Is LNG the Future of Sustainable Shipping Fuel Alternatives?

January 13, 2025

As the global shipping industry grapples with the challenge of drastically reducing carbon emissions and shifting toward more sustainable fuel choices, interest in LNG as an alternative to traditional bunker fuel has significantly grown. This move has been driven not only by the international mandate to slash CO2 emissions but also by rising consumer and regulatory pressures. In 2024, a marked rise in orders for alternative-fuel ships underscored this shift, indicating a clear commitment to more environmentally responsible practices within the shipping sector.

The Surging Popularity of LNG

Rise in LNG Vessel Orders and Deliveries

The shipping industry witnessed a remarkable surge in the adoption of LNG as a sustainable fuel in 2024, as reflected in maritime data. Ocean carriers, in particular, showed a heightened preference for LNG-powered vessels, with 264 LNG ship orders placed, more than doubling the number recorded the previous year. The delivery of LNG dual-fuel ships also reached unprecedented levels, with 169 new vessels entering the fleet. This brought the total number of operational LNG-powered ships to 641. Forecasts suggest that this figure is expected to double by the end of the decade, underlining the growing confidence in LNG as the go-to alternative fuel for the shipping industry.

Shipping companies have largely driven this surge in orders by the container and car carrier segments, which together accounted for an impressive 62 percent of the orders for alternative-fuel ships placed in 2024. This trend signifies the industry’s broader commitment to adopting sustainable practices in response to mounting consumer demand for greener shipping solutions. As the fleets expand, they also bring forth a promise of significant reductions in CO2 emissions. However, to sustain and meet future demands, adequate infrastructure for LNG bunkering must be established globally.

Maturation of LNG Bunkering Infrastructure

One of the principal drivers of the LNG adoption trend has been the maturation and expansion of LNG bunkering infrastructure. The number of LNG bunker vessels, essential for refueling LNG-powered ships, increased from 52 to 64 in 2024, reflecting a notable commitment to supporting the new fuel type. Despite this progress, industry experts have raised concerns about a potential supply-demand gap in the next five years. To mitigate such future challenges, substantial efforts are required to enhance and develop a comprehensive bunkering network.

Efforts are already underway in various regions to address these potential supply bottlenecks. The European Union, for example, has mandated the establishment of a widespread network of ports capable of offering LNG bunkering services. This regulatory push from a major shipping hub demonstrates the urgency to prepare strategically for an LNG-powered future. Such initiatives ensure that LNG bunkering capacity keeps pace with the rapid growth in LNG vessel numbers, securing the supply chain needed to uphold the environmental benefits promised by LNG.

Diversifying the Alternative Fuel Pool

Growing Interest in Methanol

In addition to LNG, methanol has also garnered significant attention as a potential sustainable fuel for the shipping industry. Orders for methanol-powered vessels rose to 166 in 2024, up from 138 the previous year, reflecting growing interest, particularly in the container shipping segment. This interest is driven by methanol’s promise as a cleaner fuel, despite the fact that the production of green methanol is still in its nascent stages. The initial investments and orders indicate that industry players are keen on exploring a diverse range of alternative fuel options, allowing for fuel flexibility and resilience against future regulatory changes.

This increased interest in methanol, a fuel known for its cleaner burning properties, signifies a strategic diversification within the industry. By not solely relying on LNG, shipping companies can hedge against fuel availability and pricing uncertainties. The container shipping segment’s adoption of methanol highlights a sector-specific approach to alternative fuels, as different vessel types and operational aspects might favor different fuel types. As the technology and production processes for green methanol evolve, it’s anticipated that its adoption will continue to rise, contributing to the industry’s overall sustainability goals.

Emergence of Ammonia-Fueled Vessels

Another noteworthy development is the emergence of ammonia as a viable alternative fuel option for marine vessels. While the number of ammonia-fueled ships is still relatively small compared to LNG and methanol, 2024 saw an increase in orders, totaling 27, up from just eight in the previous year. Significantly, this included the first orders for non-gas carrier ammonia-fueled vessels, with half of these being bulk carriers. This shift denotes widening interest in ammonia across various ship types, suggesting that stakeholders are seriously considering its potential benefits.

The rise in ammonia-fueled vessel orders underscores a proactive approach within the industry to explore all possible avenues for reducing emissions. While ammonia presents its own technical and safety challenges, its potential as a zero-carbon fuel is compelling. Continued research and development, coupled with collaborative efforts among stakeholders, are crucial to overcoming these hurdles. The adoption of ammonia ships, albeit in its early stages, reflects a strategic shift towards exploring multiple sustainable fuel alternatives, ensuring that the shipping industry can meet stringent environmental regulations and consumer expectations.

Challenges and Future Steps

Ensuring Fuel Supply and Infrastructure Development

Despite significant progress in adopting alternative fuels, several challenges remain, primarily around fuel supply and bunkering infrastructure. Ensuring an adequate supply of LNG and other alternative fuels to meet the increasing demand is crucial for sustaining the momentum. The development of a robust and widespread bunkering infrastructure, especially in key global shipping hubs, is essential. Collaboration among industry players, governments, and other stakeholders is vital in addressing these challenges and ensuring a seamless transition to sustainable shipping fuels.

Efforts are being made worldwide to ramp up infrastructure and facilitate the necessary transition. The global nature of the shipping industry means that a coordinated approach is vital, with various regions playing pivotal roles. For instance, the European Union’s regulatory framework may set a precedent for other regions to follow, promoting uniformity and efficiency in the fuel supply chain. Such measures are crucial in preventing future supply-demand mismatches and ensuring consistent availability of alternative fuels to support the global fleet.

Regulatory and Consumer-Driven Demand

As the global shipping industry faces the pressing challenge of significantly reducing carbon emissions and transitioning to more sustainable fuel options, interest in liquefied natural gas (LNG) as an alternative to traditional bunker fuel has surged. This shift is driven not just by the international directive to lower CO2 emissions, but also by growing consumer and regulatory demands for cleaner energy solutions. By 2024, there was a noticeable uptick in orders for ships powered by alternative fuels, highlighting a clear commitment within the shipping sector to embrace more environmentally responsible practices. The increasing use of LNG is seen as a pivotal step in this transition, as it offers a cleaner-burning fuel compared to conventional options. Moreover, the shipping industry’s adoption of such advances reflects a broader trend toward sustainability, as stakeholders acknowledge the urgent need to address climate change. As the world moves towards greener solutions, the maritime sector’s move to LNG signifies its proactive stance in combating environmental challenges.

Subscribe to our weekly news digest.

Join now and become a part of our fast-growing community.

Invalid Email Address
Thanks for Subscribing!
We'll be sending you our best soon!
Something went wrong, please try again later