Op-Ed: Exploring fuel options for newbuild vessels

Konstantinos Vouroutzis

By Konstantinos Vouroutzis, ABS Senior Project Manager, Global Sustainability Center Greece

ABS examines LNG, methanol and ammonia as alternative fuel options for newbuild vessels in the latest technical and operational advisory.

Vessel owners and operators are increasingly prioritizing dual-fuel propulsion solutions to address two key objectives: reducing fuel costs and meeting global greenhouse gas (GHG) emissions regulations.

ABS’s comprehensive technical and operational advisory takes a closer look at three primary dual-fuel solutions on the horizon for newbuild vessels: LNG, methanol and ammonia. This ABS advisory provides shipowners with a comprehensive and practical examination of alternative fuel pathways helping them meet the global emissions reduction targets and operational efficiency goals amidst all the different regulatory pressures.

Regulatory Landscape and Economic Implications

The maritime industry is shifting from traditional Tank-to-Wake (TtW) emissions evaluations to a Well-to-Wake (WtW) approach, which now form the basis of new regulations like the IMO GHG Fuel Standard and FuelEU Maritime. This transition accounts for the entire lifecycle emissions of fuels. As a result, shipowners are now considering alternative fuels that meet both current and future regulatory standards, including the IMO’s Revised Strategy and the EU’s Fit for 55 legislative package.

The IMO’s updated GHG strategy sets ambitious targets: a 40% reduction in carbon intensity by 2030, net-zero emissions by or around 2050 and indicative checkpoints of 20-30% reduction by 2030 and 70-80% by 2040. Simultaneously, the EU’s implementation of the Emissions Trading Scheme (EU ETS) and FuelEU Maritime regulation creates immediate compliance pressures for vessels operating in European waters.

To meet these demands, shipowners will need to factor in the following design considerations:

• Fuel Infrastructure Availability;
• Regulatory Compliance;
• Operational Impact; and
• Economic Feasibility.

The choice of fuel impacts not only the design and construction of vessels but also their operational efficiency, safety and long-term viability in a decarbonizing industry.

Most Mature Fuel Solution

Liquefied natural gas (LNG) emerges as the most technologically mature solution, typically providing up to 25% emissions reductions compared to conventional marine fuels. However, issues such as methane slip may impact long-term compliance with stricter regulations. The extensive experience from LNG carriers and established bunkering infrastructure provides operational confidence, with numerous LNG bunker vessels operating worldwide.

However, LNG systems introduce significant complexity. Fuel containment solutions range from IMO Type C pressurized tanks (common for smaller vessels due to cost-effectiveness and simplicity) to membrane tanks for larger vessels requiring higher space efficiency. The fuel gas supply system (FGSS) must manage boil-off gas while delivering fuel at precise temperatures and pressures to engines operating on either high-pressure Diesel cycles or low-pressure Otto cycles.

Key design considerations include selecting non-hazardous machinery space concepts to minimize complexity, implementing effective BOG management protocols meeting IGF Code 15-day holding criteria, and establishing comprehensive bunkering procedures that account for vapor return systems and temperature control challenges.

Moving Ahead with Methanol

Meanwhile,methanol presents a promising alternative, leveraging existing global infrastructure and simpler onboard handling as a liquid fuel at ambient conditions. With over 120 ports worldwide offering methanol availability and established transportation networks from the chemical industry, the supply chain readiness provides significant operational advantages.

The technical implementation proves relatively straightforward. Methanol requires only minor modifications to existing liquid fuel systems, primarily addressing its high flammability and low flashpoint characteristics. However, critical safety considerations include methanol’s toxicity, nearly invisible flame characteristics and corrosive properties which require specialized materials or coatings.

Dual-fuel methanol engines utilizing high-pressure diesel combustion processes achieve equivalent performance to traditional engines with no fuel slip, thereby preventing formaldehyde formation. The regulatory framework, established through IMO’s Interim Guidelines for Low-Flashpoint Fuels (November 2020), provides clear compliance pathways.

Notable infrastructure developments include over 10 green methanol projects announced in China alone for 2024, with production capacity ranging from 150,000 to 1 million tonnes per annum, positioning the fuel for significant availability expansion.

The Potential for a Carbon-Free Fuel

Ammonia is an emerging long-term decarbonization solution, offering near-zero emissions potential due to its carbon-free composition. Unlike other alternative fuels requiring biogenic carbon sources, green ammonia can be produced entirely from renewable electricity and nitrogen.

However, ammonia as a marine fuel introduces complex safety challenges. Its high toxicity requires continuous mechanical ventilation, gas dispersion analysis for toxic area determination and specialized emergency response protocols. The fuel’s narrow flammability range (15-28% volume in air) and rapid diffusion characteristics demand careful containment system design and comprehensive crew training.

Engine development remains in early stages, with approximately 50 firm orders as of February 2025. The technology focuses on either Diesel cycle engines (offering superior emissions control) or Otto cycle engines (requiring extensive aftertreatment systems). Ammonia’s high heat of vaporization provides natural NOx control, but unburnt ammonia slip management requires selective catalytic reduction systems.

Economic and Operational Implications

The economic analysis reveals complex trade-offs across fuel types. Initial investment costs vary significantly, with LNG systems typically representing the highest capital expenditure due to containment complexity. Methanol systems may prove most economical for onboard modifications, and ammonia systems fall between these extremes.

Fuel costs are evolving. By 2030, recent projections show conventional LNG at $550/MT, biomethanol at $600/MT and blue ammonia at $500/MT. However, green variants remain more expensive: e-LNG at $2,200/MT, synthetic methanol at $1,100/MT and green ammonia at $650/MT, though these costs are expected to decline significantly towards 2050 as production scales.

Regulatory compliance costs favor alternative fuels substantially. Compared to the use of conventional fuels, EU ETS scenarios show LNG vessels achieving up to 25% cost reductions, methanol vessels 15% reductions, and ammonia vessels potentially 80% reductions. FuelEU Maritime compliance varies dramatically by fuel type – gray LNG provides compliance until 2040, while gray methanol and ammonia create immediate non-compliance requiring green alternatives.

Successful dual-fuel vessel implementation requires careful attention to specific design elements. For LNG vessels, selecting non-hazardous machinery spaces minimizes complexity while Type C tanks offer optimal cost-effectiveness for most applications. Membrane tanks suit larger vessels but require enhanced BOG management and sloshing considerations.

Technical Implementation Priorities

Methanol vessels require nitrogen blanket systems for tank vapor spaces, infrared flame detection equipment (due to nearly invisible flames), and corrosion-resistant materials throughout fuel systems. Liquid handling systems enable the conversion of existing ballast tanks with appropriate modifications.

Ammonia vessels require the most comprehensive safety systems: independent ventilation for ammonia spaces, gas dispersion analysis for toxic area determination and specialized materials meeting IGC Code Section 17.12 requirements. The interdependence between fuel storage, preparation and consumption systems demands integrated design approaches.

Strategic Considerations for Shipowners

The optimal dual-fuel solution will depend on vessels operational profiles, regulatory environments, fuel availability in anticipated regions of operation, and the owner’s long-term strategic goals. LNG offers immediate deployment advantages with established infrastructure and proven technology. Methanol provides practical implementation with growing green fuel availability. Ammonia, while coming with current technological limitations and increased safety complexities that must be addressed, presents the strongest potential for long-term regulatory compliance. Techno-economic analyses suggest replacement vessel scenarios achieve breakeven points between 10-18 years when vessels operate sufficiently in regulatory zones to monetize compliance advantages. The adoption of global IMO greenhouse gas market-based measures would accelerate these timelines through worldwide applicability.

Balancing Cost with Technological and Operational Challenges

The maritime industry’s energy transition efforts, demands the careful navigation of technological maturity, regulatory compliance, operational safety, capital investment.

Each dual-fuel pathway offers distinct advantages and challenges, requiring shipowners to consider the immediate operational needs while addressing long-term fuel efficiency and emissions reduction. Success will ultimately depend on matching fuel selection to specific operational requirements while maintaining a strong commitment on safety and environmental performance.

ABS is committed to supporting the maritime industry’s decarbonization objectives by providing technical guidance for the latest evolution in fuel flexible technology solutions.

ABS provides requirements for the use of alternative and DFs on board:

• ABS Rules for Building and Classing Marine Vessels (MVR)
• ABS Requirements for Methanol and Ethanol Fueled Vessels (2024)
• ABS Requirements for Ammonia Fueled Vessels (2023)
• ABS Guide for Gas and Other Low-Flashpoint Fuel Ready Vessels

In addition, ABS provides guidance on the topic:

• ABS Advisory on Gas and Other Low-Flashpoint Fuels
• ABS Bunkering of Liquefied Natural Gas-Fueled Marine Vessels in North America (Second Edition)
• ABS LNG Bunkering: Technical and Operational Advisory
• ABS Methanol Bunkering: Technical and Operational Advisory (2024)
• ABS Ammonia Bunkering: Technical and Operational Advisory (2024)
• ABS Sustainability Whitepaper Ammonia as Marine Fuel (2020)