The shipbuilding industry in 2024 has seen a sharp decline in orders for methanol-powered vessels, reflecting concerns over the future availability of green methanol. In the first ten months of the year, methanol-fueled ships accounted for only 21% of new capacity orders, a significant decrease from the 51% recorded in 2023, according to Alphaliner.
Conversely, orders for liquefied natural gas (LNG) propulsion have surged, becoming the preferred choice for carriers aiming to reduce carbon emissions in the short to medium term. LNG-powered vessels now make up 55% of the year’s new capacity, totaling 1.76 million twenty-foot equivalent units (Mteu), quadruple the 440,000 teu ordered in 2023.
The shift in preference is largely driven by concerns over methanol’s supply chain. A recent industry report revealed that more than two-thirds of planned methanol production facilities have yet to secure final budget approvals, raising doubts about future availability. Additionally, higher-than-expected processing costs have further hindered the adoption of methanol as a viable green fuel alternative.
By mid-October, a total of 264 orders for all propulsion types had been placed in 2024, representing 3.11 Mteu, with 77.5% of the capacity classified as ‘green tonnage.’ Leading the LNG adoption trend, Maersk, one of the world’s largest shipping companies, announced in August that it would split its upcoming fleet expansion between LNG and methanol-powered vessels, with the final split dependent on future fuel availability and regulatory conditions.
Maersk has already committed to ten LNG-powered ships with long-term charters, and it is believed to be behind additional LNG orders. With larger ships increasingly opting for LNG propulsion, no methanol-fueled vessels over 14,000 teu have been ordered this year.
The overall orderbook for 2024 now stands divided among LNG (41%), conventional fuels (31%), and methanol (28%). This marks a significant shift, with the potential for further conversion of existing LNG and methanol-ready vessels to greener propulsion in the future.
Source: Alphaliner
