Britannia P&I Club has issued its latest Alternative Fuels Watch report, offering an overview of the state of alternative marine fuels including biofuels, LNG, methanol, ammonia, and hydrogen.
Britannia’s analysis reflects the shifting dynamics shaping fuel strategy in shipping. It also touches on broader developments, such as nuclear propulsion, pointing to the wide array of innovations under consideration as the industry aims to meet long-term sustainability goals. The Club’s analysis is presented as follows:
Biofuel
- Operational/built: N/A
- On order: N/A
Fatty Acid Methyl Ester (FAME) and Hydrotreated Vegetable Oil (HVO) remain prominent as “drop-in” biofuels, compatible with existing marine engines. While they contribute to shipping decarbonisation efforts, challenges persist regarding feedstock availability and cost competitiveness.
LNG
- Fleet: 1370
- Orderbook: 1031
While Liquefied Natural Gas (LNG) continues to be a leading transitional fuel – backed by proven engine technology and a steadily expanding global bunkering network – concerns over methane slip must still be addressed to fully realise its greenhouse gas (GHG) reduction potential and sustain its role in the industry’s decarbonisation strategy.
Methanol
- Fleet: 58
- Orderbook: 320
Methanol is becoming increasingly popular as marine fuel due to its simpler handling requirements and comparatively easier risk management than LNG, making it an attractive option for the industry. However, its toxicity and low flash point remain key safety considerations that must be addressed for broader adoption.
Ammonia
- Fleet: 4
- Orderbook: 45
Ammonia is emerging as a promising alternative fuel in the maritime industry’s decarbonisation efforts. When combusted, it produces no carbon emissions except for those associated with the small quantity of pilot fuel typically required for ignition. It also benefits from relatively broad availability in regions with established agricultural and industrial sectors. However, its adoption is not without challenges, including its toxicity, flammability (despite being difficult to ignite), and the need for complex storage and handling procedures.
Hydrogen
- Fleet: 16
- Orderbook: 35
Hydrogen, another alternative fuel identified as clean and potentially abundant, is attracting substantial investment in supporting technologies. Its application in fuel cells also generally offers higher efficiency than conventional combustion engines. However, production remains energy-intensive and costly, bunkering infrastructure is still in its early stages (with commercial ports availability virtually non-existent), and storage requires extremely low temperatures of -253°C – making wider implementation both technically demanding and economically challenging at present.
The latest developments in the industry
Biofuel
Biofuels like Fatty Acid Methyl Ester (FAME) and Hydrotreated Vegetable Oil (HVO) continue their momentum as accessible transitional solutions in maritime decarbonisation.
Recent revisions to ISO 8217:2024 have expanded the permissible biofuel content in marine fuels, allowing blends up to 100% FAME. However, careful and effective onboard fuel risk management is always advised when trialling and continuing the use of these fuel blends.
In a notable regulatory advancement, IMO’s Marine Environment Protection Committee (MEPC) has also approved an interim circular during its 83rd session, permitting conventional bunker ships to carry biofuel blends containing up to 30%.
Methanol
Methanol’s prominence in the shipping sector has surged, owing to its manageable transition pathways and lower infrastructure investment compared to other alternatives.
Industry leaders are rapidly expanding their methanol-powered fleets, exemplified by ongoing dual-fuel retrofit projects on major containerships.
By the end of 2025, one major shipping group plans to operate nearly twenty methanol dual-fuel vessels, underlining methanol’s increasing commercial and environmental appeal.
LNG
LNG retains its status as a dominant transitional marine fuel, with Asia’s demand projected to stay strong in 2025, accelerated by a steady influx of dual-fuel vessel deliveries. Singapore, the world’s largest bunkering port, saw a significant increase in LNG bunker volumes, growing over fourfold year-on-year in 2024.
Concurrently, regulatory changes in the United States are now facilitating broader LNG adoption by removal of previous barriers, enhancing LNG’s operational accessibility and global appeal.
Nevertheless, environmental scrutiny concerning methane slip – a potent greenhouse gas emission associated with LNG operations – remains a critical industry challenge. Ongoing technological enhancements and operational adjustments aimed at mitigating methane emissions are thus vital for preserving LNG’s long-term environmental credibility.
Ammonia
Ammonia’s prospects as a zero-carbon marine fuel have significantly advanced, spurred by planned deliveries of the first ammonia-fuelled marine engines and rapid growth in ammonia-capable vessel orders.
Regulatory progress continues, with the IMO’s Maritime Safety Committee (MSC) approving interim guidelines for the safe use of ammonia as a marine fuel during its 109th session.
The upcoming MSC 110 session is expected to continue discussions on amendments required to the IGF and IGC Codes to support the adoption of emerging fuels – particularly the use of ammonia as both cargo and fuel, which remains currently prohibited. Draft interim guidelines addressing ammonia’s dual use are also anticipated to be finalised at a subsequent meeting later in 2025.
However, despite its promising potential in the maritime sector’s decarbonisation journey, safety concerns and regulatory clarity remain a challenge for widespread adoption.
Hydrogen
Hydrogen continues to gain steady traction as a viable alternative fuel in the maritime industry, with several innovative projects underway. A notable initiative involves the development of a liquid hydrogen-powered cargo vessel (combining hydrogen fuel cell system together with batteries, and other efficiency solutions) intended for operations in the North Sea. This project seeks to demonstrate the feasibility of hydrogen propulsion for bulk transport.
On the infrastructure front, a European aerospace group has initiated the NAVHYS project, aiming to develop innovative solutions for storing and using liquid hydrogen in maritime transport. It aims to leverage expertise in liquid hydrogen handling to support the maritime sector’s transition to cleaner fuels.
While technical and logistical challenges remain, continued investment in hydrogen technologies and evolving regulatory measures appears to indicate a strong trajectory toward integrating hydrogen as a mainstream marine fuel.
Other interests
Nuclear propulsion for commercial shipping – There has been renewed interest in nuclear propulsion as a means to achieve zero-emission shipping. Recent initiatives are exploring the deployment of small modular reactors (SMRs) for commercial vessels, aiming to provide long-duration, emission-free operations. These reactors are being considered for integration into various ship types, including cargo vessels and icebreakers, to enhance operational efficiency and reduce reliance on traditional fuels.
In Europe, collaborative efforts are underway to develop advanced nuclear-powered merchant ships, with projects moving into prototype phases. These endeavours focus on utilising fourth-generation reactor technologies to create viable nuclear propulsion systems for commercial shipping.
The regulatory landscape is also evolving to accommodate these advancements. Efforts are being made to establish frameworks that ensure the safe and efficient operation of nuclear-powered vessels, addressing challenges related to licensing, crew training, and international compliance.
While nuclear propulsion presents opportunities for sustainable maritime operations, considerations regarding safety, public perception, and economic viability continue to shape its adoption. Ongoing research and pilot projects aim to address these challenges to pave the way for potential integration of nuclear technology into the commercial shipping sector, Britannia concludes.
