Orders for methanol engines outperform LNG for the first time

  • January 29, 2024
  • News

Shipping’s rapid transition to alternative fuels took a substantial improvement last year with methanol-powered engine orders becoming the most popular choice.

According to the latest statistics from DNV’s Alternative Fuels Insight platform, the shipping industry is rapidly shifting towards alternative fuels. In 2023, methanol-powered engine orders surpassed orders for LNG and became the most popular choice for ships. The data shows a significant increase in orders for methanol-powered ships, with 138 orders in total, while LNG took second place with 130 orders.

In 2023, the use of methanol as a fuel saw a significant increase. 138 vessels (excluding methanol carriers) were ordered, which was quite a good number when compared to 35 ordered the previous year. The majority of the orders for vessels running on methanol were for containerships (106 orders), followed by bulk carriers with 13 orders and car carriers with 10 orders.

On the contrary, LNG, the second most popular alternative fuel, had a challenging year as it experienced a significant decline in orders. In 2023, only 130 vessels were ordered, down from 222 in the previous year.
However, LNG finally crossed the 1,000-vessel mark, excluding LNG carriers. The containers segment had the highest number of orders for chilled fuel, with 48 orders, followed by car carriers with 40 and tankers with 30. When considering only new builds, LNG would be in the lead, as a significant proportion of methanol orders were for retrofits.

The past year saw the first 11 orders for ammonia-fuelled vessels. Hydrogen, on the other hand, was not a popular choice, with only five orders compared to the previous year’s 18. Additionally, there was an 8% increase year-on-year in the number of ships with alternative fuel propulsion, with 298 ships ordered.

Investments in alternative-fuelled vessels have been largely driven by the surge in new container and car carrier construction over the past three years. It is unclear whether this trend will continue into 2024, according to Martin World, principal consultant in DNV’s Maritime Advisory business.

In the previous year, the shipping industry embraced methanol, with the order book for dual-fuelled methanol-powered ships now reaching 200 vessels, accounting for 8.3% of the global order book in gt terms, according to data from Clarksons’ newest Green Technology Tracker.

Steve Gordon, global head of Clarksons Research stated that 2023 was a significantly pivotal year in the shipping industry’s path towards decarbonization, with new regulations coming into force and a net zero commitment reached at IMO. This is only at the beginning of a critical and unprecedented fleet renewal investment program, but progress has been made, with 49% of the current order book tonnage now using alternative fuels.