The maritime sector is entering a pivotal decade. With the International Maritime Organization targeting a 20–30% emissions reduction by 2030 and net-zero by 2050, shipowners face one of the most complex investment landscapes in modern shipping. Today, 93% of the global fleet still operates on fossil fuels, according to DNV’s Maritime Forecast to 2050, while most newbuilds are being designed for fuel flexibility to address regulatory and market uncertainty. The transition has begun, but progress is uneven.
DNV’s Alternative Fuels Insight (AFI) database shows that 84% of vessels on order still rely on conventional fuels, and only 16% are capable of using alternative fuels. Within this shifting landscape, four candidates dominate the debate on shipping’s future energy mix.
LNG: A Transitional Option
Liquefied natural gas remains the most established alternative fuel. Its bunkering network is relatively mature, and it offers immediate reductions in SOx, NOₓ, and particulate emissions. AFI data confirms LNG’s continued popularity among dual-fuel orders.
Still, LNG’s long-term role appears limited. Methane slip—a potent greenhouse gas—and its dependence on fossil gas undermine its decarbonisation credentials. LNG engines come with higher capital costs, and operators may face stranded-asset risks under expanding carbon pricing. LNG remains a practical option for compliance today, but not a long-term climate solution.
Methanol: The Early Adapter
Methanol has become the early frontrunner, largely driven by the container sector. Major operators—such as Maers, COSCO and CMA CGM—have committed to methanol-powered fleets. Methanol-capable ships now represent around 5% of the global orderbook.
Methanol’s appeal lies in its handling advantages. It is liquid at ambient temperature and fits well within existing bunkering infrastructure. However, most methanol currently available is fossil-derived, and green methanol is costly and limited in supply. For now, methanol is most viable for operators with long-term fuel offtake agreements. Its long-term success depends on scaling renewable production.
Ammonia: A Longer-Term Prospect
Ammonia offers significant zero-carbon potential. Produced from green hydrogen and nitrogen, it generates no CO₂ when used as fuel. Yet it remains at an early stage, with only about 0.5% of vessels on order designed for ammonia.
The barriers are substantial: ammonia is toxic, corrosive, and demands entirely new safety protocols and bunkering systems. Production capacity is limited, and costs remain high. Realistically, ammonia may become viable after 2035, once hydrogen production and port infrastructure expand. For now, it remains a long-term candidate rather than a near-term commercial option.
Hydrogen: High Potential, Limited Practicality (For Now)
Hydrogen frequently appears in decarbonisation discussions, but its role in deep-sea shipping is still uncertain. When produced from renewable electricity, hydrogen can be a true zero-carbon fuel. It can also serve as a feedstock for other alternative fuels, including ammonia and synthetic methanol.
But in its pure form, hydrogen faces several challenges:
- Storage density: Hydrogen has very low volumetric energy density. Even when compressed or liquefied at –253°C, fuel tanks are far larger than conventional fuel systems, reducing cargo capacity.
- Infrastructure: Large-scale hydrogen bunkering is almost non-existent, with projects still in the planning phase.
- Cost and supply: Green hydrogen production remains limited and expensive, and scaling will depend on substantial renewable energy capacity.
- Use cases: Hydrogen is more suited to short-sea vessels, ferries, and pilot projects where refuelling is frequent and infrastructure can be centralised.
The future of Hydrogen
Hydrogen’s long-term role will likely be indirect—primarily as a building block for other fuels—until technological and infrastructure gaps narrow. It remains a fuel with high theoretical potential but limited practical readiness for deep-sea shipping today.
Efficiency First
Across LNG, methanol, ammonia, and hydrogen, one conclusion remains clear: no single fuel has emerged as the definitive solution. For this decade, efficiency offers the most reliable and cost-effective path to emissions reduction. DNV estimates that operational and technical efficiency measures alone could cut emissions by 4–16% by 2030—equivalent to approximately 120 million tonnes of CO₂.
Looking further ahead, shipping’s cost per tonne-mile could rise by 69–112% by 2050 as new fuels and compliance mechanisms reshape fleet economics. Owners who invest early in efficiency technologies, dual-fuel designs, and future-ready configurations will be better positioned to adapt as the fuel landscape evolves.
A Multi-Fuel Future
Shipping’s energy transition will not be defined by one fuel. Instead, the sector is moving toward a multi-fuel landscape shaped by geography, vessel type, regulation, and supply chains. In this environment, the most resilient approach combines:
- Availability and near-term efficiency gains
- Flexible, fuel-agnostic ship designs
- Strategic readiness for multiple energy pathways
The companies that act now—reducing emissions while preparing for a broader fuel transition—will be best positioned to navigate the evolving energy landscape.