-methanol scaled in 2030s

1
Ammonia (blue) is only in the current scenario for the year 2040.
²Alternative fuels include ammonia (green and blue) and e-methane liquid (PS).

McKinsey & Company

Destination zero: An action plan for shipping CEOs 3

 What a decarbonization action plan looks like (continued)

Web 2022
ShippingIndustryCarbonZero
Exhibit B
Exhibit 2 of 4

Various efficiency technologies are adopted (or not adopted) depending on

total-cost-of-ownership economics.

Projected ship count per year by energy efficiency lever¹

Main engine levers

Fuel-efficient Hull Propeller Propeller Rudder Trim and draft Weather
paint cleaning cleaning improvement autopilot optimization routing
devices
15
10
5
1
21 25 30 21 25 30 21 25 30 21 25 30 21 25 30 21 25 30 21 25 30

Propeller Flettner Air Bulbous bow Engine Hull shape Kites

retrofit rotors lubrication retrofit derating optimization
15
10
5
1
21 25 30 21 25 30 21 25 30 21 25 30 21 25 30 21 25 30 21 25 30

Auxiliary engine levers

Load Variable Lighting Shore Waste heat
optimization frequency drive systems power recovery system
15
10
5
1
21 25 30 21 25 30 21 25 30 21 25 30 21 25 30

¹Includes levers where there is no adoption.

McKinsey & Company

explain, these levers share deep interdependencies
that, when pulled, can activate the much-needed
velocity to reach the industry’s sustainability goals.
We’ll show how creating a decarbonization action
plan across all three levers can be a methodical
approach to achieving just that.
Fleet: Making ships more sustainable
As ship owners and operators look at their fleet for
opportunities to boost decarbonization, they could
consider three actions: hardware efficiency, analytics-
driven sailing optimization, and slow steaming. A
McKinsey study conducted in 2020 found that
around 70 percent of the world’s tankers and

4 Destination zero: An action plan for shipping CEOs

A decarbonization action plan checklist

A decarbonization action plan is an Fuel: Commercialization:

indicative, comprehensive decarbonization
trajectory to provide orientation for fleet
planning, fuel sourcing, and commercial-
ization over the next ten years and longer.
Here’s a checklist of questions for compa-
nies to answer as they plan.
Fleet:
— Which energy-savings devices and
other efficiency measures should
we adopt?
— Should we retrofit our existing vessels
for new fuels?
— What propulsion and fuel configuration
should our new builds adopt?
— Where can we find alternative fuel, and — What are our customers targeting in
how much will be available—by when their Scope 3 emissions?
and at what cost?
— What green shipping services can we
— What mix of fuel pathways best offer to meet our customers’ needs?
balance decarbonization, cost,
— What is the right price point for our
resilience, and other considerations?
green shipping services?
— What agreements should we strike to
— What enablers are required to unlock
secure supply at an attractive price?
“green demand” (for example, carbon
— How can we best manage a portfolio of accounting and transparency)?
diverse suppliers?
— How can our fleet deployment/
network change to adopt new fuels?

container fleets would fail in 2018 to meet the 2028
CII requirements. The IMO introduced these carbon-
intensity indicators as part of a data-collection system
to track and reduce vessel emissions.
However, as the CII trajectory beyond 2027 hasn’t
been formally agreed on and enforcement of the
regulations isn’t clear, some ship owners and
operators may be putting off the necessary efficiency
upgrades. While this may defer short-term costs,
these companies are also forfeiting the cost savings
generated. Typically, onboard adjustments have very
short payback periods of less than two years, so the
earlier they are made the greater the returns.
Hardware improvements are the most
straightforward way to boost efficiency. These
include technical modifications that are both
exterior—propeller improvement devices, bulbous
bows, and high-performance paints, for example—
and interior, including boilers, auxiliary-demand
reductions, and auxiliary-supply efficiencies. As an
example, a leading container line that made over
400 modifications to more than 150 vessels in its
fleet was able to reduce its fuel consumption by
8 percent. The benefits were so encouraging that
the company has started next-level conversations
with their suppliers and yard partners.
When new ships need to be added to existing fleets,
ship owners and operators could adopt a design-
to-value (DTV) approach and improve existing
procurement processes. DTV optimizes the vessel’s
lifetime value by removing unnecessary features
(which may include shaft generators) and adding
enhancements that make a clear positive business
and environmental impact, such as energy-monitoring
devices and premium paints. It also ensures that
the size and specs of the main and auxiliary engines

Destination zero: An action plan for shipping CEOs 5

 Reducing speeds by a knot could reduce
fuel consumption by between 10 and
15 percent, which could be a meaningful
strategy for older container ships.

are appropriate for the vessel’s function. This would
reduce cost while fulfilling the specifications that
are directly relevant to the operator.3
Analytics-driven sailing optimization is an
increasingly important lever for decarbonizing
in the short term. A number of variables need
to be managed to achieve optimal fuel burn and
carbon emissions, including weather and currents,
port berth availability, fuel price forecasts at
upcoming ports, and customer needs; optimization
algorithms are increasingly up to this task. The
question here is one of “build versus buy”: Does
a company gain a competitive advantage in
developing its own algorithms or benefit from
the wider data pool addressed by off-the-shelf
solutions? For example, a leading cruise line built
its own voyage-optimization algorithms in-house,
and then realized the value it held for others and
sold the solution to a major shipping supplier.
Meanwhile, digital “natives” such as ZeroNorth and
NAPA are proliferating, with solutions that learn
from ever-growing datasets.
Lastly, slow steaming may be another way for
ships to lower their carbon impact by sailing at
significantly slower speeds, which reduces fuel
consumption. Reducing speeds by a knot could
reduce fuel consumption by between 10 and
15 percent. This could be a meaningful strategy for
older container ships, which can remain in operation
without biofuels for an extra three to five years and
meet target CII scores. However, slow steaming may
be less relevant for bulk carriers, which are already
moving at very slow speeds.
Sometimes contracts with customers will need
to be rewritten to enable slow steaming: in the
pure car carrier (PCC) segment, automotive OEMs
historically demand fast sailing for inventory
management reasons but now have the opportunity
to reduce their Scope 3 supply chain emissions by
allowing their shipping partners to sail more slowly.
Moreover, if maintaining transport capacity is a
top priority, ship owners and operators should also
be aware that more vessels may be required to
compensate for the low speeds. This may potentially
result in higher shipping costs. In such cases, slow
steaming may not be a feasible strategy. There’s no
straightforward, “always right” answer to whether
companies should deploy this strategy.
Fuel: Designing a diversified
supplier portfolio
The type of fuel used by ships has a direct
impact on the industry’s carbon footprint. There
are numerous classes of clean (or cleaner) energy
sources, including biofuels and electrofuels
that are at different stages of maturity (see
sidebar “The challenging choice of future fuels”).

3
Buyers can also implement a rigorous procurement process to bring down the purchase price of new ships. For instance, procurement
decision makers can follow technical normalization to compare offers like for like, analyze their product’s cost structure to optimize design,
expand their supplier portfolio, and conduct transparent multiround negotiations that encourage competitive bids. A container line that
implemented such an approach managed to save $15 million in capital expenses and $5 million in operational expenses for one vessel.

6 Destination zero: An action plan for shipping CEOs

The challenging choice of future fuels
There are a number of alternative fuels in
focus for the shipping industry. Our work
in shipping, across segments, indicates
there is no one-size-fits-all answer, and
we expect to see many, if not all, of these
options adopted over the next 30 years:
— Liquefied natural gas (LNG). An
alternative fuel in shipping for decades,
LNG reduces CO2 emissions on a
“tank to wake” basis by approximately
20 percent. However, methane-slip
issues onboard the vessel and during
production (“well to wake”) are factors
that can increase LNG’s emissions,
potentially beyond the levels
associated with traditional fuel oil.
— Bio-methane/bio-LNG. Derived from
bio-feedstocks and leveraging existing
LNG infrastructure (for example,
storage, bunkering, and ships), it can
be used to displace fossil LNG but can
also face methane-slip issues and has
an unpromising cost-down potential
because the production processes are
relatively mature.
— E-methane. Derived from green
hydrogen and captured CO2 and
leveraging existing LNG infrastructure,
e-methane is more expensive than
either e-methanol or e-ammonia but
may also face methane-slip issues
during the combustion process,
especially in medium-speed four-
stroke engines. CO2 is still emitted
during combustion, but if sourced
from biogenic CO2 or direct air capture
(DAC), it is generally considered
“carbon neutral” on a life cycle basis.
— Biodiesel (HVO). A “drop in” fuel DAC, it is generally considered carbon
that burns in existing internal- neutral on a life cycle basis.
combustion engines (ICEs), biodiesel
— E-ammonia. Derived from green
can provide up to 50 to 90 percent
hydrogen and nitrogen pulled from the
decarbonization (depending on the
atmosphere, e-ammonia is a truly zero-
feedstock and production process),
carbon fuel and has the most attractive
faces potential bio-feedstock
costs of any of the “e-fuels” (plus an
constraints (which are also in demand
attractive cost-down trajectory as
for fuels in other sectors like aviation),
the costs of green hydrogen come
and has limited cost-down potential
down). However, ammonia is toxic, so
(because the production processes
leaks and safety are a major concern,
are relatively mature).
and an ammonia engine won’t be on
— Bio-methanol. Derived from bio- the market for another two to three
feedstocks, bio-methanol can be a years. Ammonia needs to be stored
carbon-neutral fuel (on a life cycle in refrigerated tanks which take away
basis). There are marine engines some cargo capacity. Combusting it
today that can burn methanol, and can create nitrous oxide (N2O), which is
it is liquid at room temperature, so a very potent greenhouse gas that can
it can be easily handled and stored be addressed with scrubbers.
(helping to counteract the cargo
— Green/blue hydrogen. Given its
capacity loss from its volumetric
disadvantaged volumetric energy
energy density, which is lower than
density, pure hydrogen—either
fuel oil). However, it has a limited
compressed or liquefied—will
cost-down potential due to relatively
probably only find a market in short-
mature production processes.
sea segments such as tugs, ferries,
— E-methanol. Derived from green offshore supply vessels, and potentially
hydrogen and captured CO2, cruise ships, possibly through the
e-methanol is more expensive than use of fuel cells (which have yet to be
bio-methanol today but will become stress-tested in a marine environment).
cheaper in the long run. It will always
— Nuclear. The closest thing to zero-
be more expensive than e-ammonia,
carbon shipping on the water today
as the latter is manufactured from
(in navies and the Russian ice-
nitrogen, which is abundantly available
breaking fleet), nuclear still has to
in the air, but it has an attractive
overcome environmental, regulatory,
cost-down trajectory (as the costs of
economic, and societal acceptance
green hydrogen come down). CO2 is
issues for it to be adopted at scale in
still emitted during combustion, but if
commercial shipping.
sourced from captured biogenic CO2 or
Destination zero: An action plan for shipping CEOs 7
 Shipping companies can actively plan for a
diversified sourcing funnel to support their
future clean-fuel needs. Decision makers could
move from seeing fuel procurement as purely
commodity purchasing to actively managing
a multisource, multiproduct, and multipartner
supply landscape.
Designing a supplier portfolio of different clean
and traditional fuels is the most effective way
of managing this added complexity. In the past,
shipping companies would rely on one or just a few
providers able to supply the fuel needed across
their fleets in major ports. Price was the determining
factor; companies were mostly concerned about
optimizing price by betting or hedging long-term
contracts against spot purchases.
Making the transition to alternative fuels, however,
requires a different tack. Many suppliers operate
locally and lack the vast supply networks of legacy
providers. They also don’t have long-established
track records and need strong supportive partners
(for instance, offtake agreements to make their
projects “bankable”). This means that shipping
companies will need to invest in and partner with
energy providers without guaranteed success. To
spread the risk, speed and diversification are key:
shipping companies will need to be prudent to
ensure that they have a wide array of alternative-
fuel suppliers and lock in supplies while they can.
Executives can make efforts to ensure that their
supplier portfolio is balanced across six dimensions:
technology readiness, CO2 abatement cost,
potential to build partnerships, regional distribution,
first-mover foothold, and supplier maturity
(Exhibit 1).
Right now, most companies still source their
energy needs from a handful of mostly fossil-fuel
suppliers. Diversifying supplier portfolios with
more clean-fuel providers opens up more options.
While alternative fuels may lag behind in maturity,
technology readiness, and cost, suppliers tend to
be more willing to partner with their customers to
pilot new innovations. This could open the way for
shipping customers to seize a first-mover foothold
and secure supply or even better fuel prices than
their competitors over the longer term. Clean

Web 2022
ShippingIndustryCarbonZero
Exhibit 1
Exhibit 3 of 4

Shipping companies may need to seek new features in fuel suppliers.

Illustrative example of how a supplier portfolio may take into account new buying factors
Technology readiness CO₂ abatement prices Favorability of
dimension
Favorable
Current approach Neutral
Unfavorable

Supplier maturity Potential to build partnerships

Possible future approach

First-mover foothold Regional distribution

McKinsey & Company

8 Destination zero: An action plan for shipping CEOs

 fuels can be manufactured in many more areas
globally compared with mature carbon-based fuels,
improving availability. Finally, as costs come down,
clean fuels can, in time, offer CO2 abatement costs
that are lower than paying any future carbon taxes.
Making the transition toward a more diversified
supplier portfolio may require shipping companies
to acquire several new capabilities. First, they need
more transparency on the supply and demand of
sustainable fuels. Trackers that monitor global
data—including announced commitments, published
sourcing deals, and new production projects—
may need to be built (or bought) so shipping
companies are constantly up to date with the latest
developments. Shipping companies could also set
up a “technology radar” to keep abreast of the most
recent cutting-edge innovations that affect the
supply or usage of sustainable fuels, including by
collaborating on research projects with universities
and partnering with VC accelerator networks to
screen potential solutions in the start-up space.
Shipping companies may also need to train up their
optimization and sourcing muscles. For procurement
decisions, a data-driven cost model is useful for
calculating the appropriate cost the company should
be paying for each fuel type, based on feedstock
sources, production pathways, scale advantages, fuel
hedging, and supplier margins. Live data for tracking
demand and supply should also factor into the
calculations. Meanwhile, a logistics calculator—which
takes into account the specific costs of blending and
distribution at the production site, as well as the costs
of bunkering and uplifting at the fueling location—
could help to optimize the cost of transporting the
fuel from source to tank.
Commercialization: How companies
can make a green margin
The third decarbonization lever is about making
the economics of sustainable shipping work. As
customers look to decarbonize their Scope 3 supply
chain emissions, they will increasingly differentiate
among shipping partners based on their emissions.
4
McKinsey Voice of Shipper Survey, based on results from 1,933 respondents in Canada, Germany, and the United States, April–May 2022.
An attendant green premium, depending on its
level, could also make such green offerings value-
accretive. Yet, while more than 85 percent of
shippers say that sustainability will significantly
affect their choice of logistics partners in the next
five years, their preferred choice of green products
and their willingness to pay differ.4
Shipping companies, therefore, can consider how
to tap into their understanding of their customers to
develop and offer relevant sustainable services at
an appropriate price. To do this they can break down
their customer base into strategic segments. The
starting point is to examine their customers’ Scope
3 decarbonization targets, and then to understand
the marginal abatement cost curves (MACCs) of
their customers’ Scope 3 emissions: How important
is shipping to their decarbonization ambitions,
at what cost relative to other sources of Scope
3 emissions, and in what time frame? Analysis of
these segments could then inform the creation
of differentiated green offerings that address
customer-specific decarbonization needs.
The portfolio of green offerings could comprise a
number of features, which are dependent on the
shipping company’s existing fleet and fuel choices.
There are three main categories: direct reduction
(when goods are physically shipped on dedicated
lower-carbon vessels); physical decoupling
(whereby a customer pays for fuels that improve a
fleet’s carbon footprint, even if their goods are not
moved onboard the vessels in which those fuels
are consumed, underpinned by “book and claim”
certificates); and carbon-neutral voyages (when
carbon offsets are used that support sustainability
projects but are not directly linked to the transport
value chain). Other features could include forward
sourcing for future cost reductions—for example, by
making advanced market commitments for green
shipping services.
Shipping companies may be able to promote
the uptake of sustainable shipping modes by
positioning greener shipping as a value generator
for shippers (Exhibit 2). Not only may shippers be
Destination zero: An action plan for shipping CEOs 9
 Web 2022
ShippingIndustryCarbonZero
Exhibit 2
Exhibit 4 of 4

Green products offer substantial value creation potential if not priced as

cost-plus.

Illustrative value-pricing waterfall for product¹

Base cost
Based on nongreen product cost
Shipper’s avoided fees
Potential carbon taxes and compliance-trading schemes avoided
Shipper’s price premium
Higher prices/margins for greener product achieved
Shipper’s market share gain
New, sustainability-focused end-customer groups attracted

Projected green product value

Cost to break even Green

for green product margin

¹Values would be in percent uplift (indexed).

McKinsey & Company

able to avoid potential carbon taxes, but they may
also attract new, sustainability-focused customers.
If shippers market and price their green products
astutely, they may not only be able recoup the
increased costs of decarbonized shipping but
should also be able to enjoy a green margin.
Emerging product-level carbon accounting and
labeling will be important enablers in this respect.
Creating a decarbonization action plan
The three areas set out in this article do not operate
independently from one another and so require a
systematic approach to spark a virtuous cycle in
which positive outcomes are mutually reinforcing.
For example, companies need to ensure that they
can secure a sufficient amount of sustainable
fuel to deliver the green products they’re offering
to their clients. A decarbonization action plan—
an indicative, comprehensive decarbonization
trajectory that provides orientation for fleet
planning, fuel sourcing, and commercialization
decisions over at least the next decade—serves as a
critical tool for shipping companies in this respect.
The decarbonization action plan consists of three
main components: ambition setting and baselining,
action planning, and execution and learning.
— Ambition setting and baselining. The company
defines its decarbonization trajectory, deciding
whether it will meet the minimal regulatory
compliance requirements or pursue more
ambitious targets. The baseline of each vessel’s
emission performance is taken, and calculations
are made to determine the emissions thresholds
to reach the target. Different combinations of
the fleet, fuel, and commercialization tasks
are modeled and evaluated based on cost,
complexity, and risks.
— Action planning. An integrated set of actions
across fleet, fuels, and commercialization is then
defined to meet the decarbonization ambition.

10 Destination zero: An action plan for shipping CEOs

 Find more content like this on the
McKinsey Insights App
Scan • Download • Personalize
On fleet, hardware upgrades are planned for
upcoming drydocks; new builds are planned to
adopt expected clean fuels; analytics solutions
are adopted; and contracts are reviewed and
amended to enable slow steaming (where
relevant). On fuels, clean-fuel needs are
compared with expected supply developments;
partnerships with producers and bunkering
providers are formed; and network strategies for
vessels consuming clean fuels are updated. On
commercialization, customers’ Scope 3 targets
and MACCs are analyzed and green products
are defined and A/B tested.
Crucially, action planning needs to be tested
against a range of scenarios, underlying
the inherent uncertainty in expected future
technology and fuel costs, policies and
regulation, and customers’ demands for green
shipping. It needs to be clear which actions are
considered no-regret moves across all scenarios
and what the company should do only under
certain scenarios.
— Execution and learning. As the tasks are
executed, the company will learn more
about how the market is developing, how
stakeholders’ needs are evolving, and what
works and doesn’t work. It’s important that the
company has a central “single source of truth”
for their decarbonization initiatives—usually a
decarbonization transformation office or nerve
center—so the company can rapidly adopt
learnings across the business.
Customers, regulators, shareholders, and other
stakeholders are stepping up the pressure for
shipping companies to decarbonize at a much
faster pace. Opportunities abound for companies
that take decisive action now. By making smart
fleet upgrades, savvy fuel-supplier choices, and
commercially beneficial arrangements, shipping
companies should not only be able to offset the risks
involved and propel the industry toward greater
sustainability, they could very likely also reap
significant returns in the process.

Susann Almasi is an associate partner in McKinsey’s Charlotte office, Martin Joerss is a senior partner in the Hamburg office,
Arjen Kersing is a senior expert in the Amsterdam office, Matt Stone is a partner in the London office, Benjamin Weber is an
associate partner in the Stuttgart office, and Apostolos Zampelas is an associate partner in the Athens office.

Designed by McKinsey Global Publishing

Copyright © 2022 McKinsey & Company. All rights reserved.

Destination zero: An action plan for shipping CEOs 11