DNV: Growing demand and bunker fuel uncertainties add to complexity of shipping’s decarbonisation

The global shipping industry is grappling with the dual challenge of increasing transport volumes and an urgent need to decarbonise, transforming its perception of environmental mandates from a threat to a significant opportunity, believes Jason Stefanatos, Global Decarbonization Director, DNV.

During his keynote presentation New Fuels in the Shipping Industry at the IBIA Annual Convention 2025 in Hong Kong on Tuesday (18 November) Stefanatos forecasted a consistent rise in all transport segments, creating a substantial hurdle for an industry such as shipping to reduce its carbon footprint.

While specific figures vary, the overarching trend points to growth, compelling stakeholders to seek innovative solutions. Initially viewed with apprehension, decarbonisation is increasingly seen as a chance for shipowners to differentiate, attract new cargo, and foster closer collaborations with customers.

The following were Stefanatos’ observations:

Fleet Readiness and Future Capacity

Currently, 8.9% of the global fleet is capable of burning alternative marine fuels, with liquified natural gas (LNG) holding the largest share due to its mature infrastructure and technology.

This figure, while seemingly small, represents significant progress in recent years. Looking ahead, the order book paints a more optimistic picture: over half of new vessels on order are designed with alternative fuel capabilities, signalling a substantial future shift.

However, this adoption is not uniform; segments like containerships, cruise liners, and car carriers show high uptake (75-80%), driven by end-users willing to pay a premium for greener products, while bulkers and tankers lag due to different commercial dynamics.

The Looming Fuel Supply Gap

By 2030, based on existing orders and continued ordering rates, the global fleet could theoretically have the capacity to burn nearly 50 million metric tonnes of alternative marine fuels annually. This represents a significant portion compared to the industry’s total annual consumption of 280 million tons.

Yet, a critical challenge emerges on the supply side: under current net-zero frameworks, shipping would require 30% to 60% of the global green fuel production to avoid penalties. This is a stark contrast to shipping’s current 3-4% share of the global energy mix, raising concerns about competition with other sectors and the industry’s ability to secure sufficient green fuel at competitive prices.

Navigating the Alternative Marine Fuels Landscape

There is no single “golden solution” for decarbonisation; each bunker fuel option presents a unique set of technological, economic, safety, availability, and greenhouse gas credentials. The industry is primarily focusing on four key solutions:

• LNG: The most mature alternative fuel, with over 1,300 non-LNG carrier vessels already capable of using it and a wide bunkering infrastructure. Its fossil nature and methane slip concerns remain key challenges, though it offers a pathway to renewable natural gas.
• Methanol: Valued for its simplicity as a liquid fuel, making port infrastructure development easier and cheaper than for gas fuels. While fossil methanol has worse emissions than Heavy Fuel Oil (HFO), green methanol can meet 2050 targets. Regional dynamics, such as China’s focus on green methanol production, are significantly influencing its uptake, particularly among bulk carriers trading in the region.
• Ammonia: A carbon-free molecule, offering the potential for actual zero emissions at the point of combustion. However, its well-to-wake emissions depend heavily on the production pathway, and engine technology is still in development, with major makers expected to deliver engines this or next year.
• Biofuels: Offers a “quick fix” with minimal retrofits for compliance. However, their scalability is severely limited by the availability of sustainable biomass, with shipping currently consuming only 0.6% of global biofuels, facing intense competition from road and aviation sectors. The need for flexible chains of custody and robust global certification schemes is crucial to accelerate adoption.

Uncertainty and the Call for Flexibility

“The path forward is marked by persistent uncertainty in regulations, supply chains, and technological advancements. Easy decision-making is not anticipated anytime soon,” concluded Stefanatos.

“Therefore, flexibility is paramount for shipowners, bunker suppliers, and fuel producers alike, recognising the complex interplay between production, distribution, and consumption in this evolving landscape.”

Photo credit: Manifold Times
Published: 26 November 2025