Momentum for Methanol Fuel Ship Orders Continues in 2024 Q1

March saw two ship orders with methanol propulsion, two with ammonia and one with LNG. Image Credit: DNV

After a notable rise in 2023, new contracts for ships capable of running on methanol bunkers continued their momentum in the first quarter of 2024, according to the latest data from classification society DNV.

2024 Q1 saw a total of 35 methanol-fuelled vessel orders. The quarter also saw 28 for new contracts for LNG-fuelled vessels.

March witnessed a notable drop in total alternative fuel orders, following 23 methanol and 10 LNG powered orders in January, and 10 methanol and 17 LNG orders in February, with two ship orders with methanol propulsion, two with ammonia and one with LNG, DNV said in an emailed statement on Friday.

It should be noted that these figures cover only the outright number of ship orders, rather than the gross tonnage or fuel tank capacity of the vessels ordered. If the orders for one of the fuels were generally of larger ships than for the others, that would create more demand for that fuel even with a lower quantity of orders.

"Although new order activity in March has fallen short of the high volume registered in January and February, the overall picture remains positive," Jason Stefanatos, global decarbonisation director at DNV, said in the statement.

"As seen by the exponential year-on-year growth for new orders in the first quarter of the year, the alternative-fueled fleet is expanding at a rapid pace.

"The LNG fleet in operation has more than doubled since 2021, while the fast-growing methanol orderbook indicates similar growth in this segment over the next five years.

"The ammonia fleet just started to develop in the beginning of the year, adding two new orders in March, on top of three in January and February.

"We are now seeing signs that investment in these vessels is also on the rise, and market conditions indicate that this could continue over the coming months and years."