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Argus Media: Decarbonisation in the bunker market

Argus estimates around 45% of the fuel mix will have to come from non-oil sources and almost all of that will need to be zero or low carbon to meet 2030 targets.

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Jonty Richardson, Manager, Consulting of global energy and commodity price reporting agency Argus Media on Friday (12 March) published a summary on the various ways the bunker market will achieve IMO 2030 targets now that IMO 2020’s sulphur cap has been implemented:

With the International Maritime Organization’s (IMO) 2020 sulphur regulation changes now in the rear-view mirror, IMO 2030 represents the next major milestone in the bunker market. There are different ways that the market will meet these targets and the stricter ones outlined for 2050.

The reduction of the maximum sulphur content of bunker fuel from 3.5% to 0.5% required action from refiners and shipowners to mitigate the impact of the significant drop in demand for high-sulphur fuel oil and the corresponding increase in very-low sulphur fuel oil demand. The market has made the switch to low-sulphur marine fuel without too much of a fuss and the next topic of conversation for the IMO is decarbonisation.

The IMO in 2018 outlined an initial strategy for the reduction of greenhouse gas (GHG) emissions in the shipping industry, which detailed key milestones for the medium and long term. These targets use 2008 as the baseline year, providing targets for 2030 and 2050.

IMO 2030

IMO 2030 targets a reduction in average carbon intensity (CO2 per tonne-mile) of at least 40% by 2030. Although low and zero carbon alternatives to bunker fuel will be a hot topic over the next decade, they will not be the most notable contributors to meeting IMO 2030 GHG reduction targets and their contribution will come to the forefront of discussion in the long-term outlook. This leads to the question of how will this 40% reduction in carbon intensity be achieved?

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The drive towards GHG reduction started much earlier, with the adoption of mandatory technical and operation measures dating back to 2011, when amendments to MARPOL Annex VI regulations codified the requirements with regard to Energy Efficiency Design Index (EEDI) and Ship Energy Efficiency Management Plan (SEEMP). EEDI stipulates the required energy efficiency of new vessels and the IMO estimate that these two measures will together reduce around 420mn t/yr of CO2, equal to a reduction of 20-25% from the baseline.

Slow steaming represents another means by which carbon intensity can be reduced. This practice became commonplace 2010-2014 with crude prices above $100/bl. The improvement in efficiency is evident in the relationship between seaborne trade and historic bunker demand shown in the figure below. With slow steaming still present in the current market and with some limitations to application in the container market due to the increased voyage length, there are some limitations to its further employment.

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LNG as a transition fuel

In addition to design and operational improvements, a certain degree of fuel switching will also play a part in meeting the 2030 target. Demand for LNG as a bunker fuel has increased significantly but remains a relatively small portion of the overall global market. LNG is future proof when it comes to sulphur content. There is global infrastructure in place to facilitate expansion and the technology is established. LNG releases around 20% less CO2 than fuel oil and marine gasoil, meaning that alongside other measures it is likely to satisfy targets outlined for 2030. Despite being a selling point at present and through the medium term, this represents a notable drawback in the longer term as LNG’s CO2 reduction profile versus established marine fuels is insufficient to satisfy 2050 targets.

IMO 2050 and the need for zero carbon fuels

IMO 2050 will introduce far stricter targets, necessitating a 50% reduction of GHG emissions from shipping by 2050. In order to meet this more aggressive target by 2050, zero carbon fuels will need to play a part in the fuel mix beyond 2030. There are many possible options, each with its unique selling points and caveats. LNG will likely continue to play a part due to the life cycle of vessels, but one or more of biofuels, hydrogen, methanol or ammonia represent potentially notable contributors to the global pool of bunker fuel in the long term.

For these fuels to gain traction as a viable alternative to existing bunker fuels such as fuel oil and gasoil, they will need to make economic sense, be available in sufficient quantities, scalable and ideally have a high enough energy density to facilitate long haul voyages without notable sacrifices to capacity. Whether it is one option that moves to the forefront, or a combination of the different fuels, these targets will not be met without them.

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Argus estimates that around 45% of the fuel mix will have to come from non-oil sources and almost all of that will need to be zero or low carbon. Ammonia and methanol both have the advantage of an established global infrastructure and are relatively easy to store and transport compared to a fuel like hydrogen. Biofuels are also an interesting option, due to HVO and FAME also having established global infrastructure, but the sustainability of feedstock source is a key determinant of the overall sustainability and the limitation of indirect land use change is increasingly prioritised, which limits available volumes. Legislation in key road transport markets across the world and domestic financial incentives for blending these fuels could price them at a level that limits their viability in the marine fuels sector.

Despite the current furore surrounding these zero and low carbon bunker fuels, it is too early to speculate about the significance to which each of these fuels may contribute to the fuel mix in 2050, but it is safe to assume that at least one of them will see significant growth. The conviction demonstrated in the pushback from some stakeholders within the industry regarding IMO 2020, the GHG reduction targets for 2030 and 2050 should be taken seriously. It is not a question if zero carbon fuels will be present in the fuel mix, but of which will emerge as the most significant.

 

Photo credit and source: Argus Media
Published: 18 March, 2021

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Alternative Fuels

Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

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Yang Ming orders six LNG dual-fuel, ammonia-ready containerships from Hanwha Ocean

Taiwanese shipping firm Yang Ming Marine Transport Corporation (Yang Ming) and South Korean shipbuilder Hanwha Ocean on Wednesday (2 September) signed a shipbuilding contract for six 13,000 TEU class LNG dual-fuel container vessels. 

The contract was signed by Dr. Chuck Tsai, Chairman of Yang Ming, and Mr. Charles Kim, CEO of Hanwha Ocean. The vessels are scheduled for delivery between 2028 and 2029. 

They will complement Yang Ming’s existing fleet of 10,000+ TEU vessels and serve as key vessels on East-West services, with deployment flexibility across trade lanes connecting Asia with the East and West Coasts of North America, South America, and the Mediterranean. 

Each of the six new vessels will have a capacity of up to 13,650 TEU and feature LNG dual-fuel propulsion and Ammonia Fuel Ready specifications.

“As Yang Ming transitions toward net-zero emissions, LNG provides a relatively mature and economically viable alternative fuel solution, capable of reducing greenhouse gas emissions by approximately 20%,” the company said. 

“At the same time, ammonia can serve as a carbon-free fuel by utilising converted LNG storage facilities, while offering relatively lower conversion costs and comparatively well-developed supply chains and infrastructure. The Ammonia Fuel Ready design will therefore provide Yang Ming with greater flexibility in responding to increasingly stringent international regulations on greenhouse gas emissions.”

In addition, the vessels will be equipped with Type B LNG fuel tanks with a design pressure of 1.0 bar to enhance the safety and efficiency of LNG operations, together with a range of energy-saving technologies, including Wind Shields, Rudder Bulbs, Pre-Swirl Stators, and Shore Power Systems. Smart ship technologies and cybersecurity protection features will also be incorporated to enhance operational efficiency, safety, and reliability while effectively reducing fuel consumption and greenhouse gas emissions.

Deliveries under Yang Ming’s next-generation fleet optimization plan commenced earlier this year. By 2030, a total of 24 new vessels are expected to enter service. 

This includes 18 LNG dual-fuel vessels—comprising five 15,500 TEU, seven 16,000 TEU, and the six 13,000 TEU vessels under this contract—alongside six 8,000 TEU methanol dual-fuel-ready ships. 

 

Photo credit: Yang Ming Marine Transport
Published: 4 September, 2026

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Alternative Fuels

LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Both secured AiP for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

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LR, China’s MARIC unveil tanker concept ready for three future bunker fuels

Lloyd’s Register (LR) and the Marine Design and Research Institute of China (MARIC) on Thursday (3 September) have secured Approval in Principle (AiP) for a new 114,000 DWT product and crude oil tanker designed to accommodate future conversion to LNG, methanol or ammonia.

Announced at SMM 2026, the concept addresses one of the biggest investment challenges facing shipping today: the need to develop vessels and capabilities that can support a range of alternative fuel options and pathways as technologies, infrastructure and regulations evolve.

While LNG is already a mature fuel pathway, methanol and ammonia remain at an earlier stage of development, with questions around global fuel availability, infrastructure development, economics and long-term adoption.

The 114,000 DWT tanker concept has been designed as a product and crude oil carrier that can accommodate future conversion to LNG, methanol or ammonia as technologies, regulations and fuel supply chains mature. By incorporating conversion readiness at the design stage, the concept aims to reduce future retrofit complexity and provide owners with greater confidence when planning long-term fleet investments.

The design concept was reviewed against LR’s July 2026 class rules and regulations, including requirements relating to ships using gases and other low-flashpoint fuels, alongside relevant IACS Common Structural Rules for oil tankers. Final classification and statutory approval remain subject to full compliance with all applicable rules and regulations.

Theo Kourmpelis, Global Business Director for Tankers, Lloyd’s Register, said: “Shipowners are being asked to make major investment decisions today despite continued uncertainty around which fuels will dominate in the decades ahead. Alternative fuel solutions each offer potential pathways to compliance, but fuel infrastructure, regulation and economics continue to evolve at different speeds around the world.

“Designs that preserve flexibility will be critical in helping owners manage risk while preparing for multiple future scenarios.”

Si Nan, Marine & Offshore Marketing Department Vice Director, MARIC, said: “As the industry explores different decarbonisation pathways, shipowners need vessel designs that can adapt alongside technological and regulatory developments. This concept was developed specifically to provide greater fuel flexibility and long-term resilience, allowing owners to respond to changing market requirements without being locked into a single fuel strategy.

“Receiving Approval in Principle from Lloyd’s Register is an important milestone that validates the design concept and supports its future development.”

 

Photo credit: Lloyd’s Register
Published: 4 September, 2026

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Alternative Fuels

DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

LNG-fuelled vessels accounted for the vast majority of August activity while the strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year.

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DNV: Alternative-fuelled vessel orders hit highest monthly level since October 2024

Latest data from classification society DNV’s Alternative Fuels Insight (AFI) platform alternative-fuelled vessel ordering was strong in August, with 52 new vessels added to the platform.

This is the highest monthly total since October 2024 and follows another active month in July, when 47 vessels were added to the database.

LNG-fuelled vessels accounted for the vast majority of August activity, with 46 orders recorded. The container segment led the way with 30 orders, while the car carrier segment contributed a further 12 LNG-fuelled vessels. In addition, four ethanol-fuelled bulk carriers and two hydrogen-powered bulk carriers were added during the month, as well as one LNG bunker vessel.

The strong summer performance marked a significant acceleration in ordering activity after a relatively slow start to the year. In total, 242 alternative-fuelled vessel orders have been placed in the first eight months of 2026, representing a 27% increase compared with the same period in 2025.

LNG remains the dominant fuel choice, accounting for 63% of all alternative-fuelled vessel orders registered so far this year. Container vessels represent the largest share of these LNG orders (59%), followed by car carriers (30%).

Jason Stefanatos, Global Decarbonization Director at DNV Maritime, said: “The past two months have been particularly strong for alternative-fuelled vessel ordering, with August recording the highest monthly total we’ve seen since October 2024. This has helped lift year-to-date orders to a level well above the same period last year.

“LNG remains the leading fuel choice, driven largely by activity in the container and car carrier segments. These sectors have been among the earliest adopters of alternative fuels, supported by predictable liner operations and increasing demand from cargo owners to reduce emissions across supply chains. 

“For many owners, LNG offers a combination of emissions reductions, fuel availability and future flexibility while the longer-term fuel landscape continues to evolve. 

“At the same time, the latest figures include orders for ethanol- and hydrogen-fuelled vessels, highlighting that owners continue to explore a range of decarbonization pathways. Different segments are making different fuel choices, but the overall level of activity demonstrates continued investment in lower-emission shipping.”

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Photo credit: DNV
Published: 4 September, 2026

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