Global Alternative Fuels
In April 2025, members of the International Maritime Organization (IMO) reached agreement on a Net‑Zero Framework, including a mandatory marine fuel standard that phases in cleaner fuels and a global carbon-pricing mechanism, initially set at ~US $100/ton of carbon dioxide, which would begin applying from 2028. Amendments to MARPOL Annex VI make the agreement legally binding.
The U.S. government withdrew from those talks and threatened reciprocal measures against any fees imposed on its ships. There is still some uncertainty as to how things will unfold and how this might impact U.S. flagged vessels and ports. Globally, at least, changes are occurring and are providing some new opportunities for exporters, improved reliability of the supply chain and availability of some of these fuels.
Despite a general slowdown in vessel construction, global maritime class society DNV issued a report July 1 noting that the building of alternative-fuel vessels is increasing. According to data released by DNV’s Alternative Fuels Insight (AFI) platform, new orders for alternative-fueled vessels reached 19.8 million gross tons in the first half of 2025, representing a 78 percent increase compared to the same period in 2024. While the 151 vessels ordered was a lower number than the 179 ordered in the first half of 2024, the increase in gross tonnage “reveals a focus on larger vessels adopting cleaner fuel technologies.”
“We’re seeing a broader shift take hold across the industry,” said Knut Ørbeck-Nilssen, CEO of maritime at DNV. “The energy transition is no longer driven solely by first movers. It’s now being shaped by a second wave of ship owners who are integrating alternative fuels and technologies into their core strategies.”
LNG and methanol are the most popular alternative fuels to date, with LNG accounting for 13.6 million gross tons and methanol for 40 vessels totaling 4.6 million gross tons across multiple segments, including container, RoPax, tanker, offshore and car carrier.
LNG and methanol are both mature technologies with a growing amount of infrastructure in place. The first half of 2025 saw orders for 13 new LNG bunkering vessels, adding to the 62 already in operation globally. Three ammonia-fueled vessels were ordered for tanker and general cargo operations, and four hydrogen-powered vessels are on order.
The IMO’s mandates only apply to vessels of more than 400 gross tons engaged in international trade, but these global developments could benefit the five Gulf Coast LNG facilities currently in operation, with 12 more in various stages of planning or permitting. The mandates also possibly could benefit U.S. methanol markets and the export supply chain for alternative fuels.
Trump’s EPA has proposed increasing biofuel blending mandates, including higher volumes for biomass-based diesel. The one form of alternative energy the Trump administration favors, which is also strongly backed by the ag community, is biofuels, including biodiesel and methanol.
Will biofuels gain momentum and fuel line boats along our inland waterways in the future? Will more Great Lakes ships convert to biofuel? It will be interesting to see how this global trend changes U.S. shipbuilding and fuel usage over the next decade.
