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LNG shipbuilding industry heading to huge oversupply, says SFOC

SFOC report finds a massive oversupply of LNG shipping capacity is being planned well into the future – an increase of 16 million cubic metres of planned shipping capacity since last year’s report.

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A new analysis released by Solutions for Our Climate (SFOC) on Monday (14 October) found a massive oversupply of LNG shipping capacity is being planned well into the future – an increase of 16 million cubic metres of planned shipping capacity since last year’s report.

The analysis Still Adrift Updated assessment of the global energy transition’s impact on the LNG shipbuilding industry, by Climate Analytics and commissioned by SFOC, updates a report released last year, looking at the required – and planned – shipping capacity for future LNG trade under the International Energy Agency scenarios. 

The study was undertaken in light of the International Energy Agency’s (IEA) consistent, downward, revision of global fossil gas demand projections under its most conservative scenario, one that reflects current policies and private sector momentum with no increase in climate ambition, and which finds that global gas demand peaks in 2030, at the latest.

“No new LNG carriers are needed in any scenario, including both the IEA’s 2023 Net Zero Emissions (NZE) pathway, which aligns with the globally agreed goal of limiting temperature increase to 1.5°C, and the more conservative Stated Policies Scenario (STEPS), that reflects policies already adopted by governments,” said report lead author, Climate Analytics energy analyst Thomas Houlie.

“While the International Energy Agency shows no role for fossil gas in the global energy transition, the LNG shipbuilding industry appears to be heading in the opposite direction, which could be to the detriment of everybody involved in the industry.” 

In 2025 and 2026, 180 carriers with a total of 32 million cubic metres (m3) of shipping capacity are projected to be delivered – 28% of the capacity in operation in 2023. While there were 64 orders for LNG carriers in 2023, the first five months of 2024 alone saw 55 new orders placed and since the report’s cutoff date of May 2024, another 27 have been added. 

Even under the IEA’s more conservative, STEPS scenario, aligned with policies already adopted by governments, an oversupply of LNG shipping capacity is still evident. This excess capacity exists even now and is projected to grow. By 2030, the surplus  is expected to grow to 40% beyond what is required of the industry’s operating capacity – the equivalent of 275 modern carriers.

“As the energy transition accelerates at an unprecedented pace, investing in fossil fuel transport capacity represents not just a risky and shortsighted gamble for investors, shipbuilders, and shipowners, but an imminent threat to their financial stability,” said Dongjae Oh, Head of Gas at SFOC. 

“The LNG shipping industry is approaching a cliff edge of overcapacity, with the widespread looming issue of stranded assets. Every new carrier order pushes the industry closer to unsustainable oversupply. Stakeholders must act now to halt new orders or face severe economic consequences as the global shift away from fossil fuels renders these assets obsolete far sooner than anticipated,” Oh added.

The LNG carrier shipbuilding industry has experienced an intense influx of orders for ships to be delivered later in the decade. The glut of new LNG carriers coming online in the near future will push the market into oversupply, risking stranded assets and locking in capital for purposes at odds with the global energy transition. 

LNG shipbuilding industry heading to huge oversupply, says SFOC

Figure 1: Projected needed liquefied natural gas trade in the 2023 WEO scenarios, compared with the shipping capacity available.

Two countries will build the overwhelming majority of LNG carriers to come online: China, and South Korea, with the latter taking up the vast majority of the industry. 

SFOC’s Oh noted:  “While the construction of fossil-fuel related vessels has been a recent, and worrying, trend, South Korea is well-positioned to pivot towards renewable energy shipbuilding. With its existing expertise and robust supply chain, the country could capitalise on growing demand in the clean energy sector by manufacturing vessels like wind turbine installation ships. This transition aligns with global sustainability trends and offers a promising direction for the Korean shipbuilding industry to decouple from the declining fossil fuel industry.”

 

Photo credit: Chris Pagan on Unsplash
Published: 15 October, 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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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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