Fuel pathways to net zero emissions

Minimizing fuel use as the first step toward sustainability

The best fuel is the fuel which is not used: Whether achieved through energy efficiency technologies or reduced consumption, the most sustainable solution begins with minimizing fuel use. Once fuel use becomes necessary, it is essential to evaluate which type of fuel is most appropriate and why.

A turbulent year for shipping emissions and energy discourse

In 2024, the shipping industry recorded its highest annual emissions to date. Despite widespread discourse surrounding wind propulsion, alternative fuels, and emerging technologies, geopolitical factors, strategic decisions, and conflicts significantly influenced outcomes. Nevertheless, advancements were made, and several key developments warrant attention.

According to Clarkson’s data, 820 vessels with alternative fuel capabilities were ordered. When measured by gross tonnage, approximately 50% of all global tonnage ordered in 2024 was equipped with dual-fuel engines. DNV reported a 38% year-on-year increase in vessels capable of using alternative fuels. Methanol, ammonia, and bio-LNG trials were conducted in various regions, including near Singapore and across Europe. Additionally, LNG and biofuel bunkering volumes reached record levels.

Data-driven insights into fuel adoption patterns

These developments demonstrate the shipping industry’s active engagement in sustainability initiatives. An analysis of the data provided by ABS reveals that most newly ordered alternative-fuel ships were powered by LNG, followed by methanol and ammonia. While ammonia remains in developmental stages, its adoption is expected to grow.

In any case, it is important to keep in mind that different vessel types and different routes require different technological solutions. Container vessels and PCTCs, for example, leaned toward LNG, while dredgers and ferries showed greater adoption of biofuels.

Overview of primary alternative fuel pathways

Four primary fuel pathways are currently under consideration:

• Oil-based fuels: Including low-sulfur heavy fuel oil (LSHFO), marine gas oil (MGO), and biofuels. This pathway is conventional and well-established, though biofuels face competition with food production due to limited biomass sources.
• LNG-based fuels: Currently dominated by fossil LNG, which offers a 23% emissions reduction. The pathway is evolving toward biomethane and e-methane. With dual-fuel technologies now mature and operational in 190 ports globally, LNG offers a viable transition option supported by expanding infrastructure.
• Methanol-based fuels: Presently reliant on fossil methanol, which can be more polluting than traditional fuel oil. However, green and bio-methanol variants are emerging. Methanol engines have been successfully tested, although availability and affordability of green methanol remain concerns.
• Hydrogen-based fuels: This includes grey hydrogen and ammonia today, with a future focus on green variants. While engines are under development, technology and infrastructure are currently immature.

Fuel affordability and price dynamics

Affordability plays a key role in fuel adoption; the large number of LNG-fueled ships ordered in 2024 is attributed to cost competitiveness. Price benchmarking from DNV and Argus indicates that LNG is among the most competitively priced fuels. Methanol and B24 blends follow, while green ammonia remains the most expensive option.

Moreover, IMO data provides additional insights into relative fuel costs, using heavy fuel oil (HFO) as a baseline. For instance, in March figures for Singapore, biodiesel (B24) commanded a $180 per ton over very low sulfur heavy fuel oil (VLSFO), while green ammonia cost an additional $2,000 per ton.

Global equity and the need for systemic support

Such cost disparities underline the need for a global levy. Expecting individual shipowners to bear the financial burden of adopting green fuels is unrealistic; it is a collective responsibility. While regions like Europe benefit from systems such as the EU ETS, other regions, including Singapore, lack similar frameworks. Without support mechanisms, early adopters of green fuels risk becoming noncompetitive.

Future outlook: synthetic fuels and the role of green hydrogen

Looking toward the future, the shipping industry must consider fuel needs beyond 2050. While wind remains a promising and romantic solution, long-term fuel strategies will rely on synthetic or “e-fuels” such as green ammonia, green methanol, and synthetic LNG.

All these fuels share a critical component: green hydrogen, which accounts for approximately 75% of their production cost. Thus, the cost and availability of green hydrogen will determine the feasibility and adoption of future fuels.

Regions capable of producing green hydrogen cost-effectively will emerge as key suppliers of synthetic fuels. Among the available fuels, the one with the most efficient, cost-effective, and environmentally friendly distribution infrastructure will likely become dominant. While there will be regional preferences and constraints, the underlying commonality, green hydrogen, will drive the economics.

Achieving long-term goals through coordinated action

Despite varying assessments of emission pathways, all alternatives present viable options with unique challenges. Achieving long-term decarbonization goals will require parallel efforts across policy, regulation, infrastructure, and technology development.

The case for LNG as a transition pathway

In closing, it is important to emphasize that the LNG pathway remains a viable route to 2050 and beyond. Current fossil LNG offers a 23% reduction in greenhouse gas emissions, along with 95% NOx and 99% SOx reductions.

The transition to biomethane and synthetic methane promises further reductions—up to 100% in some cases. With continued development in carbon capture, energy efficiency, and renewable technologies, the LNG pathway, alongside others, contributes meaningfully to the industry’s climate goals.

Please note: this information is provided solely for informational purposes and should not be the basis for any financial decisions.

Above article has been edited from Capt. Saunak Rai’s presentation during the 2025 GREEN4SEA Singapore Forum.

Explore more by watching his video presentation here below

The views presented are only those of the authors and do not necessarily reflect those of SAFETY4SEA and are for information sharing and discussion purposes only.