Carbon pricing, regulation and cheap operations.

For inland and short sea shipping, full electrification will just be a lot simpler and cheaper. There's already a pair of 700 unit container ships traveling 1,000 km routes on the Yangtze with swappable containers of batteries.

That's part of China's regulated goal to decarbonize all inland shipping — and 50% of the world's inland shipping occurs in China — in the next couple of decades. China also has a carbon price, albeit low and not covering very many industries yet. Both of those things are going to change.

The EU's carbon border adjustment mechanism goes fiscally live in 2026 and will include all greenhouse gases. While the massive success of deployment of renewables and electrification of their economy has caused a temporary dip in the ETS price, their policy statement is clear. They are going to align the price per ton with the social cost of carbon.

That will mean any inland or short sea ships in Europe will be strong incented to electrify and bunkering will become more costly for fossil derived fuels for all ships that bunker in Europe. Further, shipping emissions will end up counted in the CBAM.

The largest exporter is cleaning up its shipping. The second largest importer is mandating cleaning up shipping. The International Maritime Organization is aligning regulations on decarbonization globally.