515 Alt-Fuel Ships and Counting: Is the Bunker Industry Ready?

Singapore has made significant preparations for the shift to alternative bunker fuels. File Image / Pixabay

2024 brought the highest growth in alternative-fuel ship orders on record.

Shipping firms ordered a total of 515 vessels capable of running on alternative fuels last year, up by 38% on 2023’s order count, according to data from classification society DNV’s Alternative Fuels Insight database.

264 of these orders were for ships running on LNG, while methanol took up 166 orders, LPG 51, ammonia 27 and hydrogen seven.

The container segment was the biggest buyer of these ships, with 69% of newbuild orders for boxships last year having alternative fuel capabilities.

Given this wave of alternative-fuel vessels on their way to hit the bunker market, how should the industry prepare?

In the near-term, the answer for now appears to be a shift into the supply of biofuel blends and LNG as a bunker fuel.

Biofuel

While other alternative fuels are growing rapidly, biofuel blends remain the most popular alternative bunker fuel.

These blends are a drop-in alternative to conventional fuels, allowing them to be used in existing vessels without the need for new ship orders. Under FuelEU Maritime, any vessel calling at EU ports for part of its voyages may consider incorporating biofuels into its fuel mix at least periodically this year.

For the bunker industry, preparing for biofuels means securing supply, assessing demand and setting up blending capacity.

Suppliers will need to determine which bio feedstocks their customers are comfortable with – as the supply of the most common FAME-based blends will come under pressure as demand increases – and determine which can be delivered at the lowest cost.

They will also need to analyze which types of customers are most likely to take on increased biofuel purchases this year and at which ports.

LNG

LNG is currently in high demand within the bunker industry. However, establishing a fully operational LNG bunker supply chain requires significant investment. For example, an LNG bunker delivery vessel can cost approximately $50 million, making entry into this market a substantial commitment that requires careful consideration.

Over the past year, LNG has cemented its place as one of the most popular alternative fuels. The production of bio- and synthetic LNG is also gradually being established, giving a long-term pathway to full decarbonization for shipowners ordering LNG-fueled ships.

The energy transition in shipping will require both short-term pragmatism and long-term planning from the bunker industry.

In the short term, the bunker industry must engage with biofuels and fossil LNG to support the energy transition, even as regulatory treatment remains uncertain.

Over time, it must broaden its fuel offerings to include a wider range of low-emission alternatives like methanol and ammonia to align with future shipping demands.

Contact Us

For further insights and personalized assistance, contact our New Fuels Advisors stationed at key hubs around the world. They are equipped with the latest knowledge and tools to help navigate regulatory changes, fuel availability and the best solutions for your fleet. Email newfuels@gibunkering.com for expert guidance on making a seamless shift to new fuels.