Owners ‘pump the brakes’ on methanol-, ammonia- and hydrogen-capable vessels

Investment in ships capable of operating on methanol, ammonia, and hydrogen dried up during the first half of the year, with no new shipbuilding contracts announced in June. Shipowners ordered 15 alternative-fuelled vessels during the month: 10 LNG dual-fuel propulsion vessels (not including LNG carriers) and five LPG dual-fuel vessels.

During H1 2026, four methanol/ethanol-powered ships, four ammonia-capable vessels and one hydrogen-fuelled newbuild were ordered.

Meanwhile, shipbuilding deals were struck for 73 LNG-capable vessels and 55 LPG-powered ships in the same period, accounting for 94% of the 134 alternative-fuelled newbuildings, according to data from DNV’s Alternative Fuel Insights (AFI) platform.

Limited fuel availability, high prices for clean fuels biomethanol and e-methanol and the failure to adopt IMO’s previously agreed Net-Zero Framework (NZF) in October 2025 have made owners pump the brakes on near-term investments in alternative-fuelled tonnage.

One of those is Pacific Basin Shipping, which axed previous commitments to build four 64,000-dwt methanol dual-fuel Ultramax newbuildings in favour of conventionally powered tonnage.

At the time of the announcement in April, Pacific Basin chief executive Martin Fruergaard said the move “reduces unnecessary near-term capital expenditure and is a financially prudent response to renewed uncertainty around the timing and final shape of a global regulatory framework.”

One of the world’s leading dry bulk shipping companies, Pacific Basin, signed new agreements with Japanese shipbuilders Nihon Shipyard and Mitsui & Co for four conventionally fuelled 64,000-dwt Ultramax newbuildings of the “latest fuel-efficient design” at an aggregate cost of US$156.8M for delivery between 2028 and mid-2029.

But the Hong Kong-listed shipowner has not given up on methanol; the same agreement struck with Mitsui & Co contains an owner option exercisable by February 2027 to acquire two 64,000-dwt methanol dual-fuel Ultramaxes for delivery between April 2030 and March 2031.

“While we expect an NZF-type global mechanism to be adopted in some form in due course and we remain committed to our decarbonisation journey, we believe it is in our shareholders’ best interests to avoid near-term investment in higher‑cost dual-fuel vessels until clearer regulatory support emerges,” said Mr Fruergaard.