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ENGINE on The Week in Alt Fuels: Why FuelEU’s first decade matters

First 10 years of FuelEU will provide a window of opportunity to explore alternative bunker fuels and technologies ahead of stricter regulations, according to ENGINE.

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ENGINE on The Week in Alt Fuels: Why FuelEU’s first decade matters

The first 10 years of FuelEU will provide a window of opportunity to explore alternative fuels and technologies ahead of stricter regulations.

This year has ushered in a new regulatory era for shipping with the debut of the FuelEU Maritime regulation. This is the EU’s first technical regulation aimed at reducing the greenhouse gas (GHG) intensity of maritime transport and promote adoption of low- and zero-emission bunker fuels.

Ships sailing between EU ports must cap the average well-to-wake (WtW) GHG intensity of onboard energy at 89.34 grams of carbon dioxide equivalent per megajoule (gCO2e/MJ) by 2030, and at 85.69 gCO2e/MJ by 2035. Those are 2% and 6% reductions from a 2020 baseline of 91.16 gCO2e/MJ.

These relatively modest targets provide shipowners with some breathing room to prepare for tightening requirements towards an 80% reduction by 2050.

To future-proof their fleets against more stringent targets, shipowners can invest in vessels that can consume fuels with low or zero GHG intensity. These include synthetic fuels such as e-methanol and e-ammonia – which the EU labels renewable fuels of non-biological origin (RFNBOs) – and they are incentivised through a regulatory multiplier available until 2034.

To qualify for the multiplier, a fuel’s GHG intensity must be lower than 70% of a reference value of 94 gCO2eq/MJ on a well-to-wake basis. 

When a ship uses an RFNBO as its primary fuel, the multiplier essentially halves the onboard GHG intensity of that fuel and leaves a greater “surplus intensity” compared to the GHG intensity target. This compliance surplus can then be used within a pool of vessels to improve the GHG intensity of vessels using conventional fossil fuels.

For example, a DNV study showed that one vessel running on 90% e-methanol (28.20 gCO2e/MJ) and 10% MGO (90.63 gCO2e/MJ) can be averaged out to make up to 55 MGO-fuelled ships/year compliant between 2025-2029. This number drops to 13 ships/year between 2030–2034.

Using 90% near-zero-emission e-methanol (2.47 gCO2e/MJ) with 10% MGO increases this ship’s capacity to cover the compliance of 64 other ships/year between 2025-2029, and 16 ships/year between 2030-2034.

Now, from a cost-to-cost standpoint, using RFNBOs is not immediately economical. For instance, the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS) has estimated e-methanol to cost $2,750/mt on a VLSFO-equivalent (mtVLSFOe) basis in 2025.

MMMCZCS estimates the potential value of the compliance surplus generated by an e-methanol-fuelled vessel in a pooling arrangement to $280/mtVLSFOe. This still leaves e-methanol far more expensive than VLSFO ($560/mt today), even after accounting for the FuelEU and EU ETS costs for consuming VLSFO.

MMMCZCS projects that RFNBOs will become more cost-competitive only after 2035, as fuel production costs decline and pooling values and VLSFO costs rise on rising regulatory penalties.

But as GHG intensity targets tighten and compliance surpluses decline, the ability to cover other vessels’ compliance through pooling will diminish.

This highlights the importance of early planning. These initial years provide shipowners with the opportunity to retrofit existing vessels, invest in newbuilds capable of running on low GHG intensity fuels, and collaborate with fuel suppliers to secure long-term offtake agreements in preparation for stricter targets.

In other news, the Maritime and Port Authority of Singapore (MPA) has announced concessions for ocean-going vessels using alternative fuels or technologies during port stays of up to four days. Vessels using zero-carbon fuels, including ammonia (with pilot fuel capped at 25% and ammonia slip addressed), B100 biofuel, or green methanol, will also receive a full port dues concession. Those using blends between B50 and B99 are eligible for a 30% concession, while blends ranging from B24 to B49 can avail a 20% concession.

Carbon dioxide (CO2) storage and transport firm Northern Lights has announced that the second of four CO2 carriers under construction at Chinese shipyards is now ready for delivery. Its first operational customer will be the German building materials supplier Heidelberg Materials.

By Konica Bhatt

 

Photo credit and source: ENGINE
Published: 6 January, 2025

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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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Alternative Fuels

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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