Though we all depend on it, most of us know little about shipping (or trucking or aviation, for that matter), including its dirty little secret: The fuels that propel ships across the oceans are among the most polluting ones around, responsible for about 3% of global greenhouse gas emissions. To achieve our emissions objectives, achieving a greener way of transporting bulk goods is essential. So how do we get there?

This summer, one answer will come from that Maersk ship’s maiden voyage, powered by green methanol produced by OCI, a Dutch fuel producer, at a site in Beaumont, Texas.

The pioneering project matters, OCI CEO Ahmed El-Hoshy told me, because the green methanol the ship runs on emits about two-thirds less in greenhouse gases than the fuels typically used in shipping. The bio-methanol OCI provides, made with bio-gas from waste, is also cleaner than traditional methanol, whose production from natural gas emits significant amounts of CO2.

Maersk’s methanol-powered ship is a big step forward. But it’s just one ship among millions. “It’s us and Maersk dipping our toes,” El-Hoshy said.

If the shipping and transport industries ever want to get to “net zero” or even “absolute zero” carbon emissions, many more ships will have to roll off the world’s shipyards and green methanol will need to be replaced by an even cleaner fuel. But those objectives so far remain elusive, El-Hoshy admitted. And in a way, all market participants and overseers are to blame. Shipping customers are tepid to demand clean transport, and governments are slow to provide carrots and sticks for the industry.

Demand has changed little: 80% of global orders for new ships today are for fossil-fueled ships, El-Hoshy said. With an average lifespan of several decades, ships for the most part will continue to be heavily polluting long into the future. And as long as demand doesn’t change, supply won’t either, he said.

The same is true for clean fuels like green methanol and even more so ammonia, which El-Hoshy calls the “holy grail” for heavy-duty transport. Unlike methanol, ammonia can be made fully carbon-free, in a production process that involves hydrogen. But if green methanol is already pricey, ammonia is even more so, and the first engines that run on it aren’t expected until 2026. Widespread adoption is even further off.

I heard similar remarks from executives from the hydrogen industry, who joined me in a Vivatech panel on hydrogen in Paris earlier this week. European companies like EDF (Electricité de France), Hydrogenious, and Air Liquide are all bullish on what hydrogen-enabled methanol and ammonia can do for shipping and other heavy-duty transport like trucks, planes, and buses. For the nascent green transport industry to take off at scale, buyers and governments will need to give the industry a bigger push, they said.

The decarbonization of shipping and trucking need not be viewed as a chicken-and-egg problem, though. Ignacio Galan, executive chairman of Iberdrola, the world’s largest producer of renewable energy, is a proponent of the “build it and they will come” approach. Iberdrola already operates Europe’s largest hydrogen plant. For it and other types of clean fuels to be more successful going forward, he says, “It’s not only about price. It’s also about reliability and availability.” It’s not just about dipping your toe, he says, but going all-in.

More news below.

Peter Vanham
Executive Editor, Fortune
peter.vanham@fortune.com

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This edition of Impact Report was edited by Holly Ojalvo.

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Is ESG dead? Not for MasterCard

CSOs are increasingly hesitant to publicly defend the use of the term “ESG,” I wrote last week. But Ellen Jackowski, the chief sustainability officer of MasterCard, begs to differ. MasterCard just now released its first-ever “ESG report,” combining what used to be separate sustainability and DEI reports.

The ESG report “is what it is,” Jackowski told me from Istanbul, where she was attending the UEFA Champions League final. “We did some benchmarking, and this is the best-known term, and the one others are using. In my mind, [the terminology] should not be the conversation.”

Fair enough. When I looked into the matter, I found that when it comes to reporting, the Fortune 20—the 20 largest companies in America by revenue—are indeed split evenly between releasing “sustainability” and “ESG” reports, amid recent political backlash.

Jackowski also highlighted two key MasterCard initiatives that are moving forward: the company’s sustained efforts to support 25 million women in their business and a drive to get all card issuers to take on the company’s carbon calculator, for customers to use to calculate the carbon footprint of their consumption.

Academic freedom in ESG research is under threat (FT)

Are ESG data providers suppressing academic research? Yes, claims Ben Caldecott, sustainable finance professor at Oxford University in a Financial Times op-ed this week. “Some of the world’s best financial institutions...have sought to undermine academic freedom,” he writes. “They have done this by trying to change the results of [ESG] research before publication, or have attempted to prevent it from being published at all, to protect their products and services.”

I reached out to Caldecott to get more details on those explosive claims—which are astonishing if true—but when I asked if he could provide me examples of this corporate influence over ESG research, he declined to name companies, citing legal risks. My take: If the legal risks can be mitigated, the names of those involved should come to light, because allegations without specifics throw shade over an entire industry. That is not the best way to help the cause, either.