Alternative Fuel for Ships: The Complete Guide (2026)
- Dushyant Bisht
- Aug 12, 2024
- 27 min read
Updated: May 12
The shipping industry runs on fuel. For over a century, that fuel was heavy fuel oil. Today, that is changing fast.
Alternative marine fuels including LNG, methanol, ammonia, hydrogen, and biofuel are replacing conventional bunkers across the global commercial fleet. The shift is driven by three forces working simultaneously: the IMO's 2050 net-zero target, the EU ETS carbon cost that expanded to shipping in 2024, and FuelEU Maritime, which entered into force in January 2025.
In 2025 alone, shipowners ordered 590 alternative-fuel capable vessels totalling 45.5 million gross tonnes. The total orderbook now stands at 1,942 ships.
This guide covers every major alternative fuel option available in 2026, how they compare on cost, emissions, and infrastructure, and how to choose the right fuel for your fleet.
Quick Answer: Alternative marine fuels are fuels other than conventional heavy fuel oil (HFO) used to power commercial ships. The six main options are LNG, methanol, ammonia, hydrogen, biofuel, and RFNBO e-fuels. In 2025, shipowners ordered 590 alternative-fuel vessels totalling 45.5 million gross tonnes. No single fuel dominates the long-term outlook.
Why Shipping Needs Alternative Fuels Now
Shipping moves about 90% of world trade by volume. That makes it indispensable, and also one of the harder sectors to decarbonize. The industry accounts for roughly 2 to 3% of global greenhouse gas (GHG) emissions, and without intervention, that share is expected to grow as trade volumes increase.
Here is a useful way to frame the scale of the problem. A large container ship running on conventional heavy fuel oil burns roughly 200 tonnes of fuel per day. That is equivalent to filling approximately 1,400 family cars. Multiply that across a global commercial fleet of over 100,000 vessels, and the emissions picture becomes clear.
The International Maritime Organization (IMO), the UN body that regulates global shipping, has set a net-zero GHG emissions target for shipping by 2050. The revised 2023 GHG strategy adds checkpoints: 20 to 30% reduction from 2008 levels by 2030, and 70 to 80% reduction by 2040. Meeting those targets requires a wholesale shift away from fossil marine fuels.
The regulatory timeline
Four regulations now directly affect which fuel a shipowner can viably choose:
2020: IMO global 0.5% sulphur cap on marine fuel (MARPOL Annex VI) entered into force
2023: Carbon Intensity Indicator (CII) framework activated, rating vessels A through E on annual fuel efficiency
2024: EU Emissions Trading System (EU ETS) extended to shipping; vessels began paying for carbon allowances
2025: FuelEU Maritime entered into force, setting GHG intensity limits on energy used in EU waters
2026 (expected): IMO vote on the National Zero-emission Fuel (NZF) framework, delayed from earlier schedule
2030: IMO target for 5 to 10% of shipping energy to come from zero or near-zero emission fuels
2050: IMO net-zero target
This regulatory stack means that the decision to stay on HFO is no longer cost-neutral. Each layer adds either a direct carbon cost or an operational restriction.
The cost of staying on HFO
The financial consequences of inaction are concrete:
Under the EU ETS, ships calling at EU ports pay for verified carbon allowances. For a large container vessel making regular Europe calls, this adds millions of euros in annual compliance costs.
A vessel rated D on the CII for three consecutive years, or E for one year, must submit a corrective action plan and faces potential commercial restrictions.
Under the Poseidon Principles framework, banks representing approximately 80% of global ship finance are now measuring and publishing portfolio carbon intensity. Vessels with high carbon intensity face higher financing costs or restricted access to refinancing.
The pressure is not purely regulatory. Cargo owners, particularly large retailers and manufacturers with their own net-zero commitments, are actively directing freight toward lower-emission vessels. This "pull" from cargo owners is one reason container ships adopted alternative fuels faster than bulk carriers or tankers.
The Six Main Alternative Fuels for Ships
LNG (Liquefied Natural Gas)
LNG is natural gas cooled to approximately -162°C until it liquefies, reducing its volume by about 600 times. It is currently the most commercially mature alternative marine fuel by a significant margin.
How it is produced: Primarily from natural gas extraction (grey LNG). Bio-LNG is produced from biomethane derived from organic waste. e-LNG is produced from green hydrogen and captured CO2.
Emissions reduction: LNG reduces CO2 emissions by approximately 20 to 25% compared to HFO on a Tank-to-Wake basis. The critical caveat is methane slip: unburned methane escaping the combustion process. Methane is roughly 80 times more potent than CO2 over a 20-year period, and methane slip can erode most of LNG's climate advantage on a full Well-to-Wake lifecycle basis.
Technology Readiness Level (TRL): 9 (fully commercial). As of 2025, 235 ports offer LNG bunkering globally (Wärtsilä), and Singapore's LNG bunker volumes grew more than fourfold year-on-year in 2024.
Limitation: Fossil origin limits long-term decarbonization potential. Methane slip must be addressed for LNG to remain relevant beyond 2030 without transitioning to bio-LNG or e-LNG.
Current orderbook: 1,259 of the 1,942 alternative-fuel vessels on order as of January 2026 are LNG-capable, per Lloyd's Register analysis of Clarkson data.
Methanol
Methanol is a liquid alcohol fuel at ambient temperature and pressure, which makes it easier to store and handle than cryogenic LNG or highly toxic ammonia.
How it is produced: Grey methanol from natural gas. Blue methanol from natural gas with carbon capture. Green methanol from biomass or from CO2 captured directly from the air, combined with green hydrogen. Maersk and CMA CGM have collectively ordered over 100 methanol-fueled vessels, with Maersk alone set to operate nearly 20 methanol dual-fuel vessels by end of 2025.
Emissions reduction: Green methanol is nearly carbon-neutral on a lifecycle basis. Grey methanol still produces significant emissions. The color of the molecule determines the actual climate benefit.
TRL: 8 (quasi-commercial). Dual-fuel methanol engines have accumulated over 1.5 million operating hours as of 2025 per Frontiers research.
Limitation: Energy density is roughly half that of HFO at 20 MJ/kg versus 40 MJ/kg. Ships need larger fuel tanks, which reduces cargo capacity. Green methanol supply chains are still being built; availability at scale remains the primary constraint.
Ammonia
Ammonia (NH3) produces no carbon dioxide when burned. This makes it one of the most discussed long-term solutions for deep-sea shipping decarbonization.
How it is produced: Grey ammonia from natural gas without carbon capture. Blue ammonia from natural gas with CCS. Green ammonia from green hydrogen and nitrogen, via the Haber-Bosch process powered by renewable electricity.
Emissions reduction: Zero CO2 at combustion when burned cleanly. Well-to-Wake emissions depend entirely on production method: green ammonia achieves near-zero lifecycle emissions.
TRL: 5 (engineering verification). The Wärtsilä 25 Ammonia engine received its first type approvals from classification societies in 2025. IMO IGF Code amendments to formally permit ammonia as a marine fuel were still in draft as of early 2026.
Limitation: Ammonia is highly toxic at concentrations of 15 to 25 ppm and corrosive to certain metals and seals. It requires specialist handling equipment, emergency detection systems, and crew trained to strict protocols. Bunkering infrastructure is limited to a handful of trial ports.
Current orderbook: 45 ammonia-capable vessels on order as of January 2026 (LR/Clarkson data).
Hydrogen
Hydrogen (H2) has the highest energy content by mass of any fuel at 120 MJ/kg, and produces only water vapor when used in a fuel cell.
How it is produced: Grey hydrogen from natural gas. Blue hydrogen from natural gas with CCS. Green hydrogen from water electrolysis powered by renewable electricity: the only variant with near-zero lifecycle emissions.
Emissions reduction: Zero at combustion (fuel cell). WtW emissions depend entirely on production method.
TRL: 5 (engineering verification). Commercial deployments to date concentrate in short-sea routes: the MF Hydra liquid-hydrogen ferry has been operating in Norway since 2023, and the Sea Change vessel entered public passenger service in San Francisco in July 2024.
Limitation: Hydrogen's volumetric energy density is very low even when compressed or liquefied. Liquid hydrogen requires storage at -253°C, demanding cryogenic tanks that add significant weight and cost. Bunkering is only viable where a shipowner controls both ends of the route.
Current orderbook: 53 hydrogen-capable vessels on order, concentrated almost entirely in the passenger ferry and harbor craft segments.
Biofuel
Biofuel is the only true drop-in alternative currently available: it can be blended with conventional marine diesel and used in existing engines without modification, at least at lower blend ratios.
Main types:
FAME (Fatty Acid Methyl Ester): produced from vegetable oils or animal fats
HVO (Hydrotreated Vegetable Oil): produced from waste oils and fats; cleaner burning than FAME
Emissions reduction: Variable, depending on feedstock and production method. HVO from waste feedstocks achieves 60 to 90% lifecycle emission reductions versus HFO. FAME from crop-based sources is less advantageous due to land-use impacts.
TRL: 9 (fully commercial at low blend ratios). Singapore, the world's largest bunkering port, now allows deliveries of up to B30 (30% biofuel blend) without separate approvals, with B100 pilots underway. ISO 8217:2024 updated standards for fuels containing FAME.
Limitation: Feedstock availability limits scale. The total supply of sustainable biofuel is finite and contested across aviation, trucking, heating, and maritime sectors. Cost competitiveness varies significantly by region and feedstock source.
Current orderbook: 22 biofuel-capable vessels on order as of January 2026.
RFNBO E-fuels
RFNBO (Renewable Fuels of Non-Biological Origin) are synthetic fuels, primarily e-methanol, e-ammonia, and e-LNG, produced from certified green hydrogen combined with CO2 or nitrogen. The key distinction from bio-based fuels is the energy source: these fuels are powered by renewable electricity rather than biological feedstocks.
Under FuelEU Maritime, RFNBO fuels earn a 2x compliance multiplier in the early years of the regulation, making them particularly valuable for meeting GHG intensity targets.
Limitation: As of 2025, only 4% of green hydrogen-derived projects have reached a final investment decision, and only 1% are operational (DNV Maritime Forecast to 2050).
Commercial e-fuel deployment for maritime is expected to become feasible in 2027 to 2028 for early movers. The paperwork (proving renewable electricity origin, green hydrogen certification, chain of custody) is as complex as the molecules themselves.
Side-by-Side Comparison: Energy, Emissions, Cost, Readiness
The master fuel comparison table
Fuel | Energy density (MJ/kg) | Daily consumption (60 MW ship) | WtW CO2 reduction vs HFO | Bunkering ports (approx.) | Daily fuel cost range | TRL | Green variant available |
HFO (baseline) | ~40 | ~170 t/day | — | Global | ~$75,000–$120,000 | 9 | No |
LNG | ~50 | ~189 t/day | 15–25% (grey); up to 90%+ (bio-LNG) | 235+ | ~$94,000–$188,000 | 9 | Bio-LNG, e-LNG |
Methanol | ~20 | ~471 t/day | Up to 95% (green) | ~50 (growing) | ~$165,000–$259,000 | 8 | Green methanol |
Ammonia | ~18.6 | ~507 t/day | Near zero (green) | <10 (trial) | ~$203,000–$406,000 | 5 | Green ammonia |
Hydrogen | ~120 | ~79 t/day | Near zero (green) | <5 (shortsea only) | Very high ($3,500–$6,000/t green H2) | 5 | Green hydrogen |
HVO biofuel | ~34 | ~200 t/day | 60–90% (waste feedstock) | Growing (B30 at major ports) | Moderate-high | 9 | Inherently bio-based |
RFNBO e-fuels | Varies by type | Varies | Near zero | <5 (pilot stage) | Very high | 4–5 | Inherently renewable |
Daily consumption figures based on Ship & Bunker analysis for a 60 MW vessel using fuel cell propulsion at 55% efficiency. Daily cost ranges are indicative mid-2025 market data.
Reading the Well-to-Wake number
The CII rating that ships must report to the IMO uses a Tank-to-Wake (TtW) calculation: it measures only the emissions from burning the fuel on board. This understates the actual climate impact of most fuels because it ignores the emissions produced in making and transporting the fuel.
Well-to-Wake (WtW) captures the complete lifecycle: from the energy source used to produce the fuel (Well-to-Tank) through to combustion on board (Tank-to-Wake). The distinction matters enormously.
Grey LNG, for example, looks reasonably clean on a TtW basis but performs much worse on a WtW basis once methane slip and upstream gas extraction emissions are counted. Green methanol looks similar to grey methanol on TtW but near-zero on WtW when produced from renewable sources.
IMO's Fuel Lifecycle Guidelines (2023) introduce Well-to-Wake factors for regulatory purposes, and FuelEU Maritime uses a WtW GHG intensity metric. Choosing a fuel based only on TtW performance risks locking into an asset that underperforms on future WtW-based regulations.
The color system cuts through this:
Grey: fossil-derived, no carbon capture, high lifecycle emissions
Blue: fossil-derived with carbon capture and storage (CCS), lower lifecycle emissions
Green: produced from renewable energy, near-zero lifecycle emissions
The Regulatory Framework Driving Fuel Choices
IMO 2050 GHG strategy
The IMO's revised 2023 GHG strategy is the anchor document. Its targets:
At least 20% reduction in GHG emissions from shipping vs 2008 levels by 2030 (aiming for 30%)
At least 70% reduction by 2040 (aiming for 80%)
Net-zero by 2050 "around" that date
Operationally, the 2030 checkpoint requires 5 to 10% of shipping energy to come from zero or near-zero emission fuels. The IMO's National Zero-emission Fuel (NZF) framework, which would set binding fuel GHG intensity standards, was expected to be adopted in 2025 but was delayed to a vote in October 2026.
FuelEU Maritime
In force from 1 January 2025, FuelEU Maritime sets annual GHG intensity limits on the energy used aboard ships of 5,000 GT or more operating in European waters. Limits tighten every five years toward 2050. Ships that miss the annual target face a compliance deficit that must be pooled with other vessels or paid as a penalty.
RFNBO e-fuels earn a 2x multiplier credit between 2025 and 2033, meaning one unit of e-fuel counts as two units of compliance energy. This makes e-methanol and e-ammonia commercially attractive despite their high cost, specifically for operators with large EU exposure.
EU ETS and CII ratings
The EU ETS expanded to shipping from January 2024. Vessels must surrender carbon allowances for verified GHG emissions on voyages to, from, and between EU ports. The phase-in is graduated: 40% of emissions in 2024, 70% in 2025, 100% from 2026. Carbon allowance prices fluctuate; as of 2025 they were broadly in the range of €50 to €70 per tonne CO2, adding meaningful per-voyage costs for high-emission vessels.
The CII framework rates vessels annually from A (most efficient) to E (least efficient). A vessel rated D for three consecutive years, or E for one year, must submit a Ship Energy Efficiency Management Plan Part III and faces potential restrictions from port state control inspectors. Alternative fuels with lower direct emissions improve CII scores; however, under current TtW measurement rules, grey methanol and grey ammonia offer limited CII benefit.
Regulation-to-fuel compliance map
Regulation | LNG (grey) | LNG (bio) | Green methanol | Green ammonia | HVO biofuel | RFNBO e-fuels |
IMO CII (TtW basis) | Partial | Good | Good | Full | Good | Full |
IMO WtW GHG strategy | Conditional | Good | Full | Full | Good | Full |
FuelEU Maritime | Conditional | Good | Good | Full | Good | Full + 2x credit |
EU ETS cost reduction vs HFO | Partial | Strong | Strong | Full | Strong | Full |
Conditional = requires methane slip controls. Partial = benefit is limited by lifecycle emissions.
Bunkering Infrastructure: Where Each Fuel Is Available Today
Fuel availability at the ports a vessel actually calls is the single most practical constraint on fuel choice. A ship committed to green methanol but unable to bunker on its primary trading route has a serious operational problem.
LNG bunkering network
LNG has the most developed alternative fuel bunkering infrastructure by a wide margin. As of 2025, 235 ports globally offer LNG bunkering (Wärtsilä data), covering all major trading regions. Singapore, the world's largest bunkering hub, saw its LNG bunker volumes grow more than fourfold year-on-year in 2024 (Britannia P&I). In 2025, 22 new LNG bunker vessels were added to the orderbook, further expanding supply capacity.
For deep-sea operators trading between major ports in Europe, East Asia, and North America, LNG bunkering coverage is now broadly sufficient for most trade lanes.
Methanol, ammonia, and hydrogen availability
Methanol: Approximately 50 ports currently offer some form of methanol bunkering, primarily in Europe and East Asia. Industrial methanol terminals at many major ports provide a foundation for maritime distribution, but dedicated marine bunkering infrastructure is still being built. Supply availability is improving faster than for ammonia or hydrogen, but green methanol specifically remains constrained by production capacity.
Ammonia: Commercial ammonia bunkering for ships does not yet exist at scale. Trials are underway at a handful of ports. DNV's Maritime Forecast to 2050 projects that commercial ammonia bunkering at key hubs could become feasible from 2027 to 2028, assuming regulatory frameworks are finalized and production capacity grows. The Global Maritime Forum notes that "a lack of commercial ammonia bunkering at key ports" is the primary barrier to adoption, not engine technology.
Hydrogen: Hydrogen bunkering is essentially route-specific. It works where a shipowner controls both the departure and arrival port, can establish a fixed bunkering routine, and operates in a segment (ferries, harbor craft) with bounded duty cycles. Deep-sea application remains constrained by hydrogen's volumetric energy density and the extreme complexity of cryogenic bunkering at open commercial ports.
Green shipping corridors
A green shipping corridor is a sea route where governments and port authorities at both ends commit to making zero or near-zero emission fuel available, creating demand certainty for fuel producers. The concept is designed to break the chicken-and-egg problem: fuel producers will not invest in bunkering infrastructure without committed vessel demand, and shipowners will not order alternative fuel vessels without confirmed bunkering.
The Clydebank Declaration, signed at COP26, established 14 green shipping corridors linking major port pairs. Examples include the Australia–Japan green hydrogen corridor and the California–Shanghai corridor. These corridors are important because they signal which alternative fuels will have public and regulatory support at specific port pairs, directly informing fuel strategy for operators on those routes.
How to Choose the Right Alternative Fuel for Your Vessel
This is the process most discussions skip. Understanding the fuels is only part of the decision. Here is a structured 6-step framework for reaching a defensible choice.
Step 1: Define your route and voyage profile Route length and port call frequency determine which fuels are physically viable. Short-sea routes (under 500 nautical miles with fixed ports) can support hydrogen or battery-electric. Deep-sea routes require high energy density fuels: LNG, methanol, and eventually ammonia. A vessel trading between Rotterdam and Singapore has different options than a Scandinavian ferry.
Step 2: Assess vessel type and size Container ships and car carriers adopted alternative fuels first, driven by cargo owner pressure. Bulk carriers and crude tankers remain largely "wait and see" as of 2026, sensitive to market cycles and without direct cargo owner pressure on fuel choice. A very large crude carrier (VLCC) owner faces different economics than a feeder container operator.
Step 3: Map bunkering availability on your key port pairs Before committing to a fuel, confirm that it can be bunkered at your three to five most frequent ports. LNG: check against the 235-port network. Methanol: check with port authorities directly; supply is growing but uneven. Ammonia and hydrogen: if these are not available at your key ports today, build in a timeline assumption of 2027 to 2029 at the earliest for commercial availability.
Step 4: Model total cost of ownership (TCO) over 15 years The fuel purchase price is only one component. Factor in vessel modification costs (dual-fuel engine premium: roughly 5 to 20% above conventional vessel cost depending on fuel type), additional safety equipment, crew training, potential cargo capacity reduction (methanol needs larger tanks), and the value of avoided EU ETS and CII penalty costs. At 2025 cost levels, green methanol and green ammonia are 3x or more the cost of HFO per unit of energy. But the regulatory value of lower emissions partially offsets this premium for EU-trading vessels.
Step 5: Assess compliance value under each applicable regulation Run your fleet's trading pattern against the FuelEU Maritime GHG intensity limit, your EU ETS exposure, and your current CII rating trajectory. A vessel on a primarily non-EU trade that is currently rated B on CII has different compliance urgency than an EU-intensive operator already at C and trending toward D. The compliance value of switching fuel differs materially by trading pattern.
Step 6: Decide between newbuild, retrofit, and fuel-ready design For newbuilds, specify dual-fuel capability for the fuel you want to operate on, plus a "fuel-ready" design for the fuel you expect to want in 10 years. A methanol dual-fuel vessel ordered today can be designed fuel-ready for ammonia. For existing vessels, evaluate the economics of retrofit: LNG retrofits became commercially attractive again in 2025 per LR's 2025 Engine Retrofit Report. Full ammonia or hydrogen retrofits on existing vessels remain technically complex and expensive.
Fuel match by vessel type
Vessel type | Best near-term fuel | Best long-term fuel | Retrofit viability | Lead time |
Container ship (deep-sea) | LNG or green methanol | Green ammonia | Methanol: good; Ammonia: complex | Now (methanol); 2027+ (ammonia) |
Bulk carrier | LNG or biofuel blend | Green ammonia | Biofuel: immediate; LNG: good | Now (biofuel); medium (LNG) |
Crude/product tanker | LNG or HVO blend | TBD (market watching) | Biofuel: immediate | Now (biofuel) |
Ferry (short-sea) | Hydrogen, battery, LNG | Hydrogen, battery | Hydrogen: route-specific | Now for fixed routes |
Offshore support vessel | LNG, battery hybrid | Hydrogen, ammonia | LNG: good | Now (LNG) |
Harbor craft / tug | Battery, hydrogen fuel cell | Hydrogen | Battery: straightforward | Now |
The 2026 Orderbook: What Shipowners Are Actually Choosing
Market data cuts through the speculation. According to Lloyd's Register analysis of Clarkson's data published in January 2026, the total alternative fuel capable orderbook stands at 1,942 ships with a combined tonnage of 294.7 million GT, representing 2.1% of the global fleet and orderbook tonnage.
2025 alternative fuel orderbook breakdown
Fuel type | Vessels on order | Share of alt-fuel orderbook | Leading segment | 2025 new orders |
LNG | 1,259 | 64.8% | Containerships, LNG carriers | 188 |
Methanol | 385 | 19.8% | Containerships, car carriers | 61 (down from 149 in 2024) |
LPG | 139 | 7.2% | LPG carriers | 24 |
Ethane | 55 | 2.8% | Ethane tankers | Limited |
Hydrogen | 53 | 2.7% | Ferries, harbor craft | 13 |
Ammonia | 45 | 2.3% | Various | 6 |
Biofuel | 22 | 1.1% | Various | Limited |
Nuclear | 4 | 0.2% | Specialist | Exploratory |
Source: Lloyd's Register analysis of Clarkson data, January 2026.
Total 2025 orders for alternative-fuel vessels came in at 590, down 47% year-on-year from an exceptional 2024, mirroring a broader market-wide newbuild slowdown. Within the container segment, alternative fuels dominated the 2025 order mix, with approximately 58% LNG and 6% methanol by tonnage.
Why container ships lead adoption
Container shipping's faster adoption of alternative fuels comes down to customer pressure. Major cargo shippers, including large global retailers and manufacturers, have made public net-zero commitments and actively specify low-emission vessels when booking freight. This gives containership owners a commercial reason to invest in cleaner fuels independent of regulatory compliance.
Bulk carriers and crude oil tankers, by contrast, operate in more commoditized markets where cargo owners rarely specify environmental criteria. In these segments, the calculus is driven almost entirely by regulation and capital cost, and the dominant response as of 2026 is "wait and see." DNV's Global Decarbonization Director noted in January 2026 that this reflects a preference for "scalable solutions and targeted energy efficiency measures that can be adapted as policy and market conditions evolve."
Safety and Crew Training for Alternative Fuels
This dimension receives less coverage than it deserves. Alternative fuels are not simply cleaner versions of HFO. Some are toxic, some are cryogenic, some have flammability ranges far wider than conventional fuel. Getting the safety protocols right is not optional: it is the prerequisite for commercial operation.
Ammonia safety protocols
Ammonia is acutely toxic. The OSHA workplace exposure limit is 25 ppm (parts per million). At 15 to 25 ppm, the smell becomes uncomfortable; at 300 ppm, it is immediately dangerous to life and health. A leak during bunkering at a port is a public safety event, not just a vessel incident.
Safe operation of ammonia-fueled ships requires:
Continuous gas detection systems covering engine rooms, bunkering stations, and enclosed spaces
Full self-contained breathing apparatus (SCBA) for all bunkering personnel
Emergency shutdown systems with automated valve closure on leak detection
Detailed emergency response procedures filed with the port authority before bunkering
Crew trained and drilled specifically on ammonia emergency response, above standard STCW requirements
The IMO's IGF Code (the safety code for ships using low-flashpoint fuels) currently covers LNG and methanol. Amendments to extend coverage to ammonia were in draft as of early 2026, with finalization expected in 2027. Until that framework is in force, ammonia operations proceed under interim guidelines.
Methanol and hydrogen risks
Methanol presents two hazards not obvious to crews familiar with conventional fuels. First, methanol burns with a nearly invisible flame in daylight, making a methanol fire extremely difficult to detect without purpose-built detection equipment. Second, methanol is absorbed through skin on contact, making standard fuel-handling PPE insufficient; gloves, eye protection, and face shields rated for methanol exposure are required.
Hydrogen presents different risks. Its flammability range in air is 4 to 75% by volume, compared to 0.6 to 7.5% for diesel vapor. This means a hydrogen leak is flammable across a much wider range of air-fuel ratios, making detection and ventilation systems critical. Liquid hydrogen requires storage at -253°C, close to absolute zero, creating cryogenic burn hazards for any personnel making contact with uninsulated surfaces or leaked fluid.
Training frameworks and certification
The skills gap is a real constraint on the pace of fuel adoption. In 2025, the Maritime Just Transition Task Force, with contributions from Lloyd's Register, published the industry's first training frameworks specifically covering alternative fuel operations for both seafarers and shore-based personnel. These are designed as blueprints for eventual mandatory standards under STCW (the Standards of Training, Certification and Watchkeeping convention).
Lloyd's Register and Green Marine now offer training and consultancy programs specifically covering methanol and LNG operations. Classification societies, including DNV, which acquired CyberOwl and expanded its advisory capabilities, are developing competency assessment frameworks for ammonia and hydrogen.
The workforce dimension matters for shipowners making fuel decisions now. A vessel that is technically ready to operate on ammonia in 2027 is only operationally ready if the crew has been trained, certified, and drilled to the correct standard. Building that pipeline takes 18 to 24 months.
What the Fuel Transition Looks Like by 2030 and 2050
The near-term outlook (2026 to 2030)
DNV's Maritime Forecast to 2050 projects that with the current alternative-fuel orderbook, the global alternative-fuel capable fleet will nearly double between 2024 and 2028. Total potential alternative fuel consumption by the global fleet could reach approximately 50 million tonnes of oil equivalent (Mtoe) by 2030, with LNG leading, followed by methanol, LPG, ammonia, and hydrogen.
Bio-LNG has significant near-term potential as a transitional molecule. The large and growing fleet of dual-fuel LNG vessels can switch from fossil LNG to bio-LNG or e-LNG without vessel modification, potentially using mass-balance accounting across existing LNG infrastructure rather than requiring separate supply chains. DNV estimates this could save up to 0.55 Mtoe of energy annually within the EU alone.
Methanol is gaining commercial traction faster than most analysts expected three years ago. The Maersk fleet expansion and CMA CGM ordering activity have created real-world operating experience that is bringing down the knowledge and cost barriers.
Ammonia and hydrogen remain early-stage at commercial scale. Of green hydrogen-derived fuel projects tracked by DNV, only 4% have reached a final investment decision and only 1% are operational as of 2025. Commercial e-fuel deployment for maritime is expected to become feasible for early movers from 2027 to 2028, but "early mover" quantities will be small relative to global fleet demand.
The long-term scenario (2030 to 2050)
No single fuel is expected to dominate shipping's long-term energy mix. The Global Maritime Forum states this explicitly: "There is no single fuel that will decarbonise shipping on its own."
The most likely long-range scenario, drawing on LR, DNV, and academic research:
LNG plus bio-LNG/e-LNG continues to dominate through 2030 and into 2035 for vessels already equipped
Green methanol scales steadily through 2030 to 2040, constrained by carbon sourcing for truly green production
Green ammonia becomes the dominant deep-sea fuel candidate post-2035, as infrastructure matures and production costs fall
Hydrogen stays primarily in short-sea, ferry, and port vessel segments
Biofuels serve as a bridge and supplement, particularly for bulk/tanker segments slower to commit to infrastructure-intensive fuels
Wind-assisted propulsion (rotor sails, kite sails) complements fuel choices as a consumption reduction technology, with adoption approaching a commercial tipping point per LR's August 2025 analysis
The IMO's mid-term measures, whichever final form they take in 2026, will set the investment signal that unlocks the larger fuel transition. Fleet orders placed in 2026 to 2028 will be operating until 2046 to 2048: close to the 2050 deadline. Those decisions are being made now, under significant regulatory uncertainty, and with capital commitments running into the tens of billions of dollars across the industry.
Frequently Asked Questions
What are the main alternative fuels for ships?
The six main alternative marine fuels are LNG (Liquefied Natural Gas), methanol, ammonia, hydrogen, biofuel (primarily FAME and HVO), and RFNBO e-fuels such as e-methanol and e-ammonia. Each suits different vessel types, trade routes, and investment timelines. LNG is the most commercially deployed today. Green ammonia and green hydrogen have the strongest long-term decarbonization potential but face significant infrastructure and cost barriers.
What is the cleanest fuel for shipping right now?
On a lifecycle basis, green ammonia and green hydrogen produce near-zero emissions from production through combustion. Green methanol is nearly carbon-neutral when produced from renewable sources. Among fuels available at commercial scale today, HVO biofuel from waste feedstocks offers 60 to 90% lifecycle emission reductions versus HFO and is usable in existing engines. The key is always the production pathway: grey variants of ammonia, methanol, and hydrogen can be worse than LNG on a Well-to-Wake basis.
What is methane slip and why does it matter for LNG?
Methane slip refers to unburned methane that escapes the combustion process in LNG engines and enters the atmosphere. Methane has a global warming potential roughly 80 times higher than CO2 over a 20-year period. Even small amounts of methane slip can offset a significant portion of the CO2 reduction advantage that LNG has over HFO. Two-stroke slow-speed engines have much lower methane slip than four-stroke engines, which is one reason vessel type matters when evaluating LNG's actual climate performance.
Is LNG a good long-term fuel for shipping?
LNG is the best commercially available alternative fuel today for most deep-sea applications. It has proven engine technology, a developed global bunkering network, and a substantial orderbook. However, its fossil origins and the methane slip problem limit its long-term alignment with the IMO's 2050 net-zero target. The practical bridge is bio-LNG and e-LNG, which use the same vessel equipment but reduce lifecycle emissions dramatically. Operators ordering LNG dual-fuel vessels today are, in effect, ordering flexibility: the fuel can transition to bio-LNG or e-LNG without engine modification.
What is FuelEU Maritime and how does it affect fuel choice?
FuelEU Maritime entered into force on 1 January 2025. It sets annual GHG intensity limits (measured on a Well-to-Wake basis) on the energy used aboard ships of 5,000 GT or more operating in EU waters. The limits tighten progressively toward 2050. Ships that exceed the annual limit must either pool compliance with other vessels or pay a penalty. RFNBO e-fuels earn a 2x compliance multiplier between 2025 and 2033, making them disproportionately valuable for operators with heavy EU exposure despite their higher purchase cost.
What is a dual-fuel engine?
A dual-fuel engine is designed to operate on two different fuel types: typically a conventional fossil fuel (HFO or marine diesel) as a backup or blending option, and an alternative fuel as the primary. Dual-fuel LNG engines, for example, can switch between LNG and HFO depending on availability and cost. Methanol dual-fuel engines work similarly. The dual-fuel design provides operational flexibility during the period when alternative fuel bunkering infrastructure is still developing, which is most of the current decade.
How dangerous is ammonia as a ship fuel?
Ammonia is significantly more hazardous than any currently used marine fuel. It is toxic at concentrations above 25 ppm (the workplace exposure limit), causing respiratory damage and, at higher concentrations, being immediately dangerous to life. It is also corrosive to copper, zinc, and certain aluminum alloys used in marine systems, requiring purpose-designed engine components and pipework. Safe operation requires continuous gas detection, emergency shutdown systems, specialized PPE for all bunkering personnel, and crew trained specifically to ammonia emergency protocols. The IMO IGF Code does not yet formally cover ammonia; interim guidelines are in use pending amendment finalization expected in 2027.
What does Well-to-Wake mean?
Well-to-Wake (WtW) is a lifecycle assessment methodology that measures total greenhouse gas emissions from a fuel's production source all the way through to combustion on board a vessel. It includes upstream emissions from extraction or manufacturing, transport, and liquefaction (Well-to-Tank), plus combustion emissions (Tank-to-Wake). The contrast matters because a fuel that appears clean at combustion may have significant upstream emissions. FuelEU Maritime uses a WtW GHG intensity metric, which means selecting a fuel based only on combustion emissions risks underestimating true regulatory exposure as more regulations shift to WtW measurement.
Can biofuels be used in existing ships without modification?
Yes, at appropriate blend ratios. FAME and HVO biofuels are drop-in fuels compatible with most existing marine diesel engines at blend ratios up to B30 (30% biofuel, 70% conventional fuel) and, in some cases, at higher ratios after engine assessment. Singapore now permits B30 deliveries without separate approval and is running B100 pilots. At higher blend ratios, shipowners should consult the engine manufacturer and review ISO 8217:2024 fuel standards for FAME-containing blends. This makes biofuel the most accessible near-term emissions reduction option for owners of conventionally fueled vessels who are not yet ready to commit to a new-fuel newbuild.
How many alternative fuel ships are on order in 2026?
According to Lloyd's Register analysis of Clarkson data published in January 2026, the total alternative fuel capable orderbook stands at 1,942 vessels totalling 294.7 million GT. The breakdown by fuel: 1,259 LNG-capable, 385 methanol, 139 LPG, 55 ethane, 53 hydrogen, 45 ammonia, 22 biofuel, and 4 nuclear. In 2025 alone, 590 new alternative-fuel vessels were ordered totalling 45.5 million GT, maintaining strong momentum despite a broader 47% year-on-year decline in total global newbuild orders.
What is a green shipping corridor?
A green shipping corridor is a specific sea route where governments and port authorities at both ends make binding commitments to provide zero or near-zero emission fuel supply, creating the demand certainty needed to justify fuel production investment. The concept addresses the classic chicken-and-egg problem in alternative fuel adoption: fuel producers need committed buyers before investing in infrastructure, and shipowners need confirmed fuel supply before ordering alternative-fuel vessels. The Clydebank Declaration, signed at COP26 in 2021, established 14 green shipping corridors between major global port pairs, covering routes from Asia-Pacific to Europe, and from the Americas to East Asia.
What is the cheapest alternative fuel for ships right now?
LNG is the most cost-competitive alternative fuel currently available, with market prices ranging from approximately $500 to $1,000 per tonne, making daily fuel costs for a large vessel roughly $94,000 to $188,000 (Ship & Bunker comparative analysis). Green methanol costs more per unit of energy, with daily costs in the $165,000 to $259,000 range. Green ammonia and green hydrogen are more expensive still, at $203,000 to $406,000 per day for ammonia at current production costs. HVO biofuel sits at a moderate premium over conventional HFO but below the cost of green methanol. As production scales up and the green hydrogen supply chain develops, ammonia costs are expected to fall meaningfully by 2030 to 2035.
Glossary of Alternative Fuel Terms
Term | Definition |
Ammonia (NH3) | A nitrogen-hydrogen compound used as a zero-carbon marine fuel when burned. Highly toxic above 25 ppm. Produced as grey, blue, or green depending on the production method and carbon capture used. |
Biofuel | Fuel produced from biological feedstocks. FAME and HVO are the primary marine biofuel types, used as blends with conventional marine diesel. |
Bio-LNG | LNG produced from biomethane, itself derived from organic waste feedstocks. Achieves near-zero lifecycle emissions when produced from waste sources and can be used in LNG-fueled vessels without modification. |
Blue fuel | Any fuel (e.g. blue hydrogen, blue ammonia, blue methanol) produced from fossil fuels in combination with carbon capture and storage (CCS). Lower lifecycle emissions than grey, but not zero-emission. |
Bunkering | The process of supplying fuel to a vessel. Bunkering infrastructure availability at key ports is a primary practical constraint on alternative fuel adoption. |
CII (Carbon Intensity Indicator) | An IMO annual rating framework active since 2023 that grades vessels A through E on fuel efficiency. A vessel rated D for three consecutive years, or E for one year, must submit a corrective action plan. |
Clydebank Declaration | A commitment signed by 22 countries at COP26 (2021) to establish at least six green shipping corridors by 2025 and support their development through the 2030s. Fourteen corridors have since been designated. |
Drop-in fuel | A fuel compatible with existing engines without vessel modification, at appropriate blend ratios. HVO and FAME are drop-in alternatives to conventional marine diesel. |
Dual-fuel engine | A marine engine capable of operating on two fuel types, typically a conventional fossil fuel as a backup and an alternative fuel as the primary. Provides operational flexibility during the transition period. |
e-fuel (e-methanol, e-ammonia, e-LNG) | Synthetic fuels produced from green hydrogen combined with CO2 or nitrogen, powered by renewable electricity. Also called power-to-X or electrofuels. |
EU ETS (Emissions Trading System) | The European Union's carbon market, extended to shipping from January 2024. Ships must surrender carbon allowances proportional to their verified GHG emissions on EU-related voyages. |
FAME (Fatty Acid Methyl Ester) | A biofuel produced from vegetable oils or animal fats through transesterification. A common marine biofuel blend component, covered by ISO 8217:2024 standards. |
FuelEU Maritime | EU regulation in force from 1 January 2025 setting annual GHG intensity limits (on a Well-to-Wake basis) on the energy used aboard ships of 5,000 GT or more in EU waters. |
GHG (Greenhouse Gas) | Gases that trap heat in the atmosphere. In shipping, the primary GHGs are CO2 (carbon dioxide), CH4 (methane), and N2O (nitrous oxide). |
Green fuel | Any fuel produced from renewable energy sources with near-zero lifecycle greenhouse gas emissions. Examples: green hydrogen, green methanol, green ammonia, bio-LNG from waste. |
Green shipping corridor | A sea route where governments and port authorities at both ends commit to providing zero or near-zero emission fuel supply to enable commercial operations. |
Grey fuel | Any fuel produced from fossil fuels without carbon capture. Grey hydrogen, grey ammonia, and grey methanol are produced from natural gas and have high lifecycle emissions. |
HFO (Heavy Fuel Oil) | The dominant conventional marine fuel, a residual product of crude oil refining. High sulphur and carbon content; being phased out under MARPOL and IMO GHG regulations. |
HVO (Hydrotreated Vegetable Oil) | A renewable diesel produced from waste oils and fats via hydrotreatment. Drop-in compatible with existing diesel engines at high blend ratios; achieves 60 to 90% lifecycle emission reductions from waste feedstocks. |
Hydrogen (H2) | The lightest and most energy-dense fuel by mass (120 MJ/kg). Produces only water vapor when used in a fuel cell. Green hydrogen is produced by water electrolysis powered by renewable electricity. |
IGF Code | IMO International Code of Safety for Ships Using Gases or Other Low-flashpoint Fuels. Currently covers LNG and methanol. Amendments to cover ammonia are in progress, expected by 2027. |
LNG (Liquefied Natural Gas) | Natural gas cooled to approximately -162°C until it liquefies. The most commercially mature alternative marine fuel. 235+ ports offer LNG bunkering globally as of 2025. TRL 9. |
LPG (Liquefied Petroleum Gas) | A propane-butane blend stored under moderate pressure. Burns cleaner than HFO. Primarily used as self-fuel by LPG carriers; limited adoption by other vessel types. |
MARPOL Annex VI | The international convention regulating air pollution from ships, including sulphur oxide and nitrogen oxide limits, the Energy Efficiency Design Index (EEDI), and the CII framework. |
Methane slip | Unburned methane that escapes the combustion process in LNG engines and enters the atmosphere. Methane has approximately 80x the global warming potential of CO2 over 20 years, significantly reducing LNG's net climate benefit. |
Methanol | A liquid alcohol fuel at ambient temperature and pressure. Energy density roughly half that of HFO. Green methanol from renewable sources achieves near-zero lifecycle emissions. TRL 8. |
RFNBO (Renewable Fuels of Non-Biological Origin) | Synthetic fuels produced from certified green hydrogen. Earn a 2x compliance multiplier under FuelEU Maritime between 2025 and 2033. |
Tank-to-Wake (TtW) | A GHG measurement methodology covering only the combustion phase of fuel use, from the fuel tank on board through exhaust. Does not include upstream production emissions. The basis for IMO's current CII rating. |
TRL (Technology Readiness Level) | A scale from 1 to 9 measuring the commercial maturity of a technology. TRL 9 means fully commercial. LNG and biofuels are TRL 9; methanol TRL 8; ammonia and hydrogen TRL 5 for marine applications. |
Well-to-Wake (WtW) | A full lifecycle GHG assessment from the energy source used to produce a fuel (Well-to-Tank) through combustion on board (Tank-to-Wake). The basis for FuelEU Maritime's GHG intensity metric. More complete than TtW alone. |
Wind-assisted propulsion | Technologies including rotor sails, kite sails, and rigid wing sails that supplement conventional propulsion using wind energy, reducing fuel consumption and GHG emissions. LR analysis (August 2025) indicates adoption is approaching a commercial tipping point. |
References
Lloyd's Register. "Alternative Fuel Review 2025." lr.org. January 2026.
Lloyd's Register. "Alternative-Fuelled Ship Orders Remain Significant in 2025." lr.org. January 7, 2026.
DNV. "LNG-fuelled Container Ships Sustain Alternative Fuel Share of Global Orderbook." dnv.com. January 2026.
DNV. "Net-zero Shipping: Key Findings from the Latest Maritime Forecast." dnv.com. October 2025.
Global Maritime Forum. "Zero-emission Shipping Fuels: A Guide to Methanol and Ammonia." globalmaritimeforum.org. August 2025.
Frontiers in Marine Science. "Global Coordination and Challenges of Technical Standards and Application Specifications for Marine Clean Alternative Fuels." frontiersin.org. November 2025.
Ship & Bunker. "A Comparative Analysis of Alternative Fuels for Sustainable Maritime Shipping." shipandbunker.com. January 2025.
Wärtsilä. "Future Fuels in Shipping." wartsila.com. 2025.
Britannia P&I. "Alternative Fuels Update April 2025." britanniapandi.com. May 2025.
bound4blue. "Alternative Fuels in Shipping: The Guide." bound4blue.com. June 2025.
International Maritime Organization. "2023 IMO Strategy on Reduction of GHG Emissions from Ships." imo.org.
Ship Universe. "Alternative Fuel Race in 2026: Growth and Reality Checks." shipuniverse.com. December 2025.
ScienceDirect. "Review of the State-of-the-Art of Alternative Marine Fuels: A Viable Approach to Zero-Carbon Shipping." sciencedirect.com. June 2025.
Disclaimer: This article is for general informational purposes only and does not constitute technical, financial, legal, or regulatory advice. The alternative marine fuel sector is evolving rapidly, and specific fuel specifications, regulatory requirements, port availability, pricing, and technology readiness levels change frequently. Shipowners and operators should obtain independent technical assessments from qualified naval architects, classification societies, and legal counsel before making fuel strategy, vessel specification, or capital investment decisions. Neither the author nor the publisher accepts liability for decisions made based on information in this article. Regulatory information reflects the position as of May 2026 and may not reflect subsequent developments.
Dushyant Bisht
Expert in Maritime Industry
Dushyant Bisht is a seasoned expert in the maritime industry, marketing and business with over a decade of hands-on experience. With a deep understanding of maritime operations and marketing strategies, Dushyant has a proven track record of navigating complex business landscapes and driving growth in the maritime sector.
Email: [email protected]