Why flexibility needs to be part of every shipowner’s strategy

“Everyone wants the question answered, ‘What is the fuel of the future?’” said Caterpillar Marine product director, Will Watson. “We currently don’t know what that is. But we’ve been working on pathways, roadmaps, and drop-in fuels for diesel that can work with today’s technology,” he said, adding that Caterpillar is “also investing in new technology for the future.”

Mr Watson spoke to us on the sidelines at the International Tug & Salvage Convention 2026, following his participation in a panel, “Fuel transition and investment timing: From strategy to commitment”. During the panel, tug operators, ship designers, shipbuilders, and propulsion specialists examined alternative-fuel investments, capex, and the technical, operational, and safety considerations for hybrid and battery propulsion.

“There are additional capex costs along with these new technologies”

With global responsibility for everything that Caterpillar offers to the marine market, Mr Watson discussed the development of methanol dual-fuel engines and battery technology. He said in combination with the fuels of the future, “there is also the introduction of the battery into the whole system, too. That provides an opportunity for hybridisation.”

For the last several years, Caterpillar has collaborated with vessel operators testing drop-in fuels like hydrotreated vegetable oil (HVO) – also known as renewable diesel – that can work with its existing four-stroke, Diesel-cycle engine technology. It published marine usage guidelines for HVO and fatty acid methyl ester (also called FAME or biodiesel) in 2021.

Caterpillar and Svitzer collaborated, using 100% biofuels in Cat 3515C main engines and C4.4 auxiliary engines in the tug operator’s fleet, monitoring fuel quality, fuel cleanliness, load response, and overall engine health. Svitzer has experienced operational success using FAME and HVO in the European towage markets and has built a product, EcoTow, for its clients to lower the carbon intensity of their operations. Biofuels are drop-in ready, require no changes to the engines and cut lifecycle emissions meaningfully. Svitzer has committed to being carbon neutral by 2040.

When making decisions on a new tug, Mr Watson said owners should consider what they are trying to achieve. “There are additional capex costs along with these new technologies. So, you have to balance the benefits with the additional capex costs and the tradeoffs.” With the uncertainty around fuels, Mr Watson emphasised “flexibility will be key” for operators.

And Caterpillar intends to enable flexibility through its R&D. Later this year, Caterpillar expects to have its first marine battery system on the water, and it is conducting research on methanol engines at the US Department of Energy’s Oak Ridge National Laboratory (ORNL), Oak Ridge, Tennessee. The engine maker has been collaborating with ORNL on developing a dual-fuel combustion strategy for its marine engines. The approach pairs methanol with a small amount of diesel used as a pilot fuel to start combustion, enabling methanol dual-fuel operation across a much wider range of conditions.