In a recent analysis, Lloyd’s Register (LR) finds that while ordering activity softened compared to 2024 levels, orders for alternative-fuel capable vessels maintained strong momentum in 2025.
According to LR analysis of Clarkson’s data, in 2025, owners ordered 590 merchant and leisure vessels totalling 45.5m gt capable of operating on alternative fuels at delivery. The total alternative fuel capable orderbook now stands at 1,942 ships with 1,259 set to use LNG, 385 to use methanol, 139 using LPG, 53 vessels equipped to use hydrogen, 55 ethane, 45 ammonia, 22 biofuel and 4 nuclear-capable.
These vessels helped to grow the future alternative-fuel capable fleet, both in-service and on order, to 4,542 vessels (294.7mGT), equivalent to 2.1% of the global fleet and orderbook tonnage.
However, with the International Maritime Organization’s (IMO) 2030 target on zero and near-zero emission energy potentially less than five years away, orders will need to accelerate further to meet the proposed 5%-10% of shipping energy consumption using new fuels. In European waters, FuelEU Maritime already compels operators to reduce their emissions and transition to new fuels.
Alternative fuel trends and numbers
- 1 LNG (Liquefied Natural Gas)
Reigns as shipping’s favorite alternative fuel: 407 vessels ordered LNG-capable in 2025.
Popular with container ships, tankers, and gas carriers.
Instant CO₂ savings compared to conventional fuels.
Hurdles ahead: tackling methane slip and moving toward bio- and synthetic LNG for true decarbonization.
- 2 Methanol
Still turning heads: 134 vessels ordered methanol-capable.
Strong contender in the alternative fuel mix.
- 3 LPG (Liquefied Petroleum Gas)
24 new LPG-capable vessels in 2025.
Mostly used by LPG carriers for now, but ripe for expansion into other ship types.
- 4 Ammonia
6 vessels ordered ammonia-ready.
Progress includes design approvals in principle, but supply and regulations need catching up.
- 5 Hydrogen
13 hydrogen-capable vessels on order.
Catching attention in ferries and shallow-draft vessels.
Fuel cells offer a zero (or near-zero) emissions path.
- 6 Biofuels
11 biofuel-capable newbuilds in 2025, up from 8 in 2024.
Practical, ready-now solution for cutting emissions in existing fleets.
Quality and variety are growing, with FAME-based blends like B30 RF gaining ground in ports like Singapore, Algeciras, and Antwerp.
- 7 Nuclear
Nuclear remains a longer-term and highly regulated prospect
Retrofit momentum grows
Beyond fuel choice, LR’s 2025 Engine Retrofit Report revealed the resurgence of LNG retrofits as shipowners sought immediate carbon reduction strategies to comply with regulatory requirements. However, despite the industry making strides, a significant shortage of supply-side incentives threatens to delay progress.
While the number of retrofit-capable yards has increased to around 16 shipyards, mainly in China and the Middle East, retrofit capacity is currently at approximately 465 vessel conversions annually, well below the projected peak requirement of more than 1,000 conversions per year, according to the report.
LNG retrofits
- Back in the spotlight: owners turning to LNG retrofits for immediate CO₂ reductions and regulatory compliance.
- Supply-side incentives lag behind demand, threatening to slow adoption.
- 16 retrofit-capable shipyards now active (mainly China & Middle East).
- Current retrofit capacity: ~465 vessels/year vs >1,000 needed to meet peak demand.
Hull optimization & energy-saving devices (ESDs)
- Rising in importance: 28.5% of vessels on order now install at least one ESD.
- High-efficiency propellers: 3–10% fuel savings.
- Rudder bulbs: ~3.5% fuel savings.
Wind-assisted propulsion (WAPs)
- Adoption growing, led by bulk carriers and tankers.
- Fuel savings routinely 5–15%, sometimes up to 30%.
- Direct impact: savings translate into competitive advantage amid rising EU ETS costs and tighter GHG targets.
Market and policy dynamics
The success of the energy transition depends on more than just technology. LR’s Maritime Decarbonisation Hub, in partnership with Environmental Defense Fund (EDF), published research highlighting the trillion-plus dollar financing gap that risks the sector’s transition away from fossil fuels.
Workforce capability continues to be a critical issue to address. Alternative fuels such as methanol, ammonia and hydrogen demand new operational competencies, risk management frameworks and safety protocols.
Regulation pushing for action
The regulatory landscape has sharpened, with the IMO’s revised GHG strategy now set out in full, and the entry into force of FuelEU Maritime and the expanded EU ETS. The Mediterranean’s new Sulphur Oxides Emission Control Area and the Canadian Arctic’s phased-in NOx and SOx controls have added to the urgency.
| Read More: Lloyd's Register Analyzes the Potential of Nuclear Propulsion for Yachts in Latest Report |
Where 2025 leaves the industry: Key observations
According to LR’s Global Maritime Trends Barometer, while newbuild orders and retrofit readiness have improved, energy transition scores ranged from just 24% to 30% alignment with 2030 decarbonization targets.
Energy production systems are still predominantly fossil fuel-centric, and significant underinvestment persists in workforce development and port infrastructure. Progress is tangible and accelerating, but not yet enough to meet climate goals.
Looking forward to 2026 and beyond, the alternative fuels landscape is more diverse than ever, and its complexity continues to deepen.
No single solution has emerged as the definitive answer, and each option presents its own set of unique challenges and dependencies.
Success will belong to those who move swiftly, embrace a broad portfolio of strategies, and remain sharply attuned to the evolving realities of regulation, supply chains and technological change.
"The future will be shaped by those who not only adapt, but also offer leadership, helping to build a resilient, sustainable and transformative maritime industry"
… LR concludes.
