The shipping industry is witnessing a notable shift towards the adoption of alternative fuels for cargo ships, reports the Baltic and International Maritime Council (BIMCO). Currently, 1% of ocean-going cargo ships are prepared to utilize alternative fuels, contributing to 2% of the international fleet’s deadweight capacity. Additionally, another 1% of ships and 4% of deadweight capacity are being readied for alternative fuels, making them easily retrofittable.
The International Maritime Organization (IMO) has set ambitious targets to reduce greenhouse gas emissions from the shipping sector. One of its goals is to have near-zero greenhouse gas emission fuels account for at least 5% of the energy used by shipping in 2030, with aspirations to increase this to 10%.
BIMCO’s analysis reveals that 29% of ships in the order book and 42% of the deadweight capacity are expected to be delivered prepared or readied for alternative fuels. This projection implies that, by 2028, even without recycling existing ships, 4% of the fleet’s deadweight capacity will be capable of using alternative fuels, with an additional 4% being ready for retrofit.
Once the order book deliveries are completed, a significant portion of various vessel types will be equipped for alternative fuels. At least 23% of the container fleet’s deadweight capacity, 7% of the tanker fleet, and 4% of the bulker fleet will be prepared or equipped for alternative fuels.
Niels Rasmussen, Chief Shipping Analyst at BIMCO, highlighted that sustainable biofuels are a potential solution to meet the IMO’s targets. However, competition for such fuels across various sectors is expected to be fierce. As a result, the shipping industry is placing a growing emphasis on transitioning to alternative green and blue fuels, as the availability of suitable fuels remains limited.
Liquefied Natural Gas (LNG) has been the most popular alternative fuel in shipping thus far, with methanol and ammonia also gaining traction. The increasing focus on green and blue fuels aligns with global efforts to significantly expand renewable energy capacity, making it more likely that the shipping sector can meet its 2030 environmental targets, even without relying heavily on biofuels.