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Clarksons: 45% of all newbuild orders placed in 2023 alternative fuel capable

Clarksons Research have today released their latest Green Technology Tracker, including full year 2023 data points, charting the progress of alternative fuel uptake and investments in energy saving technologies across the global shipping fleet. Summarising the latest Tracker, Steve Gordon, Global Head of Clarksons Research, commented:

“2023 was a hugely significant year in the shipping industries decarbonisation pathway, with new regulation entering into force and a net zero commitment agreed at IMO. And while we remain only at the start of a vital and unprecedented fleet renewal investment program, a start has been made with 49% of current orderbook tonnage now alternative fuelled. Across 2023, we recorded ~539 newbuild orders involving alternative fuel capable vessels, 45% of all orders placed by tonnage. The largest share of alternative fuelled orders in 2023 was still LNG dual fuel (220 orders, of which 152 were non LNG Carriers), albeit with an increase to 125 orders of methanol dual fuel vessels in 2023. There were also 55 new orders involving LPG as a fuel and now 4 with Ammonia. Reflecting future “optionality”, there are 579 in fleet and newbuilds that have LNG “ready” status, 322 that are Ammonia “ready” and 272 that are Methanol “ready”. Take up has also varied across shipping segments, with 83% of containership newbuild capacity ordered this year (rising to 94% including orders with “ready” status) and 79% of car carriers (98% including “ready” orders) ordered with alternative fuel capability but much lower shares in bulk carrier and tanker. Overall today, 6% of global fleet capacity is alternative fuelled capable (up from 2.3% in 2017), which we project will increase to nearly a quarter of all fleet capacity by the end of the decade (2030(f):~23%).

There are other important developments, with “eco” vessels now constituting 32% of global tonnage on the water (as high as 50% in VLCC and Capesize) and the use of innovative Energy Saving Technologies (ESTs) continuing to expand (~7,295 vessels in the fleet have significant ESTs, including 47 with wind propulsion). Our tracker also includes 31 in fleet vessels (plus 22 newbuidls) testing onboard carbon capture technology. With an ageing fleet (12.6 years, up from 9.7 years ten years ago) and our tracking of vessel performance under CII in 2023 suggesting over 30% of tonnage will be D or E rated, continued investment in the existing fleet will be critical.

Our tracking of SOx Scrubbers has also increased y-o-y (totalling, including pending retrofits, over 5,590 vessels in the fleet, 27% of global fleet capacity) with 420 vessels retrofitted with a scrubber during 2023 and 321 newbuildings ordered with a scrubber. We also estimate that over 80% of global tonnage is now fitted with a BWMS.”

Attached is the latest version of the Clarkson Research Green Technology Tracker and below further commentary on the data points :

In 2023, 539 units of 33.8m GT ordered were reported to have alternative fuel capability, ~45% of total GT ordered. This includes 218 LNG capable ships of 18.9m GT (~25% of total ordering), 130 methanol capable vessels of 10.3m GT (13%), and 44 LPG capable vessels, while 121 units are set to be equipped with battery-hybrid propulsion. This follows full year 2022, when a record ~55%* of all newbuild orders by tonnage (GT) were alternative fuel capable (basis non-LNG carriers: ~40% of tonnage). For context, in 2021 31% of newbuild tonnage ordered was for alternative fuel capable vessels, up from 27% in 2020 and 8% in 2016.

Uptake of alternative fuels has continued to progress, with 6.0%** (start 2022: 4.5%, 2017: 2.3%) of the fleet on the water and 48.8% (start 2022: 33.6%, 2017: 10.9%) of the orderbook in tonnage terms capable of using alternative fuels or propulsion.

Of the total orderbook, 37.4% of tonnage is set to use LNG (916 units), 8.3% to use methanol (203 units), 1.7% to use LPG (84 units) and ~3.3% due to use other alternative fuels (~379 units) including hydrogen (8), ethane (43), biofuels (10) and battery/hybrid propulsion (~310).

With future optionality over fuel choice continuing to gain traction, there are now 444 LNG ready ships in the fleet and 135 on the orderbook, while there are 249 ammonia ready, 247 methanol ready and 14 hydrogen ready vessels on order.

Energy saving technologies (ESTs) have been fitted on over 7,295 ships, accounting for 29.5% of fleet tonnage: this includes propeller ducts, rudder bulbs, Flettner rotors, wind kites, air lubrication systems and others.

Scrubbers are now fitted or set to be fitted to over 5,550 ships in the fleet, equivalent to 27.2% of total tonnage. Scrubber retrofitting activity and newbuild uptake has increased y o y, with 420 vessels retrofitted with a scrubber and 321 scrubber fitted ships reported ordered in 2023. Price differentials between HSFO and VLSFO stand at ~$150/tonne in key ports, down from closer to $200/tonne earlier in 2023.

‘Eco’ ships make up a growing share of the fleet (‘modern’ eco vessels now 31.8% of total GT) with implications for earning potential, asset values and increasingly “tiered” and complex charter markets. For context, we estimate that 27.1% of global tonnage was ‘eco’ as of start 2022, and just 14.6% at start-2018.

The average age of the world fleet is increasing, standing at 12.6 years on a GT weighted basis (up from a low of 9.7 years in 2013). For the bulkcarrier fleet, the average age is 12.0 years, for tankers it is 12.9 years and for the container fleet it is 14.2 years. Today, 32% of global tonnage is aged over 15 years. We estimated that under CII, around 45% of today’s tanker, bulkcarrier and container fleets will be D or E rated if they are still trading in 2026 and have not modified speed or specification.

The overall orderbook as a % of fleet capacity remains historically moderate at ~11%, though with significant variation between sectors – the LNG carrier and containership orderbooks equal ~52% and ~25% respectively, while bulkers and tankers equal just ~9% and ~7%.

‘Green’ port infrastructure is continuing to expand: currently there are 188 active LNG bunkering ports (and 82 planned facilities), while over 2,743 vessels in the fleet are fitted/set to be fitted with shore power connections; Clarksons Research are also collecting data on ammonia and hydrogen infrastructure, and carbon capture projects.
BWMS retrofit programme ongoing: majority of fleet tonnage (over 80%) now BWMS-fitted.
Source: Clarksons Research

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