Imagine your business facing sanctions out of nowhere, even when you're following the rules. That's the reality for Japan's MOL, one of the world's largest shipping companies, as it navigates the turbulent waters of geopolitics and decarbonization. In a recent interview with Platts, Takeshi Hashimoto, MOL's president and CEO, revealed the immense challenges the company faces in its LNG shipping business and its ambitious journey toward net-zero emissions.
The EU threw a curveball in May 2025 by sanctioning three of MOL's LNG tankers for allegedly supporting Russia's energy trade. But here's where it gets controversial... These sanctions targeted ships carrying Yamal LNG, a project not sanctioned by the EU at the time! Hashimoto voiced his frustration, stating, "Our vessels were suddenly designated as subject to sanctions, despite the fact that the vessels were carrying Yamal cargo that is not sanctioned by the EU." He further emphasized the apparent double standard: "Other shipping companies transporting the same Yamal cargo have not been sanctioned. This is what we thought [was] unfair ..." These sanctions were later lifted in July after MOL made 'firm commitments' that the sanctioned vessels would not be used to transport cargoes from the Yamal and Arctic LNG 2 projects.
This incident highlights a critical issue: the inconsistent application of sanctions can disrupt international shipping and global trade. Hashimoto pointed out that while the EU might find it acceptable to import Yamal LNG due to its own energy needs, Asia also relies on Russian LNG. As he stated, "Asia also currently has demand and needs LNG from Russia."
MOL's involvement with Russian LNG projects is significant. The company operates over 100 LNG tankers, with seven dedicated to transporting Yamal LNG, including three icebreaking ships designed for the harsh Arctic conditions. They also have a tanker shipping from the Sakhalin 2 project. However, Hashimoto made it clear that pursuing further shipping deals with Russian LNG projects is "out of the question" until the Russia-Ukraine war reaches a resolution and the sanction landscape becomes clearer.
Currently, Russia's LNG exports are substantial, reaching 26.1 million metric tons this year. A significant portion, 12 million mt, goes to EU countries, while 6.3 million mt goes to China, 4.9 million mt to Japan, and the remainder to other Asian nations. And this is the part most people miss... The EU plans to halt Russian LNG imports by 2027, potentially leaving Japan as the only G7 nation still purchasing LNG from Russia. If Japan were to align with the West and cease Russian LNG imports, MOL could explore shipping opportunities to China without violating sanctions. However, Hashimoto emphasized that MOL wants to avoid becoming part of the "shadow fleet" that transports sanctioned energy.
The second major challenge for MOL is decarbonization. After the International Maritime Organisation (IMO) delayed the adoption of its Net-Zero Framework (NZF), MOL faces increased hurdles in achieving its goal of net-zero emissions by 2050. The US, a vocal opponent of the NZF, has even threatened sanctions and port fees against its supporters, effectively delaying its implementation from 2028. This external pressure adds another layer of complexity to MOL's decarbonization efforts. Hashimoto candidly admitted, "As of today, commercially, economically and also technically and politically it seems to me not so easy to increase the number of zero-emission vessels." He stressed the need for "international regulatory assistance" to accelerate the transition.
MOL's fleet, one of the world's largest with over 900 vessels, consumes a massive 3-3.5 million mt of oil equivalent in marine fuels annually. Currently, conventional oil-based fuels dominate its bunker mix. While the company is making strides in adopting alternative fuels, the transition is gradual. In fiscal year 2024-25, LNG accounted for 73,000 mt and biofuels for 20,000 mt of MOL's fuel consumption.
Beyond its existing LNG tankers, MOL is investing in a fleet of at least 42 ships capable of running on LNG (15 already in service) and seven methanol-capable ships (five in service). By 2030, the company aims to have 90 ships capable of operating on LNG or methanol, which could reduce Scope 1 and 2 GHG emissions by 23% from 2019 levels. While MOL anticipates having 130-150 ships powered by alternative fuels in the coming years, Hashimoto acknowledged that this would still represent a "minority percentage" of the total fleet.
Looking ahead, MOL has set ambitious targets for reducing GHG intensity. By 2035, the company aims for a 45% reduction in Scope 1, 2, and 3 GHG intensity from 2019 levels and plans to operate 130 net-zero-emission ships, likely powered by ammonia. The company has already contracted for five such vessels. "After 2030, our plan is to dramatically increase their number," Hashimoto stated.
However, the economic realities of sustainable marine fuels pose a significant challenge. "If it will not economically make sense, we can do it for 10 vessels. But we cannot do it for 100," Hashimoto conceded. Sustainable fuels are significantly more expensive than conventional fuels, and passing these costs on to customers is difficult. Regulations like the IMO's NZF, designed to internalize the cost of maritime GHG emissions, are crucial for promoting their adoption.
Consider the price differences: In October, the average delivered bunker price for 0.5% sulfur fuel oil in Singapore was $11.17/Gigajoule, compared to $13.77/Gj for LNG and a staggering $46.66/Gj for 100% sustainable methanol. Renewable ammonia cargo prices for delivery to East Asia were $44.07/Gj. While Hashimoto noted that "quite many customers are willing to accept LNG bunker," he emphasized that maximizing the utilization of ammonia and methanol requires more than just customer cooperation. "We definitely need the global framework, or a tax regulation," he concluded.
So, here's the big question: Should international bodies impose stricter regulations and taxes to encourage the transition to sustainable marine fuels, even if it means increased costs for shipping companies and potentially higher prices for consumers? Or should the industry rely on voluntary adoption and technological advancements to drive decarbonization? What level of geopolitical interference is acceptable when it comes to sanctions and their impact on global trade and energy security? Share your thoughts in the comments below!
