NYK Group Charts Multi-Fuel Path To Decarbonization With LNG

Japan’s NYK Group, one of the world’s largest shipping conglomerates, is adopting a phased approach to reduce greenhouse gas emissions by transitioning from oil-based fuels to alternative marine fuels.

With an ambitious target to cut emissions by 45% by 2030 and reach net-zero by 2050, NYK is investing heavily in dual-fuel vessels, biofuels, and ammonia-capable ships. The company is also working closely with Japan’s energy sector to secure cleaner fuel supplies and manage regulatory compliance under evolving international carbon policies.

LNG as the Bridge Fuel in NYK’s Decarbonization Strategy

NYK currently consumes about 3.3 million metric tons of conventional bunker fuel annually. To begin reducing this footprint, the company is prioritizing liquefied natural gas (LNG) as a transitional marine fuel. LNG offers up to 30% lower GHG emissions compared to traditional fuels and is already in use across NYK’s growing fleet of dual-fuel vessels.

As of March 2024, NYK operated 30 LNG-capable ships and expects to increase this number to 102 by 2029. LNG consumption surged to 41,530 mt in FY 2023-24, reflecting this strategic fleet expansion. The company is also deploying LNG-powered vessels to Europe, where emission regulations under the EU ETS make low-carbon fuel options more cost-effective.

Exploring Bio-LNG, Methanol, and Ammonia for Deeper Cuts

Beyond LNG, NYK is experimenting with bio-LNG, particularly on car carriers operating in Europe. Though more expensive than fossil fuels, bio-LNG offers zero compliance costs under the EU ETS, making it an attractive option for reducing carbon costs. The group also consumed 6,287 mt of bio bunkers in FY 2023-24 and is considering scaling up B30 biofuel use in Singapore.

NYK is also exploring methanol and LPG as marine fuel options. In a pioneering move, the group launched the world’s first ammonia-capable tugboat and is developing a 40,000 cu m ammonia-fueled gas carrier in partnership with Yara, scheduled for delivery in 2026. The company plans to order more ammonia-ready ships between 2028 and 2029, anticipating green ammonia’s role in deep-sea decarbonization by 2050.

Long-Term Supply and Collaboration with Japanese Utilities

NYK is working closely with Japanese power utilities, which have stable LNG imports for power generation, to source LNG for its growing dual-fuel fleet. This collaboration could provide surplus LNG for marine use, helping stabilize supply for NYK’s expanding operations. Given the unpredictable pace of green fuel availability, such partnerships are essential for smooth fuel transitions.

However, the company remains cautious about signing long-term procurement contracts with fuel producers, citing financial risks. While open to the idea, NYK prefers flexibility over fixed long-term deals at this stage of the market’s evolution.

Operational Strategy and Bunker Logistics

NYK’s diverse fleet—including containerships, car carriers, cruise ships, and dry bulkers—offers flexibility in bunker planning. Ships with fixed trade routes or long-term charters are easier to fuel with alternative options due to predictable schedules and ports of call. This helps bunker suppliers invest and plan around regular demand, ensuring more reliable fuel access.

However, as no single fuel type is expected to dominate the shipping sector, NYK is taking a multi-fuel approach to hedge against future uncertainty. This strategy includes gradual retrofits and focusing on new builds that are future-ready, instead of rushing a full fleet conversion which may not be feasible due to 20-year ship lifespans.

NYK’s strategic shift toward a multi-fuel fleet—starting with LNG and progressing toward biofuels and ammonia—demonstrates a balanced, long-term approach to maritime decarbonization. By combining technological adaptation, fuel diversification, and regulatory compliance, NYK is navigating the complex transition toward net-zero shipping. Though challenges remain in fuel availability and procurement, its phased strategy ensures resilience and readiness for a greener future.