Uncertainty around green fuel availability has capped newbuild orders – SSY

Lack of clarity on which green fuels will become widely available in the future has forced some shipowners to hold back on newbuild orders, UK-based shipbroking firm Simpson Spence Young (SSY) said in its 2023 outlook report.

PHOTO: Bulk carrier pulled by two tugboats. Getty Images

The report points out that the high cost to build a new vessel capable of running on green fuels and limited building capacity in shipyards has also contributed to the slowdown in newbuild orders.

The report further states that the recent introduction of IMO’s certification requirement for Energy Efficiency of Existing Ships (EEXI) and Carbon Intensity Indicator (CII) will likely make less efficient and older chemical tankers irrelevant to the market. Because most of the current fleet is older chemical tankers, SSY warned that this could result in a shortage of tonnage supply.

It also highlights that the EU ban on Russian oil could hurt oil tanker markets. The sanctions prevent EU tankers from transporting Russian oil, a market in which they have historically operated.

By Nithin Chandran

Please get in touch with comments or additional info to news@engine.online