Marine cargo carriers are scrambling to prepare for "IMO 2020," a set of new environmental regulations that kick in Jan. 1. The regulations, issued by the International Maritime Organization (IMO), are designed to curb pollution by banning ships from using fuel with a sulfur content higher than 0.5%. That's down from the previous limit of 3.5%, which was established in 2012.

Low-sulfur fuel is more expensive than the traditional, sludgy "bunker" fuel, however, so container carriers are looking for green alternatives. Now, Danish shipping giant A.P. Møller - Maersk thinks it may have found a winning mix in an unlikely place—a waste byproduct of pulp and paper mills that is usually burned to produce steam and electricity.

Maersk is exploring the use of LEO, a blend of ethanol, the plant-based gasoline substitute, and lignin, a structural bio-polymer that contributes to the rigidity of plants. The company says that lignin is easy to find; it is isolated in large quantities as a byproduct in paper factories.

To explore LEO's potential as a maritime fuel, Maersk has teamed up with the Norwegian/Swedish shipping company Wallenius Wilhelmsen Logistics to collaborate with Copenhagen University and major customers including BMW Group, H&M Group, Levi Strauss & Co., and Marks & Spencer.

The resulting LEO Coalition plans to explore the environmental and commercial viability of using the new fuel for containerships. "Shipping requires bespoke low-carbon fuel solutions [that] can make the leap from the laboratory to the global shipping fleet. Initiatives such as the LEO Coalition are an important catalyst in this process," recently departed Maersk Chief Operating Officer Søren Toft said in a release.