Alternative Fuels

DNV: Fuel flexibility starting with LNG

LNG is not the end game, but it is the starting point to carbon zero. With the IMO GHG reduction targets knocking at our doors, we cannot afford to wait, states Dr. Shahrin Osman.

Published

3 years ago

March 10, 2022

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By Dr. Shahrin Osman, Regional Head of Maritime Advisory, Director of Maritime Decarbonization and Autonomy Centre of Excellence Asia – Pacific at DNV

The growing stringency in environmental regulation has compelled the maritime industry into a major shift in fuels. Regional and national lawmakers are also demanding a faster energy transition attributed to a changing climate of public opinion, affecting both financiers and charterers.

Shipowners today are hence experiencing increasing pressure to reduce their greenhouse gas footprint as part of the decarbonization journey.

Therefore, as an industry, many wonder how we can accelerate the transition to carbon zero fuel. As DNV sets out to answer that question, we strongly believe that fuel flexibility is the key to staying competitive in an uncertain fuel future.

As policy developments and stakeholder’s engagement over the next few decades will drive shipowners to find new solutions, our decarbonization experts have inaugurated a new carbon risk framework in the Maritime Forecast to 2050 report.

The aim is to allow shipowners to assess the technology, fuel, and energy landscape, therefore empowering them to make informed business decisions which keep their carbon emissions below the stipulated level.

This framework also gives a detailed assessment of fuel ready, fuel flexible solutions and evaluates vessel design implications.

“Fuel Ready” is a class notation that offers shipowners the choice to prepare for a later conversion to a myriad of various alternative fuel options, and “Gas fuelled ammonia” for ammonia fuelled vessels, to stay in the lead of shipping’s ever tightening carbon reduction restrictions.

In the report, a decarbonization stairway model was also introduced to show how individual owners can adapt to reduce their carbon emissions.

To enable the transition to carbon zero, LNG has set the precedence for clean-burning natural fuel and is excellent for future viability. With research in LNG as fuel dating back to more than two decades ago, it is therefore certainly in a reliable position as a transition fuel.

Our key finding was that installing a dual-fuel LNG engine is a robust choice today enabling future flexibility. Advantages include:

Cost-effective: a dual-fuel LNG engine can run on cheaper LNG
Compliant: 20% to 25% reduction in tank-to-wake CO2 emissions
Flexible: if correctly designed, it can potentially be used for other fuels

Especially in the deep-sea segment, dual-fuel solutions and alternative fuel “ready” solutions could smooth this transition, by laying the groundwork for a future retrofit.

With a combination of technologies such as adaptable storage tanks, onboard systems, and shore-side fuel infrastructure, this could give the industry more options as new fuels and technologies surface.

Taking a long-term perspective, investing in LNG not only reduces our carbon footprint and allows the reliable consolidation of renewables, but it also facilitates the production of hydrogen-based fuels that are carbon neutral, produced from a carbon capture and utilization process- like LNG.

DNV’s Alternative Fuel Insight (AFI) portal closely monitored the newbuilding trend and at the year-end 2021 approximately one third (based on GT) of all new-build tonnage was ordered with alternative fuels. This included over 240 ships fuelled by LNG, 48 with LPG, 22 with methanol, and 4 with hydrogen.

Our AFI portal also reported nearly 200 vessels with an LNG fuel system were ordered in 2021, making last year a record-breaking one for LNG.

The emergence of bio- and synthetic LNG would allow owners to switch to a low carbon fuel without having to make any additional adjustments on board.

DNV is a long-time advocate of LNG and an early pioneer of its use as a marine fuel, our rules for gas-fueled ships were first issued very early back in in January 2001 – more than 20 years ago.

Since then, we have gained considerable experience, and comprehensive efforts have been put into the development of the regulatory framework for gas-fuelled ships, including the development of the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code).

So, what is the trend for newbuild ships like over the next few years?

We see an increase in deep-sea LNG-fuelled ships globally, and in batteries for full-electric or part-electric operations in the short-sea segment.

The technical applicability and commercial viability of alternative fuels will, however, vary greatly for different ship types and trades. Deep-sea vessels have fewer choices compared with the short-sea segment.

Deep-sea shipping involves large ocean-going ships that need to store very huge amounts of energy, where the main proportion of energy consumption relates to propulsion of the ship at steady speed over long distances.

Hence, options for the deep-sea trade are still limited to LNG and LPG, or to biofuels which are not yet prevalent and are more costly than LNG and LPG.

LNG is not the end game, but it is the starting point to carbon zero. With the IMO GHG reduction targets knocking at our doors, we cannot afford to wait. The industry must take a proactive stance and ensure that the potential of cleaner fuels is well harnessed.

Source: DNV
Published: 10 March, 2022

LNG Bunkering

New MOL vessel to be supplied LNG bunker fuel in Japan before voyage to Australia

After departing from Saijo Shipyard, LNG fuel will be supplied directly to “Verde Heraldo” through shore-to-ship bunkering at Senboku Terminal of Osaka Gas, and is then scheduled to sail for Australia.

Published

22 hours ago

April 22, 2025

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New MOL vessel to be supplied LNG bunker fuel in Japan before voyage to Australia

Mitsui OSK Lines (MOL) on Friday (18 April) said the naming and delivery ceremony for the LNG-fuelled Capesize bulker, which MOL ordered for JFE Steel Corporation, was held at the Saijo Shipyard of Imabari Shipbuilding.

The vessel was named the Verde Heraldo, which means “Green Pioneer” in Spanish, by JFE Steel President and CEO Masayuki Hirose. MOL executives including President & CEO Hashimoto were also on hand for the ceremony.

After departing from Saijo Shipyard, LNG fuel will be supplied directly to the vessel through shore-to-ship bunkering at the Senboku Terminal of Osaka Gas, and is then scheduled to sail for Australia.

The Verde Heraldo will sail under long-term transport contracts to supply raw materials for JFE Steel's mills, providing both reduced environmental impact and safe and reliable marine transport services.

About Verde Heraldo

LOA: 299.99 m
Breadth: 50.00 m
Draft: 18.436 m
Deadweight tonnage: 210,321 tonnes
Shipyards: Imabari Shipbuilding and Nihon Shipyard

Photo credit: Mitsui OSK Lines
Published: 22 April, 2025

Alternative Fuels

Indonesia and HDF Energy partner to study hydrogen solutions for maritime decarbonisation

Agreement between HDF Energy, Indonesia’s Ministry of Transportation, PLN and ASDP outlined a joint study to decarbonise Indonesia’s maritime sector using locally produced green hydrogen.

Published

22 hours ago

April 22, 2025

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Indonesia and HDF Energy partner to study hydrogen solutions for maritime decarbonisation

PT HDF Energy Indonesia, a subsidiary of French hydrogen infrastructure developer HDF Energy, recently signed a Memorandum of Understanding (MoU) with Indonesia’s Ministry of Transportation (MoT), state-owned electric utility PT PLN (Persero) and ferry operator PT ASDP Indonesia Ferry (Persero).

The agreement outlined a joint study to decarbonise Indonesia's maritime sector using locally produced green hydrogen. The study will be conducted in collaboration with, and co-funded by, the International Maritime Organization (IMO).

The MoU was signed during the Global Hydrogen Ecosystem Summit on April 15, 2025 in Indonesia.

The study will focus on Eastern Indonesia, a region with plenty of sun and home to many of ASDP's strategic ferry routes. HDF Energy is currently developing 23 Renewstable® hydrogen power plants in the region. These facilities combine a solar park with substantial on-site energy storage in the form of green hydrogen to provide non-intermittent, stable and 100% clean electricity to the grid, day and night.

By generating surplus green hydrogen at a competitive marginal cost, Renewstable® plants also pave the way for the supply of green hydrogen to decarbonise maritime transport. The hydrogen produced will be used to power the high-power fuel cells developed and manufactured by HDF Energy in France, a modular, reliable solution tailored to the conversion of maritime fleets.

With this project, HDF Energy is deploying an integrated approach: producing competitive green hydrogen locally and offering a zero-emission maritime vessels' propulsion solution based on its fuel cells.

ASDP, which operates one of the world's largest ferry networks, plays a critical role in connecting Indonesia's remote islands. As a key player in the maritime sector's energy transition, the company will contribute to the study to identify opportunities for converting its fleet and port infrastructures. The aim is to replace traditional diesel engines with solutions based on green hydrogen and renewable electricity, in order to significantly reduce emissions.

PLN has already taken a proactive role in launching hydrogen pilot projects across the country. The company previously signed an MoU with HDF Energy to accelerate the deployment of Renewstable® hydrogen power plants as a green alternative to diesel-based power — a collaboration representing potential investments of up to USD 2.3 billion, supported by international development institutions including the U.S. International Development Finance Corporation (DFC).

On the same occasion, HDF also signed an MoU with PT Pelayaran Bahtera Adhiguna (PT BAg), a national shipping company specialising in sea transportation services for primary energy distribution across Indonesia. The partnership reflects a joint commitment to assessing hydrogen as a clean alternative to power auxiliary systems on large vessels.

Mathieu Geze, HDF Energy's Director for APAC and President Director of PT HDF Energy Indonesia, stated: “We are proud to reaffirm our commitment to a Net Zero emission future through this strategic collaboration. Working together with PLN, ASDP, the Ministry of Transportation, and with PT Bag, we aim to place Indonesia at the forefront of green hydrogen innovation in the Asia-Pacific. Our fuel cells represent a decisive step forward in the decarbonization of maritime transport in the Indonesian archipelago, as well as a formidable showcase for French innovation on the international stage.”

On a regional scale, this partnership in Indonesia is part of HDF Energy's development drive in Southeast Asia.

On 11 April, in the Philippines, HDF signed a MoU with the Department of Transportation to harness green hydrogen—produced by HDF's Renewstable® power plants currently under development—to power the next generation of hydrogen-fuelled maritime vessels.

The following day in Vietnam, HDF entered into a strategic partnership with ACST, an organisation affiliated with the Ministry of Construction, to advance green hydrogen solutions, including the retrofitting of diesel ferries with HDF's hydrogen fuel cells.

Photo credit: HDF Energy
Published: 22 April, 2025

Biofuel

Argus Media: IMO incentive to shape bio-bunker choices

IMO proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward.

Published

23 hours ago

April 22, 2025

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An International Maritime Organization (IMO) proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward.

22 April 2025

The price of these credits will help determine whether B30 or B100 becomes the preferred bio-bunker fuel for vessels not powered by LNG or methanol. It will also influence whether biofuel adoption is accelerated or delayed beyond 2032.

At the conclusion of its meeting earlier this month the IMO proposed a dual-incentive mechanism to curb marine GHG emissions starting in 2028. The system combines penalties for non-compliance with financial incentives for over-compliance, aiming to shift ship owner behavior through both "stick" and "carrot" measures. As the "carrot", ship owners whose emissions fall below the IMO's stricter compliance target will receive surplus credits, which can be traded on the open market. The "stick" will introduce a two-tier penalty system. If emissions fall between the base and direct GHG emissions tiers, vessel operators will pay a fixed penalty of $100/t CO2-equivalent. Ship owners whose emissions exceed the looser, tier 2, base target will incur a penalty of $380/t CO2e. Both tiers tighten annually through 2035.

The overcompliance credits will be traded on the open market. It is unlikely that they will exceed the cost of the tier 2 penalty of $380/t CO2e. Argus modeled two surplus credit price scenarios — $70/t and $250/t CO2e — to assess their impact on bunker fuel economics. Assessments from 10-17 April showed Singapore very low-sulphur fuel oil (VLSFO) at $481/t, Singapore B30 at $740/t, and Chinese used cooking oil methyl ester (Ucome), or B100, at $1,143/t (see charts).

If the outright prices remain flat, in both scenarios, VLSFO would incur tier 1 and tier 2 penalties, raising its effective cost to around $563/t in 2028. B30 in both scenarios would receive credits putting its price at $653/t and $715/t respectively. In the high surplus credit scenario, B100 would earn roughly $580/t in credits, bringing its net cost to about $563/t, on par with VLSFO, and more competitive than B30. In the low surplus credit scenario, B100 would earn just $162/t in credits, lowering its cost to approximately $980/t, well above VLSFO.

At these spot prices, and $250/t CO2e surplus credit, B100 would remain the cheapest fuel option through 2035. At $70/t CO2e surplus credit, B30 becomes cost-competitive with VLSFO only after 2032. Ultimately, the market value of IMO over-compliance credits will be a major factor in determining the timing and extent of global biofuel adoption in the marine sector.

By Stefka Wechsler