Houston, USA – The American Bureau of Shipping (ABS) has released its “ABS Advisory for Dual-Fuel Solutions for Newbuild Vessels,” a critical guide for the maritime industry as it grapples with intensifying regulatory pressure to decarbonize. Issued on May 1, 2025, this comprehensive publication provides in-depth insights into the regulatory landscape, economic implications, design considerations, and, crucially, bunkering operations for a range of alternative fuels.
The advisory emphasizes that dual-fuel (DF) propulsion is emerging as a pivotal strategy for shipowners to reduce greenhouse gas (GHG) emissions and future-proof their assets amid stringent upcoming regulations from bodies such as the International Maritime Organization (IMO) and the European Union (EU). The industry’s focus is shifting from “Tank-to-Wake” (TtW) to a “Well-to-Wake” (WtW) emissions evaluation, which considers the entire lifecycle of fuels—from production to combustion.
ABS’s advisory meticulously examines three primary alternative fuels for newbuild DF vessels: liquefied natural gas (LNG), methanol, and ammonia. It highlights their unique characteristics and bunkering relevance, along with a crucial analysis of their cost implications. Choosing a DF propulsion option requires balancing higher initial investment costs against potential operational savings and varying degrees of regulatory compliance over time.
Key Dual-Fuel Options and Their Bunkering Relevance
The primary factors influencing DF vessel costs include fuel prices, regulatory compliance costs, initial investments, and the impact on chartering.
1. DF LNG Vessels
- Maturity: LNG is the most mature marine fuel, supported by decades of experience with LNG carriers and a well-established global bunkering infrastructure. Technology for containment systems and engines is highly advanced.
- Emissions & Compliance: LNG offers significant emissions reductions compared to conventional fuels. A DF LNG vessel with a two-stroke diesel-cycle engine has a WtW GHG intensity of approximately 76.1 gCO₂e/MJ, ensuring compliance (with surplus) with FuelEU Maritime until around 2040. Adding biogas (e.g., 30% Bio-LNG) can extend compliance beyond 2040.
- Bunkering Challenges: LNG bunker vessels are more complex than conventional fuel oil barges, requiring compatibility with temperature and pressure controls, vapor return systems, and potentially vapor measurement for custody transfers. Boil-off gas (BOG) management is critical, possibly requiring reliquefaction systems or gas combustion units. Methane slip remains a long-term compliance challenge.
- Safety: Non-hazardous machinery spaces are recommended, with gas-containing components protected by double barriers.
- Tank Types: IMO Type C pressurized tanks are typically used for smaller vessels due to cost and simplicity. Larger deep-sea vessels may opt for membrane or Type B tanks to maximize cargo space.
- Cost Snapshot (2025 Approx.):
- LNG: $800/MT
- Bio-LNG: $1,100/MT
- e-LNG: $2,700/MT
- Regulatory Compliance: ~25% cost reduction vs. conventional fuels (subject to methane slip).
- Investment Cost: Highest among DF options due to complex cryogenic systems.
2. DF Methanol Vessels
- Emerging Viability: Methanol is gaining traction due to its lower carbon footprint and simpler onboard handling compared to LNG.
- Infrastructure: Benefits from existing global infrastructure due to its use in the chemical industry. Conventional bunker vessels can be modified for methanol delivery.
- Emissions & Compliance: Methanol offers a ~15% CO₂ reduction (TtW) vs. marine gas oil (MGO). Green variants (biomethanol, synthetic methanol) are essential for long-term compliance, as gray methanol (102.9 gCO₂e/MJ) will result in FuelEU Maritime compliance deficits from 2025. NOx reductions of 40–50% are achievable but require aftertreatment or water blending for IMO Tier III compliance.
- Bunkering Challenges & Safety:
- Low energy density necessitates larger tanks (~2.5x MGO volume).
- High flammability and invisible flames require infrared detection and stringent fire protection.
- Toxicity and corrosiveness demand special materials, PPE, and crew training.
- Nitrogen inerting is needed; CO₂ is unsuitable due to corrosion risks.
- CO₂ fire extinguishing systems require ~25% more CO₂ capacity than for conventional fuels.
- Bunkering Practice: Similar to conventional fuel oil due to its liquid state at ambient conditions. Adequate ventilation—preferably on open deck—is essential.
- Cost Snapshot (2025 Approx.):
- Biomethanol: $710/MT
- Synthetic methanol: $1,400/MT
- Regulatory Compliance: ~15% cost reduction vs. conventional fuels
- Investment Cost: Lowest among DF options due to simplicity in storage and handling.
3. DF Ammonia Vessels
- Promising Carbon-Free Fuel: Ammonia offers near-zero carbon emissions (excluding pilot fuel) and can ensure long-term compliance under FuelEU Maritime if green ammonia (~8 gCO₂e/MJ) is used.
- Emissions & Compliance: While ammonia combustion produces water and nitrogen, unburnt ammonia and nitrous oxide (N₂O) emissions must be carefully managed. Gray ammonia (121 gCO₂e/MJ) will be non-compliant and costly.
- Bunkering Challenges & Safety:
- Highly toxic, even at low concentrations.
- Requires refrigeration at -33°C to remain liquid at atmospheric pressure.
- Less flammable in open air but presents risks in confined spaces.
- Corrosive to materials like copper and zinc.
- Low energy density (~3.1x MGO volume required) impacts cargo space and bunkering frequency.
- Safety measures include water spray, PPE, emergency ventilation, and robust spill control.
- Technology Maturity: Still under development; less mature than LNG or methanol systems.
- Bunkering Practice: Similar to LNG/LPG bunkering but with enhanced safety protocols due to toxicity.
- Cost Snapshot (2025 Approx.):
- Blue ammonia: $670/MT
- Green ammonia: $950/MT
- Regulatory Compliance: ~80% cost reduction vs. conventional fuels (depending on pilot fuel and N₂O slip)
- Investment Cost: High; containment costs may be lower than LNG but higher than methanol.
Regulatory Landscape and Economic Implications
The advisory outlines several key regulatory drivers:
- IMO GHG Strategy (2023):
Targets at least a 40% carbon intensity reduction by 2030 and net-zero GHG emissions by 2050, with interim checkpoints. Market-based measures (MBMs) are expected to emerge, possibly aligning with EU mechanisms. - EU Emissions Trading System (EU ETS):
Applied to maritime from January 2024. Operators must purchase allowances for CO₂ emissions. N₂O emissions will be included from 2026, affecting LNG and ammonia-fueled ships. - FuelEU Maritime (2025):
Enforces annual GHG intensity limits based on WtW emissions. Vessels failing to meet targets face penalties; surplus compliance earns credits, which can be pooled or rolled over, helping monetize over-compliance.
Dual-fuel vessels typically have lower regulatory compliance costs than conventional ships, which risk becoming uncompetitive due to penalties. While retrofitting may not yield full ROI, replacing older vessels with new DF builds can offer a breakeven point of 10–18 years—shorter for vessels operating heavily in the EU. Global adoption of IMO MBMs could shorten payback periods further. Additionally, DF vessels may command better charter rates, while conventional tonnage may face reduced earnings.
Final Note
This comprehensive advisory is an indispensable resource for the bunkering and maritime sectors. It offers vital information for strategic planning and investment in the rapidly evolving landscape of shipping decarbonization. The full “ABS Advisory for Dual-Fuel Solutions for Newbuild Vessels” is available for download on the ABS website.
About the American Bureau of Shipping (ABS)
The American Bureau of Shipping (ABS) is a leading international classification society dedicated to promoting the security of life, property, and the natural environment through the development and verification of standards for the design, construction, and operational maintenance of marine and offshore assets. Founded in 1862 and headquartered in Houston, Texas, ABS supports the global maritime industry with cutting-edge technical services, regulatory compliance guidance, and innovative solutions that drive sustainability, safety, and performance.
With a strong presence in over 70 countries, ABS works closely with shipowners, operators, shipyards, equipment manufacturers, and regulators to deliver practical insights into evolving technologies and environmental standards. As a trusted advisor, ABS plays a pivotal role in enabling the transition to low- and zero-emission shipping through research, classification, and advisory services on alternative fuels, digitalization, and decarbonization pathways.
Source American Bureau of Shipping