As emissions regulatory and policy decisions continue to “ramp up” across maritime, Clarksons Research is closely tracking uptake of “green” technology that will impact the shipping industry’s 855mt and 2.3% contribution to global CO2 (and 1.8% of all GHG). Summarising the latest trends in technology uptake and fleet renewal from our Fuelling Transition report and monthly data series, Steve Gordon, Clarksons Research Managing Director, commented:
- In full year 2022, a record 61%* of all newbuild orders by tonnage were alternative fuel capable (basis non-LNG carriers: 46% of tonnage), while 51% (397 orders of 36.4m GT) have been LNG dual fuelled, 7.0% methanol fuelled (43 orders of 5.0m GT), 1.1% LPG fuelled (17 orders of 0.8m GT) and 1.2% include battery hybrid propulsion. In addition, a further 10.8% of orders were ammonia “ready” (90 orders of 7.7m GT), 1.4% of orders were LNG “ready” (31 orders of 1.0m GT) and ~0.1% of orders have been hydrogen “ready” (3 orders of 15k GT). Please note these add up to excess 100% of the alternative fuels capable total: there is an increasing trend towards multiple fuels / fuel ready to provide future optionality. For context, in 2021 30.6% of newbuild tonnage ordered was for alternative fuel capable vessels (483 units), up from 210 orders in 2020 and 49 orders in 2016.
- Uptake of alternative fuels has continued to progress, with 5.1%** (start 2022: 4.4%, 2017: 2.3%) of the fleet on the water and 47.1% (start 2022: 33.4%, 2017: 10.6%) of the orderbook in tonnage (GT) terms capable of using alternative fuels or propulsion.
- Of the total orderbook, 39.9% of tonnage is set to use LNG (825 units), 3.5% to use methanol (64 units), 2.1% to use LPG (88 units) and 2.4% due to use other alternative fuels (c.250 units; including ethane (16), hydrogen (13), biofuels (7) and battery/hybrid propulsion (c.200)).
- With future optionality over fuel choice continuing to gain traction, there are now over 340 “LNG ready” ships in the fleet and 106 on the orderbook, while there are 150 “ammonia ready”, 55 “methanol ready” and 6 “hydrogen ready” vessels on order.
- Energy saving technologies (ESTs) have been fitted on over 5,775 ships, accounting for 25.3% of fleet tonnage: this includes propeller ducts, rudder bulbs, Flettner rotors, wind kites, air lubrication systems and others.
- Scrubbers are now fitted to over 4,942 ships in the fleet (including pending retrofit), equivalent to 25.1% of total GT. While scrubber retrofitting activity has slowed (Q3 2020: ~100 per month, Q4 2022: ~15 per month), newbuild uptake grew slightly in 2021 (351 units), while only 74 scrubber fitted units were ordered in 2022. The current price differential between HSFO and VLSFO remains significant (Rotterdam/Singapore: $162/$212), having reached record highs in early 2022.
- ‘Eco’ ships make up a growing share of the fleet (‘modern’ eco vessels now 29.4% 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’ twelve months ago, and just 14.6% at start-2018.
- The average age of the world fleet is increasing, standing at 12.3 years on a GT weighted basis (up from a low of 9.8 years in 2013). For the bulk carrier fleet, the average age is 11.7 years, for tankers it is 12.4 years and for the container fleet it is 14.2 years. Today, 28.7% of global tonnage is aged over 15 years. We estimated that under CII, around 40% 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 remains historically low at ~10% – the figure is 28.9% for containers, 7.2% for bulkcarriers and 4.1% for tankers.
- ‘Green’ port infrastructure is continuing to expand: currently 158 active LNG bunkering ports (and 96 planned facilities), while over 1,800 vessels are fitted/set to be fitted with shore power connections; Clarksons Research are also collecting data on ammonia and hydrogen infrastructure.
- BWMS retrofit programme ongoing: majority of fleet tonnage (73.9%) now BWMS-fitted.
*in number of vessels this is 35%.
**in number of vessels this is ~1.2%.
While we continue to integrate much of our longstanding work around the Fuelling Transition within our existing research framework, the Green module of World Fleet Register (WFR) and Shipping Intelligence Network (SIN) consolidates this data work into a single resource. An additional subscription or upgrade is required for access and please contact firstname.lastname@example.org if you would like to arrange this. Please note the best option for access, alongside access to the underlying data, is already available via a subscription to the World Fleet Register which many SIN subscribers have found an increasingly useful tool.
As pressures build globally to find solutions to moderate climate change, the Green Transition will cause fundamental change to shipping, trade, offshore and energy. We are committed to providing data and intelligence to help frame the critical decision s that s takeholders across our industry will need to make to facilitate the Green Transition. Clarksons Research will continue to support its clients to (i) understand, in commercial terms, upcoming technical regulation (ii) track technology uptake by the shipping industry (iii) analyse the impact of environmental policy, regulation and technology on market supply / demand, asset values, vessel earnings and companies and (iv) project scenarios for required investment, including newbuildings. Information around the broader Clarksons Group work around the Green Transition, including consultative and broking support, can be found by clicking here.