The price of cleaning the fuel that moves global shipping
When a shipping line announces a new surcharge on your freight quote, it rarely comes with an explanation. It appears as one more line item, BAF, EFS, Low Sulphur Surcharge and whoever is buying freight generally absorbs it without fully understanding what generated it. The answer almost always traces back to the same origin: an environmental regulation that someone has to pay for, and that someone ends up being the supply chain.
The breaking point was 2020
IMO 2020 established a maximum sulfur content of 0.5% in marine fuels, replacing the previous 3.5% limit. The change forced shipping lines to switch to cleaner and considerably more expensive fuels, or install scrubber systems on their vessels. The result was immediate: freight costs tied to fuel surcharges increased between 15% and 30% across the shipping industry.
That was the first visible adjustment for anyone buying ocean freight. It wouldn't be the last.
2026: geopolitics amplifies the shipping cost equation
With the closure of the Strait of Hormuz in March, the marine fuel market faced pressure no regulation had anticipated. Bunker prices nearly doubled, and shipping carriers began introducing additional emergency surcharges across global freight lanes. On March 9, Hapag-Lloyd notified an Emergency Fuel Surcharge applicable to all trade lanes: $160 per TEU on long-haul freight routes and $70 per TEU on intra-regional shipping.
The Bunker Adjustment Factor can add between 5% and 15% to the base cost of a freight shipment under normal conditions. In a volatility scenario like this year's, that range widens and emergency charges appear that weren't in anyone's freight budget.
The next shipping cost adjustment is already on its way
What's coming is more structural than any geopolitical crisis. The IMO Net-Zero Framework, adopted in April 2025, establishes mandatory emissions limits and a pricing mechanism on the GHG ships emit, the first-ever global carbon price for international shipping.
The transition demands radically different fuels, and none of them are cheap. Green ammonia, frequently described as the cornerstone fuel for maritime shipping decarbonization, is projected to cost between $885 and $1,050 per ton, roughly two to four times the price of very low sulfur fuel oil currently used across global freight routes. Bio-methanol and e-methanol are projected to be 469% and 626% more expensive than conventional marine fuel, respectively.
LNG will remain the cheapest compliance option for shipping until the mid-2030s, after which ammonia dual-fuel vessels emerge as the lowest-cost freight pathway. That means the industry is facing at least a decade of costly transition and those costs are not going to stay on the shipping lines' balance sheets.
What this means for anyone buying freight
Even if freight shippers don't handle IMO compliance directly, carriers may pass part of those costs into ocean freight rates, whether as a carbon surcharge, a fuel adjustment, or a broader shipping compliance charge.
The pattern is already familiar: every time marine fuel gets more expensive, whether through regulation or geopolitics the shipping market finds a way to redistribute that cost to whoever is moving freight. The question for companies that depend on ocean freight isn't whether they'll pay for shipping's decarbonization. It's when, how much, and what name it will show up under on the next quote.