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A Record-Breaking Orderbook: Is Sustainability Playing a Role?



After recent record-breaking profits for ocean carriers, it may come as no surprise that a record-breaking container-ship orderbook followed close behind.


In a Freightwaves article published last month, writer Greg Miller cites data provided by Alphaliner shipping analyst Stefan Verberckmoes: “The majority of tonnage on order will be delivered the next two years: 2.34 million TEUs in 2023 and 2.83 million TEUs in 2024, compared to around 1.1 million TEUs in both 2021 and 2022…”


Miller refers to such numbers as “unprecedented.”


Although he discusses various dynamics and strategies carriers may adopt to deal with what may end up being a glut of supply amidst the potential for reduced demand, Miller includes another detail—one which may be playing a role in the record-breaking orderbook: “New orders favor dual-fuel tonnage that can burn both traditional marine bunker fuel as well as liquefied natural gas or methanol.”


A quick look at three TradeWinds headlines over the past three years demonstrate a growing trend toward alternative fuels in newbuilds:


There are a variety of initiatives and new regulations fueling this more-sustainable-shipping trend. Here, we’ll cover three of them.



IMO 2020


One factor playing a role in these dynamics—as noted in our post, “What Freight Technologies Are Pushing For Sustainability?”—is IMO 2020. These new sulfur regulations implemented by the International Maritime Organization (IMO) went into effect January 1, 2020.


According to a press release, “From 1 January 2020 the global upper limit on the sulphur content of ships' fuel oil will be reduced to 0.50% (from 3.50%). Known as ‘IMO 2020’, the reduced limit is mandatory for all ships operating outside certain designated Emission Control Areas*, where the limit is already 0.10%.”


Options for compliance were also described:

  • “To supply compliant fuel oil, refineries may blend fuel oils with a higher and lower sulphur content. Additives may be used to enhance other properties, such as lubricity. Ships may also use different fuels, with low or even zero sulphur - for example, liquefied natural gas, or biofuels. However, mixture and co-mingling of different fuels are not recommended on board the ship . Shipowners should refer to the relevant International Standardization Organization (ISO) standards (ISO 8217 and ISO/PAS 23263:2019). Shipowners should test compatibility, stability and other relevant characters of compliant fuels to be used.”

  • “Limiting air pollutants by installing exhaust gas cleaning systems, also known as ‘scrubbers’, is accepted if flag States approve as an alternative means to meet the sulphur limit requirement. Scrubbers remove sulphur oxides from the ship's engine and boiler exhaust gases, enabling ships fitted with them to continue to use heavy fuel oil, in accordance with IMO Guidelines.”



Getting to Zero Coalition


Another effort related to sustainability is being driven by the Getting to Zero Coalition, which is described as “a partnership between the Global Maritime Forum and the World Economic Forum. It brings together decision-makers from across the shipping value chain with key stakeholders from the energy sector as well as from governments and IGOs. The work is supported by knowledge partners such as UCL Energy Institute, Environmental Defense Fund and the Energy Transitions Commission.”


“The Getting to Zero Coalition is a powerful alliance of more than 200 organizations (including 160 companies) within the maritime, energy, infrastructure and finance sectors, supported by key governments and IGOs,” the Global Maritime Forum says. “The Coalition is committed to getting commercially viable deep sea zero emission vessels powered by zero emission fuels into operation by 2030 towards full decarbonization by 2050 – maritime shipping’s moon-shot ambition.”




Source: YouTube


In May, the Global Maritime Forum published a summary of a series of webinars hosted by the workstream on Fuels & Technologies, to “unpack the different fuels and technologies options that could support the transition to zero emission fuels.”


Key takeaways from the webinar:

  • “Retrofitting offers the possibility to remain flexible on the transition pathway. Indeed, it is an opportunity to tailor the vessels to meet global standards and adapt to fuels availability.”

  • “The decision of retrofitting can emerge from identifying and analysing the cost benefit of retrofitting existing vessels or acquiring new fleet. Planning is the key to success for retrofitting as 12 to 14 months are needed upstream to prepare the vessel to be retrofitted.”

  • “To accelerate the retrofitting process, panellists concluded there is a need to develop a common view on what retrofitting is and engage stakeholders along the value chain.”

A downloadable version of the full insight article is available here.


Retrofitting was also a focus of the 30th SMM international maritime trade fair, held in Hamburg in early September.



EEXI and CII


But making the most immediate impact are the IMO’s new regulations which entered into force on November 1st. An IMO press release provides the details:

  • “Amendments to the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI enter into force on 1 November 2022. Developed under the framework of the Initial IMO Strategy on Reduction of GHG Emissions from Ships agreed in 2018, these technical and operational amendments require ships to improve their energy efficiency in the short term and thereby reduce their greenhouse gas emissions.”

  • “From 1 January 2023 it will be mandatory for all ships to calculate their attained Energy Efficiency Existing Ship Index (EEXI) to measure their energy efficiency and to initiate the collection of data for the reporting of their annual operational carbon intensity indicator (CII) and CII rating.”


Quoted in the release, IMO Secretary-General Kitack Lim said: "The short-term GHG reduction measures, adopted in 2021, form a comprehensive set of amendments to MARPOL Annex VI, which provide important building blocks for IMO's future mid-term greenhouse gas reduction measures."


"Decarbonizing international shipping is a priority issue for IMO and we are all committed to acting together in revising our strategy and enhancing our ambition," Mr. Lim said. "These latest amendments build on IMO energy-efficiency measures which were first adopted in 2011 and strengthened since - the CII and EEXI measures represent the next stage in our work to meet the targets set in the Initial IMO GHG Strategy."


"IMO Member States are currently actively engaged in the process of revising the Initial IMO Strategy on Reduction of GHG Emissions from Ships with a view to adoption of a revised Strategy in mid-2023. Member States are also engaged in developing a basket of candidate mid-term measures, including technical and economic elements, that will set global shipping on an ambitious path to phasing out GHG emissions towards the middle of this century. We are, in tandem, working to support Member States in their implementation of measures and to ensure that no one is left behind in this transition towards a decarbonized future for shipping" Mr. Lim said.


The amendments to MARPOL Annex VI are in force from 1 November 2022. The requirements for EEXI and CII certification come into effect on 1 January 2023. This means that the first annual reporting will be completed in 2023, with initial CII ratings given in 2024.

The IMO also provides answers to frequently asked questions about the CII and EEXI measures.


Another resource for navigating the regulations is a new guide created by the International Chamber of Shipping (ICS).




A November 22 press release provides the details:

  • “The International Chamber of Shipping (ICS) has published the industry’s first definitive guide to the IMO GHG regulations, helping decision makers to chart their way through the major technical and operational changes they face in achieving the CO2 reduction targets for 2030 agreed by the UN International Maritime Organization (IMO).”

  • Reducing Greenhouse Gas Emissions: A Guide to IMO Regulatory Compliance guides readers through the first step on the route to decarbonisation: preparing for compliance with the IMO regulatory framework, and in particular, the 2021 amendments to MARPOL Annex VI. It is the first of what will be a developing portfolio of guidance and support for the industry.”


In the statement, Guy Platten, Secretary General of the International Chamber of Shipping said, “The number one priority facing owners and operators is reducing emissions, while maintaining safe and efficient operations. It is essential that decision makers have access to the best expert advice possible on the implications of new legislation. Unlike much that can be found on this topic, the information provided in the ICS Guide highlights and emphasises how these changes will directly affect shipping, and the decisions that owners and operators must make today.”


Reducing Greenhouse Gas Emissions: A Guide to IMO Regulatory Compliance covers:

  • “Reductions of carbon intensity through the use of the Energy Efficiency Design Index for new ships (EEDI) and the Energy Efficiency Existing Ship Index (EEXI)

  • Submission of the Ship Energy Efficiency Management Plans (SEEMP) for external audit and statutory certification; and

  • Use of operational Carbon Intensity Indicators (CIIs) and the collection and submission of operational data, with ships being designated annually with an ‘A to E’ rating.

  • Modification of existing ships, including information for naval architects.”


Reducing Greenhouse Gas Emissions: A Guide to IMO Regulatory Compliance is priced at £150 and can be found in the ICS bookshop.



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