Projected Surge in Alternative Fuel Vessel Fleet by 2028, Driven Primarily by LNG

The maritime industry is on the cusp of a significant transformation as projections indicate that the fleet of alternative fueled vessels could almost double by 2028, with liquefied natural gas (LNG) leading the charge. According to the latest insights from the Norwegian classification agency DNV, dual-fueled vessels currently dominate the containership order book, representing three-quarters of new orders. However, the adoption of alternative fuels is noticeably slower in the large tanker and bulk carrier sectors, where only one in five and one in twenty vessels, respectively, are designed to utilize these fuels.

The preference for LNG is attributed to the more established bunkering infrastructure available in ports compared to other alternative fuels such as methanol, ammonia, and hydrogen, which still suffer from inadequate investment in necessary facilities. As the maritime industry grapples with the pressing need to reduce greenhouse gas emissions, it faces the daunting challenge of increasing its consumption of lower-emission fuels to approximately 25 million tons per year of oil equivalent—an ambitious leap from the current consumption of just 1 million tons.

This shift is further complicated by fierce competition from other heavy industries vying for the same low-emission fuels, including biofuels, e-fuels, and blue fuels, which are derived from gas with carbon capture technologies. Currently, vessels capable of utilizing alternative bunker fuels represent only 8-9% of the operational fleet and 51.1% of the order book by gross tonnage.

However, in terms of sheer numbers, just 2.4% of operational vessels and 26.5% of those on order are equipped to use alternatives to traditional fuel oil, revealing a significant lag, particularly among smaller ships. As the industry looks to the future, the urgency to adapt and innovate in its fuel sourcing has never been more pronounced.