6 June 2024 (Lloyd's List) - THE share of alternative fuel newbuilding orders in 2024 has risen year on year, despite ordering activity being dominated by conventional-fuel bulk carrier and tanker contracting.

According to DNV’s Alternative Fuel Insight data, a total of 127 alternative-fuel ships were ordered in the first five months of this year, compared to 82 in the same period in 2023. This represents a growth of 55% year on year.

A total of 33 new orders for alternative fuelled vessels were signed in May with methanol the biggest driver. Some 70% of alternative fuel orders, provided by 23 ships, were for methanol dual-fuel vessels.

New methanol-capable orders included 10 containerships, five bulk carriers, and four vehicle carriers. LNG is now lagging methanol, with only eight new orders recorded in May.

Two dual-fuel ammonia ships were ordered in May, “reinforcing the burgeoning momentum already shown for this fuel in the earlier months of the year,” said DNV.

“The momentum in the new order market towards alternative fuelled vessels is strong, and this has been reinforced by our May figures. Methanol continues to be the headline story, with 70 new orders for methanol-fuelled vessels now placed in 2024,” said DNV Maritime global decarbonisation director Jason Stefanatos.

“This accounts for 55% of all new orders for alternative fuelled vessels in 2024. While this is still far behind LNG in overall terms, these latest figures demonstrate a clearly increasing appetite from the market for methanol-fuelled vessels.”

Stefanatos noted that 11 ammonia fuelled vessels have been ordered since January compared to only two for the whole of 2023.

“While still clearly in its early stages, this provides further evidence of the emergence of ammonia on the alternative fuelled market.”

Newbuilding orders data tracked by Lloyd's List shows that some 600 merchant vessels were ordered in the first five months of 2024, with 21% of these being alternative fuel ships.

This compares to 470 vessels ordered in the same period in 2023, with 17% being provided by ships capable of utilising alternative fuels.

While ordering activity has seen a significant increase this year for conventional-fuel dry cargo vessels and tankers, there are several orders for new dual-fuel containerships in the pipeline which should ensure a rise in the share of alternative-fuel orders versus conventional-fuel tonnage.

This follows a big drop in boxship orders in 2023, following heavy newbuilding contracting in 2021 and 2022.

Containership newbuilding contracts expected to be confirmed in 2024 include a new series of dual-fuel feeder ships for Taiwan’s Evergreen. The world’s seventh largest operator of containerships is understood to have issued a tender for at least six 2,400 teu vessels capable of operating on methanol.

Canadian tonnage provider Seaspan is said to be in the market for at least 10 alternative fuel newbuildings of between 9,000 teu and 13,000 teu against long-term charters to an undisclosed liner operator.

Meanwhile, Cosco recently switched an existing order for four conventional fuel, neo-panamax, containerships to methanol dual-fuel specification. The 16,000 teu ships were contracted in 2021 and the fuel type switch will incur an additional $28.5m in pricing per vessel versus their original contract price of $155m each.

Several containership owners have been working on new designs of large feeder vessels which could lead to more new orders this year.

They include Ocean Network Express which received an approval in principle for an ammonia dual-fuel, 3,500 teu, containership in a partnership with Japan’s Nihon Shipyard and DNV.

Non-operating owner Seaspan has been working with Lloyd’s Register and ship design consultancy Technolog for a next generation feeder vessel. The 3,000 teu concept would be initially powered by LNG, but will have the option to convert to ammonia fuel.