Royal Caribbean Cruises Ltd. (NYSE: RCL) kicked off 2026 with strong financial results for 2025. The company’s success reflects a broader recovery and growth in the global cruise industry. Alongside financial gains, the industry faces growing scrutiny over environmental impact.
Cruise ships are highly carbon-intensive per passenger, prompting major lines—including Royal Caribbean, MSC, Carnival, and Norwegian Cruise Line—to invest in cleaner fuels, energy-efficient technologies, and shore power solutions.
This article looks at the cruise sector’s financial health, passenger growth, and environmental issues. It also discusses how companies are working to balance profits with sustainability.
Smooth Sailing: 2025 Profits and 2026 Outlook
Royal Caribbean Cruises had solid financial results in 2025 and a positive outlook for 2026. The company made nearly $18 billion in revenue in 2025, up from about $16.48 billion in 2024.
Net income also grew to about $4.27 billion, compared with roughly $2.88 billion the year before. Adjusted earnings per share (EPS) rose to $15.64, showing improved profitability.
The company also generated a strong operating cash flow of about $6.4–6.5 billion and returned around $2 billion to shareholders during the year. Record cruise bookings and higher ticket prices helped drive these results.
Royal Caribbean’s board expects double-digit revenue growth in 2026, along with higher capacity. Adjusted EPS is projected between $17.70 and $18.10. Around two-thirds of 2026 cruise capacity is already booked at strong pricing, supporting this forecast.
Jason Liberty, the company CEO, remarked:
“2025 was an outstanding year, and the momentum is further accelerating into 2026… and we continue to see strong and growing preference for our leading brands and differentiated vacation experiences. We expect another strong year of financial performance with both revenue and earnings growing double digits, and we remain on track to achieve our Perfecta goals by 2027.”
After the earnings call, the company’s stock climbed over 6%, mainly due to strong 2026 guidance.
These results show not only a recovery from pandemic lows but also sustained demand for cruises. Analysts expect this trend to continue as global travel and premium leisure spending grow.
Passenger Waves: Cruise Industry Expansion and Emissions
The global cruise industry is growing fast. Projections show over 38 million passengers by 2026, up from around 37.7 million in 2025. This growth follows strong momentum from 2024 and reflects overall travel trends.
Higher demand is encouraging cruise lines to add ships and expand routes. Royal Caribbean, for example, has ordered new Discovery Class vessels and is growing its river cruise segment with more ships planned through 2031. This shows long-term confidence in the market.
Carbon Wake: Cruise Emissions vs Other Travel
Cruising, however, has a higher environmental impact than many other types of travel. Cruise ships are among the most carbon-intensive forms of travel per passenger per distance traveled. This is because they need fuel not just to move but also to run cabins, restaurants, pools, and entertainment.
Even large, efficient cruise ships by Royal Caribbean emit around 250 grams of CO₂ per passenger-kilometer. That is higher than most long-haul flights or hotel stays. Onboard services and hotel-style energy use make cruises even more carbon-heavy.
For perspective:
- A five-night cruise of 1,200 miles produces about 1,100 pounds (≈500 kg) of CO₂ per passenger.
- A flight covering the same distance plus a hotel stay produces roughly 264 kg of CO₂ per person.
This means a cruise can generate about 2x the greenhouse gas emissions of an equivalent flight-and-hotel trip.
Trains and electric cars have much lower emissions per passenger. For example, traveling by national rail produces about 35 g CO₂ per kilometer, and international trains like Eurostar are even lower at 4.5 g CO₂ per kilometer.
Other comparison insights:
- Emissions per passenger-kilometer: Large cruise ships emit 0.43–0.65 kg CO₂, depending on occupancy and efficiency. Economy-class flights emit 0.15–0.20 kg, while high-speed rail is around 0.04 kg. Cruises can be 2–10x more carbon-intensive per passenger.
- Fuel and technology impact: Using LNG instead of heavy fuel oil reduces CO₂ by 20–25%, but methane slip and upstream emissions can reduce gains. Air lubrication and optimized routing can cut fuel use by 5–10% per voyage.
Ship engines burn huge amounts of fuel. Amenities like air conditioning, theaters, pools, and restaurants add to the energy demand. Cruises remain a luxurious experience, but travelers should know that they usually have a higher carbon footprint than flights, plus hotels or land-based travel. This shows that while cruises are luxurious and convenient, they have a much higher carbon footprint than most other ways of traveling.
Cruise ships also emit sulfur oxides (SOx), nitrogen oxides (NOx), and fine particles, which can harm air quality in port cities and marine ecosystems. Many passengers also fly to and from cruise ports, adding more carbon emissions that are often not included in cruise footprint estimates.
How Cruise Lines Are Addressing Environmental Impact
Cruise companies, including Royal Caribbean, are working to reduce their environmental impact. Many aim to reach net-zero greenhouse gas emissions by 2050 or earlier.
Royal Caribbean’s Destination Net Zero strategy focuses on:
- Alternative fuels: LNG-powered ships, biofuels, and fuel cell technology.
- New ship technologies: Advanced hulls, air lubrication systems, and shore power connections.
- Operational efficiency: Optimized routes and engine improvements to reduce fuel use per passenger.
Other cruise lines are also taking action to tackle their environmental footprint:
MSC Cruises used efficiency tools and smart itinerary planning to cut 50,000 tonnes of CO₂ in 2024. They are testing hybrid propulsion and shore power at multiple ports. Carnival Corporation is expanding LNG and biofuel use while increasing shore-side electrical connections. They are also researching carbon capture for ships.
Likewise, Norwegian Cruise Line (NCL) is adding LNG-powered ships, battery-assisted propulsion, and energy-efficient onboard systems. NCL is also expanding shore power at ports.
Disney Cruise Line uses hybrid exhaust gas cleaning, advanced wastewater treatment, and fuel-efficient hulls while eliminating single-use plastics onboard. Meanwhile, Princess Cruises applies energy-saving tech, waste reduction, and wastewater treatment, while testing LNG as a fuel alternative.
Overall, the cruise industry faces pressure to reduce carbon intensity. Cleaner fuels, new technologies, and operational efficiency are becoming standard. Environmental responsibility is now a key part of long-term business strategy.
Forecast Horizon: Growth, Finance, and Green Goals
Royal Caribbean and the cruise industry are financially strong. High bookings, growing revenue, and positive forecasts show that demand for cruises is rising. Investments in new ships and offerings aim to meet demand across different traveler groups.
Cruise forecasts show over 38 million passengers by 2026, highlighting ongoing interest. Electric and hybrid propulsion, shore power, biofuels, and fuel-saving technologies are slowly becoming standard.
Challenges remain. Reducing cruise carbon intensity to levels similar to other travel modes will require more alternative fuels, stricter rules, and continued innovation.
Still, many cruise lines have pledged net-zero targets, often aligned with global shipping goals. Passengers are also more aware of environmental impact, driving demand for greener cruises.
Balancing Growth and Emissions
Royal Caribbean’s strong earnings and positive outlook show a resilient and growing industry. Record bookings and strategic investments indicate financial health and long-term growth.
However, carbon emissions remain a major issue. Cruises generally produce more CO₂ per passenger than many other vacations. Cruising is also considered to emit the most emissions compared to other travel methods. Thus, the industry faces pressure to reduce this impact.
Understanding both the financial and environmental sides can help travelers make better choices. For cruise companies and policymakers, balancing growth with emissions reductions is key for the future of cruising.
The post Royal Caribbean’s (RCL) Record 2025 Profits Meet Carbon Challenges of the Cruise Industry appeared first on Carbon Credits.
Insetting program design starts with your supplier map. The carbon claim comes much later.
Consider a coffee procurement team that funds a farm intervention before checking its sourcing data. The supplier aggregates coffee lots from several regions. The buyer lacks farm-level traceability. Another purchaser expects to report the same outcome. A more attractive project brochure solves none of these problems.
If the distinction between a value-chain intervention and a purchased credit is still open, read CCC’s Insetting vs Offsetting guide before you set the brief.
Insetting program design begins with the purchasing relationship and works outward. You need to decide 1) where an intervention belongs, 2) what business problem it addresses, 3) who pays for it, 4) how results will be measured, and 5) what the evidence will let you say about them. This five-step playbook turns that sequence into a procurement plan.
Step 1: Insetting program design starts with supplier mapping
Start with the commodities that matter most to your Scope 3 inventory and sourcing continuity. Ask finance for spend by supplier, sustainability for the emissions baseline, and category managers for origin and volume records. Then identify which suppliers can trace material to a jurisdiction, sourcing region, producer group, or individual land-management unit.
The level of traceability affects what you can account for. Under the GHG Protocol Land Sector and Removals Standard, the spatial boundary for purchased land-based products depends on the traceability associated with each volume. Farm-specific factors or removals require physical traceability through an acceptable chain-of-custody model. A contract with a tier-one trader, by itself, does not establish a link to the farms behind its deliveries.[1]
Build a first-pass table with five columns: commodity and annual volume; supplier and origin; current traceability level; land-use and production risks; and the business owner who can change the purchasing terms. Mark missing data plainly. A blank cell is cheaper to fix before a program starts than after a claim is drafted.
If your company sets an SBTi Forest, Land and Agriculture target (FLAG), keep its land-related target boundary separate from energy and industry emissions. The current FLAG guidance also requires relevant companies to assess primary deforestation-linked commodities in their value chains.[2]
Step 2: Choose a commodity and jurisdiction for a pilot
Select one supply corridor where the sourcing connection can be established and procurement has a reason to stay. A useful pilot has repeat purchases, suppliers willing to share records, an intervention matched to a diagnosed problem, and a defined plan to measure the result. Carbon potential alone is a poor selection rule if the supplier cannot deliver the crop your business needs.
Compare candidate regions on land-use risk, supplier concentration, local rights and tenure, the availability of baseline data, and exposure to drought, erosion, or forest conversion. Check the relevant legal requirements separately. A nature project does not satisfy a due-diligence obligation merely because it has a carbon method attached.
Consider a coffee buyer sourcing from two districts. In the first, producer-group records identify the farms, while recent dry seasons have increased rejected green coffee lots. In the second, deliveries pass through several intermediaries and farm origins are unknown. Pilot shade management in the first district, with local agronomic advice and quality checks built into the plan. The buyer can trace purchases there and test the intervention against a defined sourcing problem.
Use a short decision memo to record why the selected corridor beats the alternatives, what remains uncertain, and what would stop the pilot. That memo is the first control against a project drifting toward whatever happens to photograph well.
Step 3: Design the supplier engagement and commercial model
The intervention needs an owner on each side of the contract. Decide who supplies planting material or training, who maintains the practice, who bears the cost if a harvest disappoints, and how long the buyer expects to purchase from participating suppliers. Where smallholders participate, budget cash flow and technical support for practices that offer a later return.
Put these terms in a supplier agreement or pilot addendum. It should cover eligible farms and volumes, consent to data collection, access for monitoring, any land or carbon rights that matter, benefit sharing, and what happens if the purchasing relationship ends. Ask local counsel and producer representatives to review the arrangement. The Accountability Framework is a useful reference for supply-chain work involving forests, ecosystems, and human rights.[3]
Avoid assigning an automatic carbon benefit to the buyer. The contract should say which party has the right to report each outcome, how overlapping claims will be checked, and how any issued credits will be handled. A reduction reported in a buyer’s inventory cannot simply be sold for someone else’s offset claim without an accounting review. SBTi FLAG guidance excludes purchased credits used as offsets from near-term FLAG target achievement.[2]
Set commercial measures beside environmental ones: delivered volume, rejection rate, supplier retention, and procurement cost. They tell you whether the program works as a supply-chain investment, even if carbon accounting takes longer to resolve.
Step 4: Build monitoring, reporting, and verification before rollout
Agree on the baseline and data flow before paying for a full rollout. Identify the land units or sourcing regions in scope, the practices that change, the records suppliers already keep, and the additional measurements the program requires. Decide which data can come from field visits, transaction records, or remote sensing, and who checks each source.
For carbon, separate three questions. Did the practice happen? Did emissions or removals change under an applicable method? Can the buyer attribute a defensible share to its purchased goods without double counting? The GHG Protocol’s 2026 guidance includes dedicated chapters on spatial boundaries, data and methods, evaluating actions, credited outcomes, and assurance.[1] These are distinct jobs. A photograph of a planted tree answers only part of the first.
CCC’s MRV and Additionality article explains the separate evidence questions a project reviewer will ask.
Create an evidence file for every reporting period: dated supplier and farm records, purchase volumes, methods and emission factors, uncertainty, quality checks, and changes from the baseline. Specify who can challenge the data and how corrections are recorded. If a project also seeks credit certification, keep project accounting and corporate inventory accounting separate. The GHG Protocol says its land standard focuses on entity-level inventories and does not set the rules for credit certification.[4]
Start with the minimum viable measurement design that can survive review. Add complexity when the pilot tells you which data actually changes a decision.
Step 5: Decide what can be reported and claimed
Insetting program design needs reporting rules before the marketing copy. Procurement, sustainability, finance, and legal should agree on four distinct outputs: operational performance; observed land or nature outcomes; inventory effects, if the accounting criteria are met; and any separately issued credits. One dashboard can display them, but they should not share a single unqualified headline.
SBTi FLAG guidance allows certain land-based removals within a company’s operations or supply chain to contribute to FLAG pathways, subject to criteria including permanence, traceability, data quality, and allocation. It does not allow purchased offsets to meet near-term FLAG targets.[2] Eligibility therefore depends on evidence and the applicable target rules, not on calling an activity “insetting.”
Draft a claims register. For each proposed sentence, record the period, boundary, data owner, calculation method, reviewer, and whether the result is measured, estimated, or still a goal. If the evidence supports only “we funded a pilot with 200 farms,” say that. Do not turn a funding fact into a verified emissions reduction.
What good looks like by year three
Treat year three as a review point, not a promised payback date. A mature pilot should have mapped participating supply volumes, a stable supplier agreement, a repeatable data collection process, and a comparison of commercial and environmental results against the baseline. It should also have a documented answer for outcomes that cannot be included in the buyer’s inventory.
Scale only where the pilot improves a sourcing decision and the evidence can follow the product. If neither condition holds, redesign the intervention or change the corridor. A disciplined program can conclude that a site is unsuitable. That is useful procurement intelligence.
Discuss your insetting program with CCC
Carbon Credit Capital designs nature-based supply chain investments around sourcing needs and measurable sustainability outcomes. Schedule a consultation with our carbon and sustainability experts to map your tier-one supplier network, FLAG exposure, and first pilot decision.
Sources
[1] GHG Protocol, Land Sector and Removals Standard, version 1.1, and companion Guidance, June 2026: https://ghgprotocol.org/land-sector-and-removals-standard ; https://ghgprotocol.org/land-sector-and-removals-guidance
[2] Science Based Targets initiative, Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, especially pp. 16–17, 37, and 41: https://sciencebasedtargets.org/resources/files/SBTiFLAGGuidance.pdf
[3] Accountability Framework initiative, Accountability Framework and guidance for companies: https://accountability-framework.org/
[4] GHG Protocol, Frequently Asked Questions: Land Sector and Removals Standard, questions 10 and 18: https://ghgprotocol.org/blog/frequently-asked-questions-land-sector-and-removals-lsr-standard
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
