Alternative Fueled Ships Gain Momentum with 50% Increase in Orders

The shipping industry continues to make strides in the transition to alternatively-fueled with a significant rise in orders for cleaner ships to start 2024.

According to DNV’s Alternative Fuels Insight (AFI) platform, March 2024 saw five new orders come in, including two each for methanol and ammonia-fueled ships, and one for an LNG-fueled vessel.

Despite the relatively quiet activity in March, the overall momentum is strong. In the first quarter of 2024, orders for alternative fueled vessels surged 50% over 2023, totaling 68 compared to 44 in the same period last year.

“While March’s order activity may not have matched the high volumes seen in January and February, the bigger picture is decidedly positive,” said Jason Stefanatos, Global Decarbonization Director at DNV. “The exponential year-on-year growth for new orders in Q1 shows that the alternative-fueled fleet is expanding rapidly.”

Stefanatos also highlighted the considerable expansion of the LNG fleet, which has more than doubled since 2021, exceeding 500 operational ships. He said the methanol orderbook also signals potential similar growth over the next half-decade.

Methanol surpassed liquefied natural gas (LNG) as the preferred alternative fuel for new vessels last year, marking a significant milestone in the shipping industry’s decarbonization efforts.

Also interesting, the ammonia fleet has received five new orders this year, including two in March, compared to 11 ammonia-fueled newbuilds ordered in all of 2023, marking the first orders for vessels powered by the fuel.

“There are clear indications now that investments in ammonia ships are on an upward trend. Market conditions suggest that this growth is likely to continue in the coming months and years,” Stefanatos added.

According to DNV, a total of 298 ships with alternative fuel propulsion were ordered in 2023 out of 1,281 total orders, marking an 8% increase compared to the previous year.

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