Maritime industry witnesses ‘unprecedented’ surge in dual-fuel ship orders

There has been a huge rise in orders for dual-fuel vessels over the last six years, according to Veson Nautical’s data.

“As the maritime industry begins to decarbonize many of the major shipping players are future proofing their fleets and this is particularly evident in the container shipping sector,” Rebecca Galanopoulos, Senior Content Analyst at Veson Nautical, commented.

“The fact that just 4% of container vessel with dual-fuelled engines was ordered in 2018 compared to 65% in 2024 gives an indication of the progress being made.”

Earlier this month, the US-based provider of maritime data and freight management solutions revealed that orders of new container vessels are up by over 50% with 254 contracts placed in 2024, compared to 167 in the corresponding period of 2023, referring to a new report published by its data intelligence arm VesselsValue.

What is more, shipping association BIMCO shared that shipyards’ deliveries of containerships have reached a new annual record, with a total of 410 ships having been delivered.

Dual-fuel engines can operate on both traditional marine fuels such as heavy fuel oil as well as less carbon-intensive alternatives like liquified natural gas (LNG). LNG vessels have been fitted with these engines for some time, but vessels from other sectors, particularly container shipping, are catching up.

Dual-fuel vessels are destined to play a bridging role as the global maritime industry makes its journey through the energy transition.

As explained, there are still some gaps in the order book, particularly in the ferry, offshore, and smaller bulk carrier sectors, and “a creative solution” would need to be found that would allow smaller vessels to be equipped with dual-fuel engines, Veson Nautical said. However, the higher costs, space constraints, and the lower operational range of most of these vessels means that conventional dual-fuel engine technology is not viable.

LNG fleet continues growth trajectory

With a global infrastructure stretching back decades, LNG is set to play a vital role as a bridge fuel for the energy transition, and the above chart illustrates its exponential growth over the past decade.

According to data from VesselsValue, the live LNG fleet has surged in capacity by ~142% from 47.1 million cubic meters to 113.9 million cubic meters in the last decade. These numbers are supported by (cargo miles) growth which has more than doubled since 2014 from 230 billion cubic meters per nautical mile to 504 cubic meters per nautical mile.

With LNG supply set to increase by ~57 million tonnes per annum in 2026 the market for LNG carriers is set to increase with record numbers for the vessels being ordered in 2022 and 2023.

“The significant increase in the global LNG fleet shows owner’s confidence in the market, and the desire to replace some of the older less-efficient vessels in the fleet,” Olivia Watkins, Associate Director of Valuations and Analytics at Veson Nautical, said.

“The maritime industry adopting more dual-fuelled engines that burn LNG is only going to increase demand in this sector further.”