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  • Writer's pictureNikos Doukas

Vassilios Kroustallis: Availability and scalability will determine the fuel of the future


Vassilios Kroustallis, ABS Senior Vice President, Global Business Development
Vassilios Kroustallis, ABS Senior Vice President, Global Business Development

Constant, systemic change will continue to be the business-as-usual scenario in 2024, but for all the excitement around technology solutions to decarbonization challenges, it is the logistics of alternative fuel production and supply that will reshape the business of shipping beyond recognition.


While we anticipate that fossil fuel demand will be stronger for longer, the long-term trend remains the same. The uptake of LNG, methanol and LPG continues apace. The shift in newbuilding from conventional vessels to those capable of alternative fuel operations is almost complete in some sectors – with containers, car carrier and bulkers leading the way.

Investment in some areas, particularly methanol engines, is so rapid that the question has shifted to the availability of fuels rather than engine technology – and the ability of alternative fuel providers to deliver green product at affordable prices. The green transition, in shipping at least, is increasingly about the effective application of technology rather than the need for its development.


Methanol as a fuel clearly has a head start over ammonia and blue/green production is coming, but maybe not fast enough. The availability of methanol, or lack thereof, is either a critical success factor or brake on its adoption every bit as important as pricing.

Biofuels are also a rapidly accelerating option. Due to the technical simplicity and low capital cost of biofuels which are compatible for blending with current fuels, they have an immediate contribution to make to the energy transition.


While the IMO develops standards for crediting their use, ABS is already today working with leading shipping lines and innovative flag states to pilot their use as a short-term drop-in solution to reduce carbon intensity.

Added to bunker fuel at a ratio of around 30%, they can transform a vessel’s CII rating from a failing grade of E to an A grade overnight. The potential is exciting but here again production and availability are significant constraints on realizing that. For that transformation, all the indicators are that we need instead to look at methanol, ammonia and hydrogen.


It is worth bearing in mind that if all ships built in this decade are built as dual-fueled, we will inevitably see significantly lower rates of oil use by 2050.

Take bulk carriers for example, our latest research indicates that by 2050 oil-based fuels will account for less than 7% of the fuel mix. Ammonia, hydrogen and methanol are expected to account for the lion’s share. The same is true for tankers, where oil-based fuels will account for 10%. In container shipping, research suggests the level will be below 25%.

Overall, our fuel mix forecast anticipates that by 2050, methanol could account for as much as 40% of the mix, with ammonia around 20%, LNG roughly consistent with today, 5% LPG and oil-based fuels under 20%.


The key constraint going forward is availability of supply, particularly of green variants, and the shortfall today between projected demand and projected supply is huge. The possibility that many methanol vessels in particular will be burning oil for some time to come is real.

This need for fuel flexibility is the dominant trend for the foreseeable future, as operators look to hedge against geo-politically driven price volatility and patchy global bunkering arrangements.


Currently dual fuel tonnage represents 23% of the vessels currently on order or about half (49%) by gross tonnage. Dual fuel-ready represents a further 7% of the vessels currently on order or 12% by gross tonnage. That will increase as the available fuel mix widens in the coming year, with methanol retrofit trials beginning in earnest and ammonia engines finally becoming available in early 2024.


As the industry is impacted by powerful geopolitical and macro-economic forces, some things are clear. Whatever the potential of alternative fuels, the true benchmark for success will remain safety. This is our guiding light, and this will never change.

It is also clear that it will be fuel availability and scalability - rather than technology - that will be the decisive factor in the maritime energy transition. What is also emerging is the confidence that, although a truly decarbonized industry may seem a long way off from the standpoint of today, our trajectory is good.


We are working together, investing, adapting and laying the foundations for an entirely new, more sustainable model for shipping. Staying on track puts a net zero shipping industry within our grasp by 2050.

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