Cleaner fuels gain ground in shipping, but Cyprus sees the limits
Global shipping is making visible progress in adopting cleaner fuels, but the pace of change remains well short of what is needed to meet looming environmental targets, according to new analysis by British classification society Lloyd’s Register (LR), based on Clarkson’s data for 2025.
While overall newbuilding orders eased compared with 2024, demand for vessels capable of operating on alternative fuels stayed resilient.
In 2025 alone, 590 such ships were ordered, lifting the total order book to 1,942 vessels, LR said, pointing to a fuel landscape that is diversifying but still heavily weighted towards LNG.
Most of these ships are LNG-capable, reflecting the fuel’s role as the industry’s most readily available transition option, while orders for methanol- and LPG-fuelled vessels followed and hydrogen and ammonia remained marginal.
Even so, LR notes that alternative-fuel vessels still account for just 2.1 per cent of the global fleet and orderbook, a modest share given the International Maritime Organisation’s (IMO) emissions-cutting pathway.
Attention is increasingly turning to the existing fleet, where conversions can deliver faster emissions reductions than waiting for new tonnage alone.
LNG retrofits, in particular, are gaining momentum as shipowners pursue near-term compliance, not least as regional rules tighten in parallel with global targets.
In the EU, the pressure is rising through instruments such as FuelEU Maritime and the inclusion of shipping in the bloc’s carbon market via the EU Emissions Trading System, which together are sharpening investment decisions and raising the cost of delay.
However, capacity constraints threaten to slow that retrofit momentum. LR warns that global shipyard capacity can currently accommodate around 465 retrofits per year, while projected needs exceed 1,000 vessels annually, a mismatch that risks delays, cost inflation and fiercer competition for yard slots, at precisely the moment owners are racing to secure compliance pathways.
Beyond technology and infrastructure, financing remains a critical obstacle.
Joint work led by the Environmental Defense Fund and LR’s decarbonisation partners has warned of a trillion-plus dollar financing gap for shipping’s energy transition, with capital needed not only for new fuels and vessels but also for port infrastructure and retrofits.
Human capital presents a parallel challenge. New fuels bring heightened safety requirements and operational complexity, yet investment in crew training, certification and specialised skills is lagging, a gap that becomes more acute as rules tighten and new technologies move from trials into day-to-day operations.
Taken together, these constraints are slowing overall progress. LR’s own Global Maritime Trends Barometer suggests the sector is only 24 to 30 per cent aligned with its 2030 decarbonisation pathway.
The trajectory, LR argues, is no longer in doubt, but the speed is.
Without faster investment, expanded infrastructure, scalable financing solutions and a sharper focus on workforce readiness, shipping risks falling behind schedule.
The transition is unlikely to be driven by a single fuel; instead, leadership will come from those able to move quickly, deploy multiple strategies and adapt to an evolving regulatory and technological landscape.
These global constraints resonate strongly in Cyprus, one of Europe’s key maritime hubs, where decarbonisation is increasingly framed as both a competitiveness issue and a strategic test for the wider shipping cluster.
That link was emphasised during Maritime Cyprus 2025 in Limassol, where the island again positioned itself as a convening point for shipowners, regulators and international organisations at a time when global rulemaking remains in flux.
In his opening address at the conference, President Nikos Christodoulides set the tone by placing sustainability alongside safety and innovation as core pillars for the sector’s next phase, a message reinforced by Shipping Deputy Minister Marina Hadjimanolis, who stressed that the transition depends not only on fuels and technology but also on coordinated investment and skills.
Cyprus’ shipping community has also pushed for global alignment rather than fragmented regional approaches.
The Cyprus Shipping Chamber’s call for the urgent adoption of an IMO Net-Zero Framework reflects concerns that competing regimes could distort competition in a global industry, even as the EU moves ahead with its own decarbonisation toolkit.
That tension has been sharpened by the fact that the IMO’s anticipated Net-Zero Framework has faced delays, prolonging uncertainty for investors and adding complexity to long-term fuel and fleet strategies, as reported by Reuters.
For Cyprus, the stakes are both strategic and immediate. As global ambitions collide with practical constraints, shipyard capacity, fuel availability, port readiness, training, and access to capital, the island’s role as a maritime centre will increasingly depend on how effectively these global targets translate into workable solutions for owners and operators.
What emerges from both LR’s analysis and the Cyprus-centred debate is a shared conclusion: the transition has begun, but it is not yet moving fast enough.
Bridging the gap between targets and delivery will require accelerated investment, infrastructure that can scale, and a renewed focus on the human dimension of decarbonisation.
In an industry defined by long asset lifecycles and global interdependence, time is no longer a luxury shipping can afford.