Fuel‑Flexibility Gains Momentum in Dry Bulk Newbuildings
For the first time, ethanol‑capable vessels have entered the dry bulk orderbook in significant numbers. Nineteen dual‑fuel ships, able to run on methanol or ethanol, are now slated for construction, signalling a shift in owners’ strategy toward broader fuel options.
Why Shipowners Are Betting on Dual‑Fuel Capability
The move follows a rapid uptake that began in May 2026, after the initial methanol/ethanol‑compatible orders appeared in 2023. Owners are seeking to hedge against volatility in fuel prices, evolving regulatory frameworks, and the still‑uncertain commercial benefits of alternative fuels. The core question remains: will the added flexibility translate into a competitive edge, or will highly efficient conventional vessels continue to dominate charter rates?
Key Market Players and Their Strategies
- Vale’s Ore Carrier Programme: The mining giant’s long‑term contracts have spurred multiple owners to order ethanol‑dual‑fuel carriers, with up to 30 vessels planned for the miner’s fleet.
- Pacific Basin: After initially ordering four methanol‑dual‑fuel Ultramax vessels, the group substituted them with conventional builds, cutting programme costs by $29.2 million. The company retained options for two dual‑fuel ships, citing lingering uncertainty around the IMO Net‑Zero Framework.
- Retrofit Activity: Engine manufacturers now offer conversion packages for existing vessels. Drewry’s maritime advisory head, Jayendu Krishna, notes a rise in methanol retrofits, though high fuel prices and limited supply curb actual fuel consumption.
Market Realities and Transition Pace
Despite the growing orderbook, the gap between vessel capability and fuel utilisation remains wide. IMO data shows that alternative fuels accounted for just 9.5 % of total shipping energy demand in 2025, with methanol representing a mere 0.3 % of that share. Consequently, the construction of dual‑fuel ships alone will not accelerate the energy transition; supportive fuel infrastructure, stable pricing, and clear charterer demand are equally essential.
Outlook for the Dry Bulk Sector
Owners face a strategic trade‑off: invest now in flexible newbuilds that may become valuable as regulations tighten, or focus on maximising efficiency with conventional tonnage. As regulatory guidance crystallises and alternative‑fuel supply chains mature, the commercial advantage of dual‑fuel capability is likely to become clearer, potentially reshaping charter preferences in the dry bulk market.