The recent surge in new ship orders, with over 600 vessels ordered in the past year, presents a significant opportunity to advance the maritime industry’s decarbonization goals. These new vessels, many of which are designed to utilize alternative fuels, will play a crucial role in reducing greenhouse gas emissions from shipping, according to Lloyd’s Register.
Continued Investment
Despite challenges, the shipping industry continued to invest in decarbonization efforts in 2024. Orders for vessels capable of using alternative fuels surged, increasing the orderbook by over 50%. This brings the total number of such vessels on order to 1,737, representing around 4.8% of the global fleet.
While these figures demonstrate significant progress, achieving the IMO’s 2030 target of 5-10% of shipping energy from zero and near-zero emission sources requires a significant acceleration in orders. Methanol-fueled vessels led the way in terms of new orders, with 119 vessels added to the orderbook. LR, a leading classification society, has been actively supporting the industry’s transition to alternative fuels, including by classing the first methanol-fueled vessel and partnering with Green Marine to provide training and consultancy on methanol operations.
To meet the IMO’s ambitious decarbonization targets, the industry will need to further accelerate the adoption of alternative fuels, requiring greater alignment between industry ambitions, regulatory measures, and the development of robust infrastructure for alternative fuel production and distribution.
Advances In Ammonia
LR’s involvement in numerous projects related to ammonia production, storage, and utilization underscores the growing significance of this fuel in the maritime sector. These projects included approvals for offshore production technologies, fuel supply systems, and novel power concepts.
Hydrogen also continued to gain traction, with 12 new vessel orders placed in 2024. LR is actively involved in this sector, including classing two hydrogen-powered ferries for Torghatten Nord and collaborating with industry partners on a green hydrogen infrastructure project in the UK.
LNG remained a dominant alternative fuel in 2024, with more than 350 vessels ordered. Efforts to reduce methane slip from LNG operations are ongoing, with LR’s MAMII initiative playing a crucial role in driving innovation and collaboration in this area. LPG also showed promising potential as an alternative fuel, with ongoing efforts to expand its use beyond LPG carriers. Factors such as competitive pricing in certain regions, mature infrastructure, and the development of renewable LPG sources are driving this growth.
Scaling Up Production
The widespread adoption of alternative fuels in the maritime sector requires significant scaling up of production and supply infrastructure. Currently, core production elements for biomass-derived fuels and e-fuels are primarily confined to isolated projects.
To encourage investment in alternative fuel production, governments need to create a stable and attractive market environment. This includes mitigating risks for investors in countries with lower credit ratings, as many suitable locations for renewable energy production are situated in such regions.
The Maritime Fuel Supply Dialogues, an initiative launched by Lloyd’s Register, aims to address this challenge by fostering collaboration between energy and transport ministries across the Asia Pacific and African regions. This platform facilitates discussions on how to drive regional fuel supply development to support maritime decarbonization efforts.
Furthermore, coordinated action is crucial to ensure the availability of zero- or near-zero emission shipping services for early adopters. A recent tender conducted by MDH and ZEMBA, involving 50+ shipowners and fuel suppliers, suggests that commercial e-fuel deployment in the maritime sector is feasible starting from late 2026, with more widespread adoption expected in 2027 and 2028.
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Source: Lloyd’s Register
