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BIMCO: Level playing field for ships must be assured while shipping industry decarbonises

BIMCO’s Deputy Secretary General argues what is missing are market-based measures for evening out operating expenses between old and new ships.

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The following article written by Lars Robert Pedersen, Deputy Secretary General at BIMCO, was published as part of the June edition of BIMCO’s Bulletin and shared with Singapore bunkering publication Manifold Times:

There are many initiatives within the shipping industry aiming to develop technology for zero-carbon ships. There are also several projects outside the sector looking to develop and scale-up production of zero-carbon fuels. But are they commercially viable and is regulation the answer? BIMCO’s Deputy Secretary General, Lars Robert Pedersen, argues that what is missing are market-based measures.

The Paris Agreement sets the ambition for the world in terms of climate-change mitigation. Collectively, action by all sectors of society worldwide should aim to keep global warming at a maximum 1.5 degrees Celsius above the pre-industrial level.

International shipping is not covered directly by the Paris Agreement as it is about Nationally Determined Contributions and ever since the emergence of the UN Framework Convention on Climate Change, international shipping (and aviation) has been considered the business of the International Maritime Organization (IMO) (and International Civil Aviation Organization) to deal with.

IMO member states agreed in 2018 to an Initial Strategy for the reduction of greenhouse gas emissions (GHG) from ships with a vision to de-carbonise ships as soon as possible within this century. An intermediate target was agreed to reduce total GHG emissions by 2050 to 50% of the total 2008 GHG emissions.

From a shipping industry perspective, the path is clear. Ships must de-carbonise and it must happen soon. It is about how and when – not if.

Is it commercially viable?

There are many initiatives within the shipping industry aiming to develop technology for zero-carbon ships. There are also several projects outside the shipping industry looking to develop and scale up production of zero-carbon fuels. We have an initiative under the auspices of the Global Maritime Forum called “Getting to Zero Coalition”; we have multiple developments spearheaded by various classification societies; we have the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping; and there are many more. What all have in common is the aim of getting a zero-carbon ship on the water as soon as possible – and before 2030.

Zero-carbon ships are likely to employ innovative technologies – for engines and ancillary equipment – and new fuel types that leave at least carbon-neutral footprints. We are talking expensive new equipment and costly new fuels.

Is this commercially viable? The answer is no – at least in the short to mid-term. It will cost more to build ships equipped to burn zero-carbon fuels, and the fuels themselves will add substantially to the operating expenses of such a new generation of ships.

It is one thing is to get a zero-carbon ship on the water, it is quite another launching a fleet of them and operating them in a commercially viable way. I believe this is unlikely to happen unless some sort of cost-equalising measure is introduced.

Is regulation the answer?

Could it be done by regulation? If the burning of fossil fuel was to be banned from a certain date in the future, only zero-carbon shipping would be available. This would be an extremely risky strategy that would likely create a major shortage of transportation supply and result in massive disruptions to economies across the globe. Not a recommended way forward.

It is more likely that transition of the industry will be organic, simply because of scale. Transition will probably take a generation of ships to complete – that is more than a decade, even if it is fast-tracked.

In such a scenario, ships using cheap fossil fuel would need to trade alongside a new generation of zero-carbon ships using vastly more expensive fuels competing in the same market for the same cargoes. Freight rates would not depend on the fuel technology of an individual ship, rather they would reflect a supply/demand balance and favour the cheapest operating ships in the market. As you can imagine, that would be the end of using native market forces to drive transition.

What is missing here is some kind of market-based measure (MBM); one that would even out the operating expense difference between the old and new generation of ships. It could be achieved by incentivising the new fuels and technologies to a level that puts them on a par with fossil fuel. It could be done by adding a penalty charge to fossil fuel to bring its price up to that the new fuels? Or it could be somewhere in-between.

The difficulty is of political nature. The world has agreed to tackle climate change with respect for national differences and respective capabilities. The phrase used in climate policy is “common but differentiated responsibilities and respective capabilities” (CBDR-RC). It means that each country should contribute in any way that it can, and those ways may differ from one country to another.

Shipping, on the contrary, thrives by a global set of rules developed by the IMO, which treats all ships equally, irrespective of the flag they fly. Ideally, an MBM for ships would be developed by the IMO and applied to all ships equally – that is, from a maritime industry point of view.

From an IMO member state’s perspective this may be different – or differentiated. That is why it is so difficult to tackle climate-change policy at the IMO. BIMCO has called for MBMs to be discussed by the IMO as soon as possible, and we look forward to seeing it happen.

Two things are certain: these will not be easy negotiations and the result will probably not be ideal from an industry viewpoint; and transition will not happen at large scale without an MBM.

 

Photo credit: Chris Pagan on Unsplash
Published: 14 June, 2021

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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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