Shipping fuel transition: GCMD and BCG model shows engine choices lock in capacity, but fuel economics and carbon pricing decide what ships actually burn through 2050
indiashippingnews.comNew GCMD and BCG modeling lays out why shipping's fuel transition is not just about ordering dual-fuel vessels. Engines last 25 to 30 years, so today's newbuild decisions lock in capacity, but fuel economics decide what those engines actually burn. In the base case, methanol dual-fuel engines reach around 10% of fleet capacity by 2050 while methanol only supplies 2% of fleet energy, because conventional fuel stays cheaper. Stronger carbon pricing changes the picture. If the IMO Tier-2 penalty rises to USD 700 per tonne of CO2e by 2050, new fuels including drop-ins reach about 61% of fleet energy consumption. The model also finds e-methanol and e-ammonia land near parity once logistics costs are included, and that hydrogen cost is a major sensitivity. At USD 2/kg H2, methanol and ammonia together could cover 36% of fleet energy demand, versus 4% at USD 3/kg H2. Ports and bunkering hubs will split by fuel type. Methanol and ethanol can work through existing hubs, while ammonia's handling costs may push it toward production-linked or import-aggregation hubs. The report is useful for anyone tracking maritime decarbonization, because it identifies the policy and cost variables that actually move consumption.