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UNCTAD: Decarbonising Shipping: What role for flag states?

Besides exercising regulatory control, it is suggested that flag states view the decarbonisation journey as a business opportunity while development funds are being established.

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United Nations Conference on Trade and Development (UNCTAD) on Tuesday (24 March) published an article discussing the role of flag states and possible strategies in the shipping industry’s decarbonisation efforts: 

The International Maritime Organization (IMO) member states agreed in 2018 “to reduce the total annual GHG emissions by at least 50% by 2050 compared to 2008” as part of the “initial IMO Strategy on reduction of GHG emissions from ships”.

In order to support achieving this objective, the International Chamber of Shipping (ICS) and other maritime industry associations propose the establishment of a research and development fund to help cut emissions.

This fund is to be financed by a contribution of “two US dollars per tonne of marine fuel oil purchased for consumption”. The private sector-led “Getting to Zero Coalition” writes that “shipping’s decarbonization can be the engine that drives green development across the world.”

The falling costs of net zero carbon energy technologies make the production of sustainable alternative fuels increasingly competitive. Determined collective action in shipping can increase confidence among suppliers of future fuels that the sector is moving in this direction.”

UNCTAD supports the Getting to Zero Coalition and promotes efforts to achieve sustainability, helping developing countries adapt and build resilience in the light of the climate emergency.

According to a working paper by the International Monetary Fund, “the environmental case for a maritime carbon tax is increasingly recognized”. The Environmental Defense Fund argues that “meeting the IMO’s 2050 target represents $50bn to $70bn per year for 20 years spending, but this is also a revenue opportunity”.

The World Bank, also a supporter of the Getting to Zero Coalition, highlights that a large share of this investment opportunity could lie in developing countries.

A large part of these investments will have to be made ashore, including by energy providers and in seaports. As regards ships, their owners will have to invest in the renewal of the fleet, and new technologies.

What does this mean for the flag states where the ships are registered?

Flag states have an important role to play in enforcing IMO rules because they exercise regulatory control (i.e. apply the law and impose penalties in case of non-compliance) over the world fleet on diverse issues, ranging from ensuring safety of life at sea, protection of the marine environment, and the provision of decent working and living conditions for seafarers.

In the context of the implementation of the IMO GHG emissions strategy, flag states will have to ensure that ships are compliant with applicable IMO rules.

In addition, they could also provide incentives for the ships registered under their flag to reduce CO2 emissions, and potentially play a role when it comes to ensuring the collection of future fees or contributions associated with CO2 emissions.

The above-mentioned ICS proposal, for example, suggests that contributions to the proposed fund will be made “commensurate with the ship’s annual fuel oil purchased for consumption, as verified by the flag State.”

Flag states could see such involvement also as a business opportunity, where more transparent and reliable flag states provide better services than others. In addition, many major flag states are themselves also affected by the impacts of climate change.

For example, the Panama Canal is confronted with a shortage of fresh water; Liberia has developed its National Adaptation Plan to mainstream climate change adaptation into planning and budgets; and the Marshall Islands are among the low-lying SIDS most at risk from sea-level rise.[i]

It should thus be in these countries’ self-interest to support the reduction of global green-house gas emissions, including from shipping.[ii]

Status of CO2 emissions: a vessel registry’s perspective

Thanks to data generated from the automatic identification system (AIS) tracking system for ships, including information on each vessel’s characteristics, speed, type of fuel, and ballast situation, it is today possible to calculate estimates for CO2 emissions from each individual ship.

On this basis, ships registered in Panama, Liberia and the Marshall Islands, together, accounted for almost one third (32.96%) of CO2 emissions from shipping in 2019 (Figure 1). The same registries together represent 34.86% of the world total gross tonnage (Table 1).


Photo credit: United Nations Conference on Trade and Development

Published: 26 March, 2020

 

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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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