Shipbuilding plays a crucial role in achieving a sustainable maritime future, particularly in driving the decarbonisation of the sector. According to the OECD report on maritime decarbonisation, there’s a growing trend towards “fuel optionality,” with LNG-capable vessels representing 37% of the current orderbook by gross tonnage. Methanol-capable ships follow at 9.7%, while ammonia-capable vessels account for just 0.55%. While technologies such as battery and hybrid propulsion are emerging, their overall adoption remains minimal.
A noticeable concentration of design and shipbuilding capabilities exists within the industry. Chinese shipyards dominate the market, constituting 47% of the orderbook for alternative fuel-capable vessels, closely followed by South Korea at 42%. The report states that the production of methanol and ammonia-capable ships is largely concentrated in Korea, China, and Japan, while European engine manufacturers supply over 65% of the alternative fuel-capable fleet and orders. The retrofitting of existing vessels to accommodate energy-saving technologies and alternative fuels has increased, more than doubling since 2020.
Despite this growth, these activities still represent less than 1% of all retrofits and repairs. The report identifies a bottleneck in fuel conversions, which take significantly longer compared to other retrofits, hinting at potential capacity limitations as demand for eco-friendly options rises. As of 2024, the capacity of shipyards to construct low or zero-emission vessels is expanding. However, growth is uneven across ship types.
Although LNG leads in constructions, there is a worrying slowdown in patenting activity for low-carbon technologies, despite substantial pressure to decarbonise. Variability in commitment levels towards sustainability is observed among major shipbuilders. The availability of alternative fuel infrastructure is vital for progress. Currently, global plans for such infrastructure are in the planning stages, facing uncertainties regarding production, supply chains, and safety.
Government policies tend to focus on the shipping sector rather than directly supporting shipbuilding. As a result, funding for the transition to greener practices remains a substantial hurdle, underscoring the need for increased governmental support to encourage investment in sustainable technologies.