DNV: Shipping’s Fuel Future Hinges on What Regulators Do Next

Regulatory uncertainty is becoming a major factor in shipowners’ investment decisions as the industry weighs vessels and fuel systems that will remain in service for decades, according to DNV’s latest Maritime Forecast to 2050.

The report examines four possible regulatory futures, ranging from full adoption of the International Maritime Organization’s Net-Zero Framework to outright rejection and prolonged political gridlock. Between those extremes are scenarios involving a delayed or revised framework and a greater role for regional regulations.

The uncertainty comes as the IMO prepares to return to the Net-Zero Framework in October, one year after governments adjourned the extraordinary Marine Environment Protection Committee meeting without adopting the regulations.

DNV said the eventual outcome could significantly change the economics of alternative fuels, energy-efficiency investments and fleet renewal.

“Decisions taken today on vessel design, retrofits, and fuel capability will determine competitiveness for decades, while the outcome of ongoing regulatory negotiations could significantly reshape the economics of shipping’s energy transition,” said Øyvind Sekkesæter, senior consultant at DNV and lead author of the report.

Under stronger global regulation, DNV estimates the world fleet could consume as much as 25% less energy by 2050 compared with a scenario driven primarily by regional rules. Demand for low-greenhouse-gas fuels could also vary widely depending on the regulatory path, ranging from 33 million tonnes of oil equivalent to 185 million tonnes by 2050.

The wide range underscores one of the report’s main conclusions: shipowners may have less reason to bet on a single future fuel than to build flexibility into their fleets.

That is already visible in the orderbook. DNV said alternative-fuel-capable tonnage has grown from just 0.4% of the global fleet in 2020 to 5.2% in 2026, led by LNG and methanol systems. But many dual-fuel vessels continue operating primarily on conventional fuels because alternatives remain more expensive and incentives for switching remain limited.

Energy efficiency presents a more straightforward investment case.

DNV modeled a retrofit of a hypothetical 15-year-old, 5,000-TEU containership involving a new bow, propeller upgrade and propeller boss cap fin at a cost of $2.35 million. The measures produced estimated fuel savings of about 16%, with payback periods ranging from 1.4 to 4.2 years depending on fuel prices.

The net present value of the savings could reach between $2 million and $10 million by 2038, even before accounting for compliance costs under the European Union Emissions Trading System and FuelEU Maritime.

“The key takeaway from this study is that even a 15-year-old vessel can offer a compelling business case for retrofitting energy-saving measures,” Sekkesæter said. “Unlike fuel choices, efficiency improvements create value under every regulatory scenario.”

DNV also pointed to real-world performance data showing the potential value of relatively simple maintenance measures. On one chartered vessel, hull and propeller cleaning reduced its Vessel Technical Index from an average of 1.32 to 1.14, with 1.00 representing an “as-new” baseline.

The improvement saved roughly 120 tonnes of fuel during a 33-day voyage. At $470 per tonne, the savings totaled about $56,000, compared with a cleaning cost of $14,000.

Fuel availability remains another major constraint.

The LNG bunkering fleet has expanded from 25 vessels in 2020 to 67 today, while 24 methanol bunkering vessels are operating and another eight are on order. But supplies of genuinely low-GHG fuels remain concentrated in Europe and East Asia.

DNV found that low-GHG fuels have been bunkered at nearly 90 ports worldwide, though availability differs sharply by fuel. Biodiesel is available at nearly 70 ports, liquefied biomethane at 20 and low-GHG methanol at 16. Low-GHG ammonia has so far been bunkered at only three ports, all in East Asia.

Shipping will also have to compete with aviation, manufacturing, power generation and road transport for many of the same fuels and feedstocks. DNV estimates demand across all sectors could exceed 2.2 billion tonnes of oil equivalent under a global net-zero pathway, increasing pressure on supplies of biofuels and potentially forcing greater reliance on more expensive e-fuels and blue fuels.

The result, DNV argues, is an increasingly difficult investment environment in which flexibility may carry its own value.

“Shipowners need fuel and technology strategies that remain competitive across different regulatory outcomes,” Sekkesæter said. “At the same time, clear demand signals and concerted efforts are needed to scale the solutions and infrastructure supporting shipping’s energy transition.”

DNV released the 10th edition of its Maritime Forecast to 2050 in late August. The report is intended to help owners evaluate fuel, technology and efficiency investments against multiple possible regulatory outcomes rather than relying on a single decarbonization pathway.

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