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Clyde & Co: Specification and certification ‘key issues’ of alternative bunker fuels in both supply and charterparty contracts

‘It is clear there are significant benefits from the use of alternative marine fuels, but there are also significant risks,” highlights Paul Collier, Partner at Clyde & Co.

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Clyde & Co: Specification and certification ‘key issues’ of alternative bunker fuels in both supply and charterparty contracts

Specification and certification are “key issues” relating to alternative bunker fuels which should be considered at the outset when drafting the terms of bunker supply contracts and charterparties, according to a Partner at the Singapore arm of global legal firm Clyde & Co.

Paul Collier was giving a presentation at the firm’s Asia Pacific Marine Conference 2024 on Wednesday (29 May) when he pointed out the potential legal issues of alternative marine fuels.

Lack of clear specifications

“Firstly, specifications. Leaving aside LNG where there are already ISO standards, there is currently a lack of clear specifications covering alternative bunker fuels. This is because alternative fuels are a developing technology,” stated Collier.

He recommended bunker buyers to clearly state the specification of the fuel required when purchasing alternative fuels such as biofuel, methanol, ammonia, and hydrogen to know what product they are getting.

When no clear international standard is available, bunker buyers may refer to national standards – for example, the WA 2: 2022 standard for biofuels (developed by Singapore) – or alternatively agree to bespoke terms setting out the specification of the alternative marine fuel to be supplied.

Certification important for shipowners

Collier, meanwhile, highlighted alternative bunker fuels to be only as green as the production process and this is where obtaining proper certification for procured material will be important.

“There are two parts to consider. Firstly, what the emissions are when the alternative marine fuel is consumed by a vessel, and secondly what the emissions are to produce and then transport the fuel into the vessel’s tank,” he explained.

“There is a question as to whether buyers should be able to claim damages if there is an alternative fuel which has produced with high carbon intensity.

“A bunker supplier may contend that their obligation is simply to provide fuel meeting specification, and there is no warranty as to its carbon footprint, whereas a purchaser may say that they expected carbon neutral fuel.

“This will boil down to the terms and conditions of supply that are agreed and in particular whether there is a warranty as to the well-to-wake emissions of the fuel.”

Collier noted the above factors to be important as certification will be key to Owners obtaining favourable treatment under the Carbon Intensity Indicator (CII) and European Union (EU) regimes.

“Without certification, alternative marine fuels may be treated as producing emissions equivalent to fossil fuel consumption,” he informed while adding “this would place Owners in no better position compared to if they had consumed traditional oil-based bunker fuel.”

Charterparty issues arising from specification and certification gaps

Moving forward, Collier noted all points regarding specification and certification to be highly relevant in the Charterparty context.

“Where Owners are time chartering their vessels, and their time charterers are acquiring bunkers, it is sensible for Owners to include provisions in their time charters which set out firstly, the specification and  secondly, certification requirements for any alternative fuels,” he stated.

“As mentioned, certification is key to the vessel obtaining favourable treatment under the CII and EU regimes. Without it, vessels may face unexpected penalties under these regimes.”

Further, Collier recommended it may be worthwhile for Owners and Charterers under long term charters to consider allocating costs and benefits of any modifications required to consume alternative bunker fuels.

“Here, the potential benefits of allowing a vessel to consume alternative fuels are high, but so are the costs of any retrofits. Owners and Charterers may wish to consider agreeing cost allocation clauses which share both the benefits and costs,” he advised.

“There are also potential risks for consuming alternative fuels. Who is to bear the risks of problems? It may be worthwhile Owners considering including in their charterparties express terms which provide that any alternative fuel bunkers supplied by their time charterers will be fit for purpose and capable of being consumed by the Vessel’s engines.

“By contrast, Charterers should be aware that there is a risk that the cause of engine problems may not be the fuel itself. Issues could, for example, be due to the handling of fuel, or problems with vessel maintenance, which are typically the responsibility of Owners.

“There may therefore be disputes as to whether the vessels are off-hire following engine problems and who will bear the repair costs.

“In summary, it is clear there are significant benefits from the use of alternative fuels, but there are also significant risks. It is worth considering the legal and contractual implications early given their potential ramifications.”

 

Photo credit: Clyde & Co
Published: 31 May 2024

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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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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.”

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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