Green Technology Tracker: 41% of tonnage ordered in 1H 2024 alternative fuelled

Clarksons Research have today released their latest Green Technology Tracker, including first half 2024 data points, charting the progress of alternative fuel uptake and investments in energy saving technologies across the global shipping fleet. Summarising the latest Tracker, Steve Gordon, Global Head of Clarksons Research, commented:

“Investment into alternative fuel continued in first half 2024, accounting for around one third of all newbuild orders and 41% of all tonnage placed and with orders announced for vessels capable of using either LNG (109 orders, 51 excluding LNG Carriers), methanol (49 orders), ammonia (15 orders),  LPG (42 orders) and Hydrogen (4 orders). Excluding LNG Carriers, the relative share of ordering of LNG fuel capable tonnage increased relative to methanol capable tonnage in the first half compared to 2023 levels.

Although the first half represents a decline on the share of alternative fuel ordering since a 2022 high (54% share of tonnage ordered), this in part reflects a change in ship type ordering mix including, for the moment,  lower order volumes involving containerships confirmed across 1H 2024. However with the focus on future “optionality”, orders involving “ready” status have increased to around a fifth of all orders (169 orders, 22% of tonnage ordered).

With the confirmed orderbook (~50% of orderbook tonnage is today alternative fuelled) and projected investment in the coming years, we forecast that over a fifth of all fleet capacity will be alternative fuel capable by the end of the decade (2017: 2% of fleet capacity “on the water”, 2024:  7%, 2030(f): >20%).

Investments in port infrastructure and the availability of “green” fuels continue to lag, with our Green Technology Tracker detailing 273 ports with LNG bunkering and 251 ports with shore power connection in place or planned but only 29 ports with methanol bunkering available and planned.
With an ageing fleet (12.8 years on a GT weighted basis up from a low of 9.7 years in 2013), over 30% of fleet capacity rating D or E under CII last year and long lead times (~3.5 years) at major shipyard), retrofitting of Energy Saving Technologies (ESTs) remains a crucial part of shipping’s decarbonisation pathway.  Energy Saving Technologies (ESTs) have been fitted on over 8,713 ships, accounting for 33.5% of fleet tonnage: this includes propeller ducts, rudder bulbs, Flettner rotors, wind kites, air lubrication systems and others (>493 ships with air lubrication system and >116 units involving “wind” assistance in the fleet and orderbook). Our tracker also includes 31 vessels in the fleet (plus 28 newbuilds) testing onboard carbon capture technology.

We now estimate that shipping’s global GHG emissions will increase by ~3% in 2024 to 1,046 million tonnes of CO2e on a WTW basis and to move above start Covid-19 levels, with a higher proportion of time being spent at sea (assuming continued Red Sea re-routing), some increases in speed (especially in the container market, albeit we project the underlying long term trend for declining speed will continue) and trade growth offsetting the growing share of alternative fuelled vessels, “eco” ships and tonnage with ESTs.”

A copy of the Clarkson Research Green Technology Tracker is available on request and below further commentary on the data points :   

·In 1H 2024, against the backdrop of a continued healthy flow of ordering, 310 units of 17.2m GT ordered were reported to have alternative fuel capability, equivalent to 41% of tonnage contracted. Alternative fuel capable vessels contracted so far this year include 109 LNG capable vessels of 11.5m GT, 49 methanol capable units of 2.7m GT, 42 LPG capable ships of 1.7m GT and 92 battery/hybrid vessels of 0.7m GT. This follows full year 2023 when 578 units of 35.0m GT ordered were reported to have alternative fuel capability, ~40% of total GT ordered, including 221 LNG capable ships of 19.3m GT, 135 methanol capable vessels of 10.7m GT, 48 LPG capable vessels and 148 battery/hybrid vessels. For added context, in 2022, a record 54% of newbuild tonnage ordered was alternative fuel capable, up from 28% in 2020 and 8% in 2016. Moreover, basis non-LNG carriers, alternative fuel capable tonnage accounted for 28% of total contracting in 1H 2024, compared to 35% in 2023, a record 41% in 2022 and 26% in 2021.

·Uptake of alternative fuels has continued to progress, with around half of the orderbook in GT terms capable of using alternative fuels or battery hybrid propulsion (49.5%, start 2022: 33.9%, start 2017: 10.7%). Meanwhile, 6.8%* (start 2022: 4.6%, 2017: 2.4%) of the fleet on the water in tonnage terms is capable of using alternative fuels or propulsion, a share which could increase to ~9% by the end of next year.

·Of the total orderbook, 35.7% of tonnage is set to use LNG (907 units), 9.0% to use methanol (242 units), 2.0% to use LPG (111 units) and ~2.9% due to use other alternative fuels (~419 units) including hydrogen (29), ethane (45), ammonia (26), biofuels (24) and battery/hybrid propulsion (~395).
·With future optionality over fuel choice continuing to gain traction, there are now 503 LNG ready ships in the fleet and 137 on the orderbook, while there are 272 ammonia ready, 353 methanol ready and 13 hydrogen ready vessels on order.

·Energy Saving Technologies (ESTs) have been fitted on over 8,713 ships, accounting for 33.5% of fleet tonnage: this includes propeller ducts, rudder bulbs, Flettner rotors, wind kites, air lubrication systems and others.

·Scrubbers are now fitted to over 5,838 ships in the fleet, equivalent to 28.3% of total tonnage. Scrubber retrofitting activity and newbuild uptake has continued, with over 156 vessels retrofitted with a scrubber and 151 scrubber fitted ships reported ordered in in 2024 so far (2023: 521 vessels retrofitted, 401 newbuild orders). Price differentials between HSFO and VLSFO have narrowed since the start of the year, from c.$125/tonne to now stand at c.$75/tonne in key ports, as of end-Jun.

·'Eco' ships make up a growing share of the fleet ('modern' eco vessels now 33.1% of total GT) with implications for earning potential, asset values and increasingly "tiered" and complex charter markets. For context, we estimate that 27.1% of global tonnage was 'eco' as of start 2022, and just 14.6% at start-2018.

·The average age of the world fleet is increasing, standing at 12.8 years on a GT weighted basis (up from a low of 9.7 years in 2013). For the bulkcarrier fleet, the average age is 12.3 years and for tankers it is 13.3 years, whilst for the container fleet, the average age has begun to trend downwards and now stands at 13.9 years. Today, 34% of global tonnage is aged over 15 years. We estimate that under CII, around 45% of today's tanker, bulkcarrier and container fleets will be D or E rated if they are still trading in 2026 and have not modified speed or specification.

·The overall orderbook as a % of fleet capacity in dwt terms remains historically moderate at ~12%, though with significant variation between sectors - the LNG carrier and containership orderbooks, in capacity terms, equal ~54% and ~19% respectively, while bulkers and tankers equal just ~9% and ~10% respectively.

·'Green' port infrastructure is continuing to expand: currently there are 192 active LNG bunkering ports (and 81 planned facilities), while over 2,773 vessels in the fleet are fitted/set to be fitted with shore power connections; Clarksons Research are also collecting data on ammonia and hydrogeninfrastructure, and carbon capture projects.

·BWMS retrofit programme ongoing: majority of fleet tonnage (86%) now BWMS-fitted.
*in number of vessels this is 1.7%.

Source: Clarksons Research