The significant increase in orders for alternative-fueled vessels in 2024, as highlighted by DNV’s Alternative Fuels Insights platform, clearly demonstrates the maritime industry’s accelerating efforts to decarbonize. This surge in orders signifies a crucial step towards a more sustainable future for shipping, reports Baltic Exchange.
Primary Factors
Container and car carrier sectors were the primary drivers of the surge in alternative fuel orders, accounting for 62% of the total. In 2024, a remarkable 69% of all container ship orders were for vessels capable of operating on alternative fuels.
While LNG remained a popular choice, with 67% of container ships opting for this fuel, the industry demonstrated a growing appetite for diversification. Methanol gained significant traction, with 166 orders placed in 2024, representing 32% of the AFI orderbook.
Significantly, the first non-gas carrier ammonia-fuelled vessel orders were placed in 2024, primarily in the bulk carrier segment. This development signals the growing prominence of ammonia as an alternative fuel in the maritime sector.
Bunkering Infra
DNV reported a significant increase in the number of LNG-fuelled ships in operation, with 169 deliveries in 2024. This growth resulted in 641 LNG-powered ships in operation by the end of the year. Based on current order books, this number is expected to double by the end of the decade.
While LNG bunkering infrastructure is expanding, with 64 LNG bunker vessels in operation, a significant gap remains between supply and demand. The EU’s Fit for 55 package, which mandates LNG bunkering infrastructure in numerous ports, is expected to significantly boost LNG availability.
Jason Stefanatos, global decarbonization director at DNV, attributed the fluctuating trends in LNG and methanol orders to the slow development of green methanol production. He emphasized the potential of green methanol as a long-term solution, alongside ammonia and LNG. He also highlighted the importance of RNG availability and competitive pricing for the long-term success of LNG as a marine fuel.
Carbon Pricing Mechanism
DNV’s findings on the growth of LNG-fueled ships coincide with the publication of a global carbon pricing mechanism proposal by a coalition of 47 governments and the International Chamber of Shipping (ICS).
This joint submission proposes amendments to the IMO MARPOL Convention to incentivize the adoption of zero-emission fuels. It involves the creation of an “IMO GHG Strategy Implementation Fund,” where shipping companies contribute based on their annual CO2 emissions.
The funds from this mechanism will be utilized to support the development and deployment of zero/near-zero emission fuels like green methanol, ammonia, and hydrogen. It will also assist developing countries in their decarbonization efforts.
This collaborative effort, involving major shipping nations and flag states, represents a significant step towards achieving net-zero emissions by 2050. While this proposal enjoys substantial support, the ICS will continue to engage with all IMO Member States to address any remaining concerns and ensure the successful implementation of this critical regulatory framework.
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Source: Baltic Exchange
