Alternative fuels such as LNG, LPG, biofuel, methanol, ethane, hydrogen, ammonia, and battery/hybrid propulsion are gaining traction with 3.5% of fleet capacity using them, and 27% of the orderbook by tonnage.
Outside of LNG carriers, Clarkson Research is tracking 227 (15.1m gt) confirmed LNG fuel capable newbuilding orders, above the 202 in the trading fleet.
“LNG’s case as a legitimate ‘stepping stone’ to meet emissions targets is supported by port facility investment: we now record 124 ports with LNG bunkering facilities, up from 114 at the start of the year and forecast at 170 by 2022, and also project that the LNG bunkering fleet will double in size in the next two years,” Clarkson Research wrote. “We are also monitoring other port facility upgrades like onshore power.”
LPG as a marine fuel is gaining good traction within the LPG carrier fleet, with one in fleet and 37 newbuild orders plus 11 pending retrofits.
There are also projects involving biofuel with 23 in the fleet plus seven newbuildings, while methanol is seeing 12 in the fleet and 11 in newbuildings; hydrogen with three in newbuildings and battery hybrid on 141 in fleet plus 109 in newbuildings.
“We are also tracking increases in EST (energy saving technologies) update,” Clarkson Research mentioned. Some of the EST include waste heat recovery system, exhaust gas economiser, propeller duct, rudder bulb, rigid sail, wind kite, air lubrication system, bow enhancement and others.
Clarkson Research believes that many of these EST will help with the IMO short term measures from 2023 and contribute to the fleet renewal decision making process, especially around the relatively young, non-eco cohort of tonnage built in the 2008-12 shipbuilding production peak.
The move toward alternative fuels is a combination of environmental pressures and stricter regulations on emissions, such as the IMO agreement on 2030 policies, EU and ETS, Sea Cargo Charter, China carbon net zero by 2060, and US re-signing Paris Climate Accord.
“The timing, technology choices and financing of the investment required to reduce shipping’s GHG emissions (currently includes 800m tonnes and 2.3% of global CO2) however remains a huge hurdle for stakeholders across maritime,” Clarkson Research said.