Clarksons says alternative fuels take a 45% slice of the newbuild pie

Clarksons Research has today released its latest Green Technology Tracker, including first half 2024 data points, charting the progress of alternative fuel uptake and investments in energy saving technologies across the global shipping fleet.

Summarizing the latest Tracker, Steve Gordon, global head of Clarksons Research, commented:

“Investment into alternative fuels continued in first half 2024, accounting for around one third of all newbuild orders and 41% of all tonnage placed and with orders announced for vessels capable of using either LNG (109 orders, 51 excluding LNG carriers), methanol (49 orders), ammonia (15 orders), LPG (42 orders) and hydrogen (4 orders). Excluding LNG carriers, the relative share of ordering of LNG fuel capable tonnage increased relative to methanol capable tonnage in the first half compared to 2023 levels.

“Although the first half represents a decline on the share of alternative fuel ordering since a 2022 high (54% share of tonnage ordered), this in part reflects a change in ship type ordering mix including, for the moment, lower order volumes involving containerships confirmed across first-half 2024. However with the focus on future ‘optionality.’ orders involving ‘ready’ status have increased to around a fifth of all orders (169 orders, 22% of tonnage ordered).

“With the confirmed orderbook (~50% of orderbook tonnage is today alternative fueled) and projected investment in the coming years, we forecast that over a fifth of all fleet capacity will be alternative fuel capable by the end of the decade (2017: 2% of fleet capacity “on the water”, 2024: 7%, 2030(f): >20%).

“Investments in port infrastructure and the availability of ‘green’ fuels continue to lag, with our Green Technology Tracker detailing 273 ports with LNG bunkering and 251 ports with shore power connection in place or planned but only 29 ports with methanol bunkering available and planned.

“With an aging fleet (12.8 years on a gross weighted basis up from a low of 9.7 years in 2013), over 30% of fleet capacity rating D or E under CII last year and long lead times (~3.5 years) at major shipyard), retrofitting of energy saving technologies (ESTs) remains a crucial part of shipping’s decarbonization pathway. Energy saving technologies (ESTs) have been fitted on over 8,713 ships, accounting for 33.5% of fleet tonnage: this includes propeller ducts, rudder bulbs, flettner rotors, wind kites, air lubrication systems and others (>493 ships with air lubrication system and >116 units involving “wind” assistance in the fleet and orderbook). Our tracker also includes 31 vessels in the fleet (plus 28 newbuilds) testing onboard carbon capture technology.

“We now estimate that shipping’s global GHG emissions will increase by ~3% in 2024 to 1,046 million tonnes of CO2e on a WTW basis and to move above start COVID-19 levels, with a higher proportion of time being spent at sea (assuming continued Red Sea re-routing), some increases in speed (especially in the container market, albeit we project the underlying long term trend for declining speed will continue) and trade growth offsetting the growing share of alternative fueled vessels, ‘eco’ ships and tonnage with ESTs.”

Whether exhaust gas scrubbers are “green” or not is debatable and alternative fuels don’t need scrubbing. However, the Green Technology Tracker also shows that scrubbers are now fitted to over 5,838 ships in the fleet, equivalent to 28.3% of total tonnage. Scrubber retrofitting activity and newbuild uptake has continued, with over 156 vessels retrofitted with a scrubber and 151 scrubber fitted ships reported ordered in in 2024 so far (2023: 521 vessels retrofitted, 401 newbuild orders). Price differentials between HSFO and VLSFO have narrowed since the start of the year, from around $125/tonne to now stand at around $75/tonne in key ports, as of end-June.

• Contact research.crs@clarksons.com for a copy of the Clarkson Research Green Technology Tracker and additional commentary on the data points.