Growth of Clean Fuel-Powered Ships: A Significant Shift in the Maritime Industry
In recent years, the global fleet of clean fuel-powered ships has seen remarkable growth. The current dual-fuel fleet consists of 2,119 vessels with a combined capacity of 123 million gross tons.
This growing fleet now represents 7.4% of the global maritime fleet by gross tonnage, a significant increase from the 3.2% recorded in 2018, according to data from Intermodal.
LNG Dual-Fuel Vessels Dominate the Market
Of this eco-friendly fleet, 84% is powered by LNG (liquefied natural gas), comprising 1,248 vessels with a total capacity of 102.93 million gross tons. LNG remains the leading alternative fuel for dual-fuel ships, contributing to the sector’s decarbonization efforts.
Rising Share of Dual-Fuel Vessels in the Global Orderbook
The share of dual-fuel vessels in the global orderbook continues to rise steadily, now accounting for 52% of new ship orders, up from just 16% in 2018. The global dual-fuel orderbook includes 1,821 vessels with a combined capacity of 143 million gross tons, with 1,042 LNG dual-fuel vessels making up 103.74 million gross tons.
The Role of Regulatory Pressure and Financing Opportunities
This rise in eco-friendly vessels is largely driven by tightening regulatory standards and the growing availability of financing options, particularly through the Poseidon Principles framework.
Launched five years ago, the Poseidon Principles is a global framework designed for financial institutions to assess and disclose the climate alignment of their shipping portfolios. The initiative aims to support the decarbonization of the maritime industry by promoting the financing of environmentally sustainable ships.
According to the fifth Annual Disclosure Report from the Poseidon Principles, 35 banks from 14 countries have signed on, representing nearly 80% of the global ship finance portfolio.
Nikos Tagoulis, Senior Analyst at Intermodal, commented: “The implementation of the Poseidon Principles is progressing within the global ship financing portfolio, demonstrating a commitment to sustainable ship financing, despite the challenges that still need to be addressed.”
Challenges and Opportunities Ahead
While the green transition in the shipping industry is gaining momentum, as seen in the growing share of eco-friendly vessels within both the fleet and orderbook, challenges remain. Notably, the decline in recycling activity in recent years has slowed fleet modernization.
The pace of fleet demolition will be a key factor to monitor in the coming year. A potential rise in scrapping volumes could accelerate modernization and further support the green transition.
Conclusion
As the maritime industry continues to embrace sustainability, dual-fuel vessels, particularly those powered by LNG, are leading the charge. Supported by frameworks like the Poseidon Principles and ongoing regulatory pressures, the green shift in shipping is expected to gain further traction, although challenges remain in fleet modernization and recycling.
