Fuel constraints keep shipping on multi-fuel transition, report says

Limited green methanol production continues to restrict wider adoption.

Fuel availability constraints continued to shape the maritime industry's energy transition in 2025, with shipowners pursuing multiple alternative fuel pathways instead of converging on a single solution.

The 2026 Xinhua-Baltic International Shipping Centre Development Index said fuel availability, cost, infrastructure, and regulatory certainty continued to influence the pace of adoption across alternative fuels.

It added that limited green methanol production constrained wider adoption, whilst uncertainty over fuel availability and long-term pricing led to fewer new methanol-fuelled vessel orders in 2025.

Singapore, the world's largest bunkering hub, announced plans in 2025 to establish a green methanol bunkering market and issued licences to selected suppliers to begin operations, which could start as early as 2026. The report underscored the significance of this development, noting fuel availability is one of the main constraints to wider methanol adoption.

Methanol remained one of the leading alternative fuels under consideration, supported by its compatibility with dual-fuel engines and adoption in the container shipping segment. By the end of 2025, more than 450 methanol-capable vessels were operating or on order.

Liquefied natural gas (LNG) is also still the most widely adopted alternative marine fuel, with around 188 LNG-fuelled ships ordered in 2025, accounting for about 31% of total gross tonnage ordered. LNG also represented 58% of new alternative-fuel container ship tonnage.

The report said around 590 alternative-fuel ships were ordered during the year, bringing the global fleet and orderbook of such vessels to more than 4,500 ships.

The report cited Lloyd's Register's Fuel for Thought report as saying, "LNG represents one of the most readily available pathways for reducing emissions whilst the industry works to develop and scale up zero-carbon fuels."

Battery and hybrid-electric vessels expanded in short-sea shipping, ferries, transshipment, and port operations.

The report projected the electric ship market would grow from about $4.85b in 2025 to $18.39b by 2032, although it said electrification is better suited to shorter voyages because energy density limitations make it unsuitable as a standalone solution for deep-sea shipping.

The report also highlighted progress in ammonia as a marine fuel, including charter agreements between BHP and COSCO Shipping for two ammonia dual-fuel Newcastlemax bulk carriers. By mid-2025, around 39 ammonia-capable ships were on order worldwide.

The report said many shipowners are prioritising dual-fuel and fuel-ready vessels to maintain flexibility amidst uncertainty over fuel availability, infrastructure development, and regulation.