WMU: Alternative-fuel fleets grow as new investment slows

Shipping’s transition toward alternative fuels continues to advance, but regulatory uncertainty, fuel availability and infrastructure gaps are complicating long-term investment decisions.

According to the Global Green Shipping Development Report 2025–2026, jointly prepared by the World Maritime University (WMU) and the Shanghai International Shipping Institute (SISI), alternative-fuel fleets are expanding even as shipowners become more cautious about new investments. The report published in November, examines developments from October 2025 to September 2026.

The findings highlight a growing disconnect between the pace of regulatory implementation and the development of fuel markets, technologies and supporting infrastructure. As shipping companies navigate these uncertainties, energy efficiency is emerging as an increasingly important means of reducing emissions and controlling operating costs.

Regulatory uncertainty complicates investment decisions

A central finding of the report is that progress toward globally harmonized emissions regulations has slowed, while regional requirements continue to advance.

The postponement of the IMO Net-Zero Framework’s adoption in October 2025 left important questions unresolved regarding greenhouse gas fuel intensity standards, carbon pricing and implementation arrangements. Meanwhile, the EU Emissions Trading System (EU ETS) and FuelEU Maritime are already influencing fuel choices, operating costs and compliance strategies.

This divergence has created a more complex regulatory environment for shipping companies, which must comply with existing regional requirements while maintaining flexibility to respond to future global measures.

The report also warns that prolonged delays in international regulations could narrow the time available for fleet renewal, green fuel production and infrastructure development if long-term emissions reduction targets remain unchanged.

For shipowners, these developments make decisions about vessel renewal, retrofits and fuel selection increasingly consequential, particularly given the long operational life of ships.

Alternative-fuel fleets expand despite slower investment

Despite regulatory and commercial uncertainties, the global alternative-fuel fleet continues to grow, although new investment has become more cautious.

According to the report, drawing on Clarksons data, alternative-fuel vessels represented 41.6% of the global newbuilding orderbook by gross tonnage in September 2026, compared with 50.3% in January 2024.

Key findings on alternative-fuel fleet development include:

• 3,218 alternative-fuel vessels were in service worldwide as of September 2026, accounting for 10.5% of the global fleet by gross tonnage.
• 2,262 alternative-fuel vessels were on order, representing 41.6% of the global orderbook by gross tonnage.
• 1,729 LNG-fueled vessels were in service, with another 1,195 on order.
• 178 methanol-fueled vessels were operating, while 283 were on order.
• 576 alternative-fuel vessel orders were placed in 2025, a 27% decline compared with the previous year.

However, the report emphasizes that the decline in orders should not be interpreted as a reversal of the green transition. Instead, it largely reflects a cooling of the overall newbuilding market and adjustments in the pace of investment.

The development of different fuel pathways also remains uneven. LNG continues to be a major choice for alternative-fuel newbuildings, while the methanol-powered fleet is expanding despite slower ordering activity. Meanwhile, ammonia, hydrogen and battery technologies are progressing through different stages of development and commercial application.

The report identifies fuel availability, prices, supporting infrastructure and life-cycle emissions performance as increasingly important factors shaping investment decisions.

As a result, shipowners are expected to place greater emphasis on vessel types, trading routes, fuel supply arrangements and total cost of ownership, while maintaining flexibility in their fleet and fuel strategies.

Energy efficiency offers a practical response

With uncertainty surrounding future fuel pathways, the report identifies energy efficiency as a practical approach to reducing emissions and operating costs.

Unlike investments tied to specific alternative fuels, efficiency improvements can deliver benefits across different propulsion systems and regulatory scenarios.

During the first half of 2026, approximately 48% of global fleet tonnage had been fitted with at least one energy-saving technology. These included hull optimization, propulsion system retrofits, air lubrication, wind-assisted propulsion and digitalized vessel operations.

The economic value of these improvements is expected to increase as shipping adopts more expensive low-greenhouse-gas fuels, including green methanol and green ammonia. Lower energy consumption can help reduce both fuel expenditure and carbon-related compliance costs.

Nevertheless, the report stresses that the effectiveness of energy-saving measures depends on vessel characteristics, trading routes and operating conditions. Shipowners therefore need to combine technical improvements with operational measures, including speed management and performance monitoring.

Verifying actual savings through operational data is also important to ensure that investments deliver the expected environmental and financial benefits.

Alternative fuels bring new training and operational requirements

The expansion of alternative-fuel technologies also has implications for shipboard operations and seafarer competence.

The report examines the ongoing comprehensive review of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), alongside the IMO’s work to develop training provisions for vessels using alternative fuels and new technologies.

In 2026, interim training guidelines for seafarers working on methanol- and ammonia-fueled ships were approved, while a work program extending to 2029 addresses additional technologies, including hydrogen fuel cells, LPG, hydrogen, battery power and wind propulsion.

These developments reflect the need to adapt seafarer competencies to different fuel characteristics, equipment configurations and operational risks.

For ship operators, this points to the importance of ensuring that crew familiarization, emergency preparedness, maintenance procedures and fuel-specific safety measures develop alongside the introduction of new technologies.

The report also examines progress in port infrastructure and alternative-fuel bunkering capabilities, underscoring the importance of matching vessel technology with suitable fuel supply and shore-based facilities.

Green competitiveness extends beyond vessel technology

Beyond individual technologies, the report concludes that shipping’s green transition increasingly depends on the ability of companies to manage several interconnected challenges.

Alongside fleet renewal, shipping companies are strengthening their fuel procurement arrangements, energy efficiency management, carbon cost management and low-carbon transport services.

Long-term fuel supply agreements, carbon data management and cooperation with cargo owners are becoming more relevant as companies seek to manage transition risks and respond to customers’ emissions reduction requirements.

Ports are also taking on a greater role through investments in alternative-fuel bunkering infrastructure, shore power facilities and green shipping corridors.

The report suggests that future competitiveness will depend not only on the adoption of alternative-fuel vessels, but also on companies’ ability to coordinate fuel availability, regulatory compliance, operational efficiency and long-term investment decisions.

source : safety4sea