Affordable and Available: LNG Dominated Dual-Fuel Vessel Orders in 2024

The shipping industry is looking for CO2-reducing alternatives to bunker fuel, and LNG has become the preferred alternative fuel of choice, according to data collected by DNV. 

DNV’s annual review shows that the shipping industry is forging ahead. Last year, a total of 515 alternative-fuel ships were ordered, representing a 38 percent year-on-year increase compared to 2023. 

The boom in container and car carrier newbuilds in recent years has been instrumental in the growth of alternative-fueled vessel orders, a trend that was maintained last year. In 2024, the container and car carrier segments made up 62 percent of all alternative fuel orders, an indication that cargo owners were responding to consumer demands for more sustainable practices and a push by liner companies to replace older tonnage.

In 2024, LNG gained prominence as the fuel of choice as market dynamics drove a shift away from methanol, which had a standout year in 2023. Ocean carriers placed an order of 264 LNG vessels in 2024, more than double the number of vessels ordered in 2023. 

Considering the industry also witnessed a record number of LNG dual-fuel deliveries - totaling 169 vessels in 2024 - the number of LNG-fueled ships in operation is on the rise. By the end of last year, 641 LNG-powered ships were in operation with the number expected to double by the end of the decade.

A key factor that is propelling the increase in LNG-fueled ship orders is the fact that LNG bunkering is maturing. Last year saw the number of LNG bunker vessels in operation increase to 64 from 52, with the growth expected to continue this year. However, there are concerns that an existing gap between LNG bunkering supply and demand could widen over the next five years based on dual-fuel ship order volume.

DNV noted that building more bunkering infrastructure helps the existing fleet and stimulates future demand at the same time. The European Union is already implementing requirements for a large network of ports to have LNG bunkering infrastructure, which will increase fuel availability.   

“As we work towards decarbonizing the industry, we are encouraged by the growth in alternative fuel vessels over the past few years,” said Knut Ørbeck-Nilssen, CEO of DNV Maritime. “While recent figures are promising, we must keep pushing forward. The technological transition is underway, but supply of alternative fuel is still low. As an industry we need to work with fuel suppliers and other stakeholders to ensure that shipping has access to its share of alternative fuels in the future.”

Though orders for LNG vessels dominated in 2024, it was not the only fuel on shipowners’ minds. A total of 166 methanol vessels were ordered during the year, up from 138 in 2023. Most of the methanol orders, totaling 85, were in the container segment. The increase in methanol orders indicates that while liners are facing a challenge due to the slow development of green methanol production, they still believe in a diverse fuel pool.

The same sentiment drove promising momentum recorded in ammonia-fueled vessels. In 2024, there were 27 orders compared to just eight in 2023. The first non-gas carrier ammonia-fueled vessels orders were placed in 2024, totaling 10 in number, half of which were in the bulk carrier segment.