Engine orders before 2035 to lock in shipping fuels by 2050

Shipowners must build fleet strategy around fuel optionality.

Engine orders placed before 2035 will determine most of the fuels shipping consumes by 2050, as fleet renewal moves too slowly to correct early missteps, according to a Global Centre for Maritime Decarbonisation.

Vessels have an economic life of 25 to 30 years, and only around 4% of the global fleet is renewed annually.

Factoring in delivery lead times, more than half of the vessels sailing in 2050 will stem from orders placed before 2035.

The study found that sufficient engine capacity must first be built through newbuild orders, and the fuel must then remain cost-competitive year after year once vessels are in service.

In the base policy scenario, methanol dual-fuel engines account for around 10% of installed fleet capacity by 2050, yet methanol supplies only 2% of actual energy consumed.

Ammonia dual-fuel engines show a similar pattern, reaching 4% of fleet capacity but supplying only around 2% of total energy consumption in 2050.

The gap stems from dual-fuel engines' built-in optionality—vessels can switch between their designated new fuel and conventional fuel based on which is cheaper in a given year, decoupling the engine-ordering decision from actual fuel use.

The report identifies a case where near-term cost trajectories directly shift engine orders. A declining bio-methanol cost path, falling from U$43 per gigajoule (GJ) ($ 850 per tonne) in 2025 to $33/GJ ($650/t) by 2050, nearly doubles the share of methanol dual-fuel engines ordered by 2035 compared with a scenario where bio-methanol costs stay flat, ahead of e-methanol itself becoming cost-competitive.

"Fuels that remain expensive through the 2030s risk missing this critical orderbook window, even if their long-run economics are favourable," the report states.

The study recommends shipowners build fleet strategy around fuel optionality rather than committing to a single pathway.

“Dual-fuel vessels can pivot from OCCS-equipped VLSFO toward new fuels should carbon penalties escalate toward the IMO's high-penalty scenario of $700/tCO2e by 2050,” the report added.

It also urges owners on fixed trade routes to factor regional fuel-supply economics — such as lower-cost bio-ethanol from the US or bio-methanol from Asia — into engine selection at the point of order, rather than treating fuel access as a post-delivery operational issue.