A new joint report by GCMD and BCG warns that while dual-fuel engines and current regulations will drive a surge in alternative engine capacity, actual consumption of new fuels will stall without a robust global carbon price of USD 700/tCO2e by 2050. The study reveals that e-methanol and e-ammonia will reach near cost-parity due to offsetting production and safety-logistics costs, with their long-term uptake heavily sensitive to hydrogen and biogenic feedstock prices. Ultimately, these economic shifts will transform global bunkering, reinforcing traditional hubs for liquid fuels while giving rise to specialized production-linked and import-aggregation hubs for ammonia.
Singapore | September 17, 2026 – With commercial vessels operating on a 25-to-30-year lifecycle and a sluggish annual fleet renewal rate of roughly 4%, engine decisions made over the coming decade will effectively lock in shipping’s operational pathways through 2050. A newly released joint model by the Global Centre for Maritime Decarbonisation (GCMD) and Boston Consulting Group (BCG), titled Navigating the maritime fuel transition: How fuel economics, regulations, and fleet decisions shape the future bunkering landscape, highlights a critical reality: more than half of the vessels operating in 2050 will come from orders placed before 2035.
However, the report underscores a major disconnect in current maritime strategy. engine capacity to burn a new fuel does not guarantee its actual uptake.
The Policy Pivot: Why Carbon Pricing Trumps Dual-Fuel Capacity
While dual-fuel engines give shipowners the operational flexibility to switch between conventional bunker fuels and emerging alternatives as regulations shift, what vessels ultimately consume boils down to strict economics.
- The Base Scenario Reality: Under the IMO Net-Zero Framework’s Tier-2 penalty held steady at USD 380/tCO2e through 2050, methanol dual-fuel engines are projected to account for roughly 10% of total fleet engine capacity by mid-century. Yet, because conventional marine fuels remain far more economical under this regime, methanol will represent a mere 2% of actual fleet energy consumption.
- The USD 700/tCO2e Tipping Point: The transition dynamics change dramatically if the global carbon price signal climbs to USD 700/tCO2e by 2050. Under this ambitious pricing environment, new fuels (including drop-ins) surge to approximately 60% to 61% of total fleet energy consumption.
- The Regional Limitation: The report stresses that regional mandates alone, such as European Union regulations. will fail to drive a broad global shift, given that they cover only about 20% of international shipping’s total energy demand.
Cost Parity: E-Methanol vs. E-Ammonia
As the industry looks toward scalable green power, the GCMD-BCG model reveals that there is no clear cost winner between e-methanol and e-ammonia:
- Near Cost Parity: The overall levelised cost of using e-methanol and e-ammonia remains at near parity through 2050.
- Offsetting Advantages: While e-ammonia retains a primary production cost advantage, its handling logistics introduce heavy financial offsets due to toxicity risks. These include mandatory specialized crew training, larger safety exclusion zones, and significantly more complex bunkering operations.
Key Uncertainties and Sensitivities Shaping Fuel Pathways
The research maps out four core variables that can drastically alter the competitiveness of specific fuel technologies:
- Levelised Cost of Hydrogen (LCOH): A primary sensitivity for both e-methanol and e-ammonia. Dropping the LCOH from USD 3/kg H2 down to USD 2/kg H2 by 2050 could allow methanol and ammonia to capture 36% of global fleet energy demand, a striking 32 percentage point (pp) increase over higher hydrogen cost scenarios.
- Biogenic CO2 Costs: At an LCOH of USD 2/kg H2, the price of biogenic CO2 dictates the split between methanol and ammonia. As biogenic CO2 costs escalate from USD 50/t to USD 150/t, methanol’s fleet share drops from 23% to 14%, while ammonia’s share rises from 14% to 22%.
- Bio-Methanol Trajectories: Near-term bio-methanol cost trends will heavily dictate the early uptake of methanol dual-fuel engines, directly influencing long-term technology lock-in.
- Food-Crop Regulations: Ethanol adoption remains highly sensitive to evolving regulatory frameworks governing food-crop biofuels.
Evolution of the Global Bunkering Landscape
These structural shifts in fuel economics will redefine physical bunkering hubs worldwide:
- Liquid Fuels (Methanol & Ethanol): Because they are relatively straightforward to transport and bunker, liquid options will primarily reinforce established, traditional bunkering hubs.
- Ammonia Hub Archetypes: Due to strict handling requirements and higher transport economics, ammonia is expected to fracture the landscape into two distinct port archetypes:
- Production-linked hubs: Competing directly on access to low-cost fuel sources.
- Import-aggregation hubs: Competing on scale by pooling maritime demand alongside adjacent industrial and power sector demand.
Ultimately, port competitiveness will no longer rely merely on basic fuel availability, but on a complex matrix of fuel costs, vessel traffic density, and local demand aggregation capabilities.
Industry Perspectives
“Many vessels ordered over the coming decade will still be operating in 2050. Shipowners are therefore making long-lived engine choices before the relative economics of future fuels are clear. Our modelling puts into perspective just how difficult closing the cost gap between new and conventional fuels will be. The carbon price required to close this gap is substantial. And achieving it will be particularly challenging in today’s geopolitical environment.” said, Professor Lynn Loo, CEO of GCMD
“The maritime fuel transition is being shaped as much by policy and cost uncertainty as by technology readiness… Our hope is that this gives shipowners, fuel suppliers, port operators, and infrastructure investors a practical tool to stress-test their own fuel strategies as conditions change.” said, Anand Veeraraghavan, Managing Director & Senior Partner at BCG
Industry stakeholders can access the full report and explore the interactive scenario-planning dashboard to test how varying policy and cost assumptions influence engine adoption through 2050 via the GCMD portal.
About the Global Centre for Maritime Decarbonisation
The Global Centre for Maritime Decarbonisation (GCMD) is an international, independent action tank established on August 1, 2021, to help international shipping decarbonise through pilots and trials. Its mission is to support decarbonisation across four pillars: shaping standards, deploying solutions, financing projects, and fostering cross-sector collaboration.
GCMD was founded with the support of industry partners, alongside funding from the Maritime and Port Authority of Singapore (MPA) for qualifying research and development programmes. Since its inception, GCMD has expanded its ecosystem to include more than 130 centre- and project-level partners who contribute funds, expertise, and in-kind support to pilot, accelerate the deployment, and scale the adoption of decarbonisation solutions.
GCMD has launched four key initiatives to close technical and operational gaps in:
- Enabling ammonia as a marine fuel
- Developing an assurance framework for drop-in green fuels
- Unlocking the carbon value chain through onboard carbon capture and articulating the value chain of captured carbon dioxide
- Closing the data-financing gap to scale the adoption of energy efficiency technologies
GCMD is strategically located in Singapore, the world’s largest bunkering hub and busiest transshipment port.
About Boston Consulting Group
Boston Consulting Group (BCG) bridges the gap between ambition and outcomes for the world’s leading companies and organizations. Built for an era of unprecedented change, BCG brings strategic clarity rooted in over 60 years of deep domain knowledge, combined with applied AI shaped by its practitioners. BCG works shoulder-to-shoulder with CEOs across industries and geographies to deliver transformative impact at scale: stronger returns, transferred capabilities, and lasting change.
Source: GCMD