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SEA-LNG: Lifetime fuel costs of LNG pathway expected to be half of methanol and ammonia

Analysis shows lifetime cost of complying with regulatory regimes like FuelEU Maritime for LNG-fuelled vessels will be around half that of methanol and ammonia powered alternatives over coming decades.

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Global multi-sector industry coalition SEA-LNG on Thursday (15 June) said its analysis showed the lifetime fuel costs of meeting key European decarbonisation targets for shipping through the LNG pathway are expected to be roughly half that of the methanol or ammonia pathways.

Building on recent work by the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS) projecting fuel costs for alternative marine fuels out to 2050 (see Figure 1) and using long-term price benchmarks for ammonia, methanol and LNG as a marine fuel, SEA-LNG has calculated the cost of compliance with FuelEU Maritime regulations for a typical 14k TEU newbuild container vessel coming into operation in 2025.

FuelEU Maritime requires vessels to reduce the intensity of greenhouse gases produced by their energy consumption in coming years against a benchmark of the fleetwide average in 2020. 

Grey versions of ammonia and methanol start at a significant disadvantage to LNG. The additional greenhouse gas emissions involved in producing ammonia and methanol from natural gas means that respectively these grey fuels emit 47% and 14% more GHG emissions than VLSFO on a well-to-wake basis. Fossil, or grey LNG, offers up to 23% immediate GHG emission reductions compared to VLSFO on a well-to-wake lifecycle basis.

What this means is that owners opting for LNG-fuelled vessels will be able to meet the reduction targets until 2039 without needing to blend their fuel with low-carbon bio-LNG or renewable synthetic e-LNG. By contrast, owners of methanol and ammonia fuelled vessels will need to include significant proportions of a green fuel immediately to meet the regulations, vastly inflating their fuel bills.

Assuming an average fuel burn for the typical 14k TEU newbuild container vessel of 146 tonnes of VLSFO equivalent per day (as per Figure 2 above), a methanol-powered vessel would require a 14% green fuel blend to comply with FuelEU Maritime in 2025 at a fuel cost of almost USD55m per year, assuming the use of biomethanol. An ammonia powered vessel, if such a thing existed, would require a 33% green fuel blend to comply and face a fuel bill of about USD80m per year if using e-ammonia. LNG by contrast would require no blending with a fuel bill of just over USD20m per year. 

By 2040, LNG would require a 14% green fuel blend and annual fuel costs are expected to reach around USD25m, assuming the use of bio-LNG. Methanol’s green fuel blend requirement, will have increased to 40%, resulting in an annual fuel bill of just over USD 55m, assuming the use of biomethanol – the effects of the increased volume of biomethanol required offset by the falling costs of the green fuel. For ammonia the blend ratio will have increased to 53% with a blended fuel cost of approximately USD70m – the effects of the increased volume of e-ammonia required more than offset by the falling costs of the e-fuel. By 2050, SEA-LNG analysis shows that all three fuel options will have significant blends of green fuels in the form of bio- and e-fuels and we expect to see a convergence in overall fuel costs.

In summary, this simple analysis shows (as illustrated in Table 1, below) that the LNG pathway to compliance with FuelEU Maritime offers massively lower fuel costs than both the methanol and ammonia pathways, particularly in the first 15 years’ of the vessel’s life – a period critical for vessel financing decisions. The methanol pathway is approximately 2.5 times more expensive and the ammonia pathway 3.5 times more expensive.

Similar analysis can be undertaken for other sectors and while the absolute numbers will be different the cost ratios for the different pathways will be similar.

SEA-LNG COO Steve Esau, said: “Our analysis shows that lifetime fuel costs of achieving net-zero emissions through the LNG pathway are expected to be roughly half that of those for methanol and ammonia. This underlines the importance of understanding the implications of the journey to net zero as well as the destination. LNG offers GHG reductions today and a low cost, incremental solution for decarbonisation.”

SEA-LNG added it is currently developing a cost of compliance calculator that will enable ship owners, investors, charterers, and operators to explore the commercial implications of different fuel choices in complying with EU and IMO regulations.

Note: The full analysis can be read here

Related: SEA-LNG slams ‘Say No to LNG’: Campaign based on ‘false contention’
Related: Énestas joins SEA-LNG to share insights on Mexican and U.S. LNG bunkering
Related: SEA-LNG publishes overview of LNG as bunker fuel for 2022 to 2023
Related: SEA-LNG: Bio-LNG is the most readily available solution to decarbonise shipping
Related: SEA-LNG: New independent study confirms bio-LNG’s role in shipping’s decarbonisation
Related: SEA-LNG calls UCL report on LNG capable ships ‘a flawed academic exercise, detached from reality’
Related: SEA-LNG slams ICCT: Report on LNG Pathway makes ‘flawed assumptions based on outdated data’
Related: SEA-LNG: LNG retrofits will rate higher under CII than HFO/scrubber or VLSFO alternatives
Related: SEA LNG: Compare ‘apples with apples’ to cut emissions and costs

 

Photo credit: Cameron Venti from Unsplash
Published: 16 June, 2023

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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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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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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.”

Screenshot 2026 09 04 at 12.29.26 PM Screenshot 2026 09 04 at 12.29.36 PM

 

Photo credit: DNV
Published: 4 September, 2026

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