Environmental and Economic Assessment of Alternative Marine Fuels for Bulk Carriers: A Comparative Analysis of Handymax, Panamax and Supramax Vessels

Abstract

In the present paper, a quantitative assessment of the effect of alternative fuel (LNG, LPG-B, LPG-P and MeOH) implementation in internal combustion engines in bulk carrier vessels on environmental compliance is presented. A fleet comprising 40 vessels across the Handymax, Panamax and Supramax classes is examined. By using LNG, the total fleet achieves environmental compliance up to 2030, with 52.5% of the fleet potentially achieving a minor superior energy ranking, while the EU ETS costs can be reduced by up to 24% compared to the case of burning conventional fuels. LPG-B and LPG-P demonstrated moderate improvements in the compliance period, with 50% to 87.5% and 52.5% to 97.5% surviving up to 2030, respectively. Reductions in the EU ETS costs were similar for these two fuels, with the reductions ranging from 3.3% to 12.1% for LPG-B and from 4.1% to 15.2% for LPG-P. Among all fuels, methanol showed the least improvement in extending the compliance period, with 52.5% to 67.5% of the fleet reaching 2030 with inferior to moderate CII ranks. The EU ETS cost reductions were low, ranging from 2.7% to 10%, with substantial fuel cost increases from 29.9% to 107%. The present study aims to assist ship owners/operators by providing a decision-support tool for bulk carrier alternative fuel pathways. Finally, it provides insights into the marine industry and shipping market regarding the future of the bulk carrier fleet in the context of decarbonization.

1. Introduction

As ongoing stringent environmental regulations push towards decarbonization, ship operators and owners are compelled to seek solutions to improve vessel energy efficiency and reduce fuel consumption and CO₂ emissions. Bulk carriers, vessels that are designed to transport unpackaged dry cargo, have been at the forefront of seaborne trade, representing the majority of the global fleet in terms of carrying capacity. Transporting large volumes of commodities, in 2024, they represented 42.7% of the global fleet, while as of February 2025, 14,180 bulk carriers were engaged in international trade [1].

Decarbonization is guided by the IMO’s Revised GHG Strategy, which has set target checkpoints of at least a 20% (striving for 30%) reduction by 2030 and at least 70% (striving for 80%) by 2040, relative to 2008 levels. The strategy introduces important regulatory elements. The Energy Efficiency Design Index (EEDI) and the Energy Efficiency Existing Ship Index (EEXI) are technical standards for improving the energy performance of ships and reducing greenhouse gas (GHG) emissions. Moreover, the Carbon Intensity Indicator (CII) introduces an operational performance rating (A to E) that is based on the annual CO₂ emissions of the ship relative to its transport work, necessitating continuous improvement.

At the regional level, the European Union emissions trading system (EU ETS), as of 2024, covers CO₂ emissions from maritime transport. It requires shipping companies operating in the EU to monitor emissions and purchase allowances for 50% of the CO₂ emitted on intra-EU voyages and 100% during operations between EU ports. FuelEU, which entered into force in 2025, mandates a gradual reduction in the GHG intensity of onboard energy use, supporting the transition to alternative fuels produced from green and renewable energy.

In the wake of decarbonization, no solution is expected to dominate the market. Within the mixture of technological pathways, alternative fuels are an attractive option for reducing the carbon footprint. Zero-carbon fuels (hydrogen and ammonia) guarantee compliance and are foreseen to power the fleet in the long term, as they are currently hindered by technological, economic and infrastructure challenges. Thus, the use of alternative, low-carbon-content fuels is favored, and these fuels could serve as near-term transitional fuels. They include liquified natural gas, methanol (MeOH) and liquified petroleum gas (LPG).

According to data published by DNV [2], as of February 2025, 642 vessels are powered by LNG, with an additional 264 vessels having been ordered in 2024. Among these, 57 are bulk carriers, with 16 more on order [3]. The LNG-fueled fleet is anticipated to continue its steady expansion in the coming years, necessitating the development of robust and globally accessible bunkering infrastructure. In addition, 64 LNG bunkering vessels are presently in operation, with their capacities ranging from 1000 to 20,000 m³, while 16 additional vessels are anticipated in 2028 [2]. As of 2024, 191 ports worldwide are equipped with operational LNG infrastructure, with 81 facilities being under construction.

The implementation of LNG has been examined from economic, safety and feasibility perspectives. In [4], Usiagu et al. conducted a review on the future role of LNG in decarbonization. Their analysis of LNG characteristics, environmental considerations, carbon reduction goals, policy factors, economic drivers, global production capacity and regional dynamics and geopolitical implications supports the view that LNG could serve as a transitional fuel towards future power generation from renewable energy sources. In [5], Schinas and Butler proposed a methodology for assessing the commercial viability of LNG as a marine fuel, including necessary incentives for its adoption. By analyzing contemporary regulations, fuel price statistics and industry data, they developed an economic model to compare fuel alternatives in terms of capital expenditure (CAPEX) and operational expenditure (OPEX). Their findings indicated that LNG-fueled vessels could reduce daily fuel costs by 20% to 30%, despite an increase in CAPEX ranging from 15% to 30%. In the absence of financial incentives for shipowners, retrofitting is primarily feasible for vessels operating in Emission Control Areas (ECAs) or on fixed routes. In [6], Wan et al. developed a model to evaluate LNG adoption across single or multiple regions. Combining quantitative and qualitative metrics, the model serves both as a policy development tool and as an adaptable framework for assessing emerging technologies in other economic sectors. Tam et al. [7] conducted a study on retrofitting a mini-Cape bulk carrier for dual-fuel LNG operation, focusing on cost efficiency and downtime reduction. The research identified significant challenges, with tank volume and placement being the primary constraints. It is further estimated that retrofit costs may exceed those of a conventional newbuilding by USD 8–10 million. Downtime was influenced by the yard’s location, project duration, flag state requirements, classification society rules and the modularity of the LNG fuel system.

The impact of LNG within the European Union emissions trading system (EU ETS) was examined by He et al. [8]. Through a comparative analysis between estimated emission factors and data collected from an operational LNG engine, for an annual consumption of 2000 tons of fuel, a reduction in European Union Allowance (EUA) costs between USD 10,000 and 20,000 per vessel could be achieved. The authors emphasized the variability of emission factors under differing operational conditions and proposed the integration of methane emission coefficients into regulatory frameworks. Methane slip emissions were further studied by Psaraftis et al. [9], where the authors estimated a 174% rise in methane emissions between 2012 and 2018, which was attributed to a 30% increase in LNG use in marine engines.

LNG significantly enhances vessel energy efficiency. In [10], El-Manzalawy et al. demonstrated improvements to the Energy Efficiency Design Index (EEDI) of a containership using a dual-fuel LNG engine. Ejder [11] assessed LNG’s potential in marine decarbonization by calculating the Carbon Intensity Indicator (CII) of a bulk carrier over eleven voyages spanning three years. The analysis covered navigation, port operations, power consumption and fuel usage, with the CII evaluated per voyage and annually. The results indicated that LNG could extend a vessel’s lifespan by six years relative to conventional fuels. However, LNG alone remains insufficient to meet the IMO 2050 decarbonization targets, rendering it a viable short- to medium-term solution.

Environmental performance associated with LNG can be enhanced through the implementation of carbon capture systems. Carbon capture offers significant short-term improvements in a vessel’s carbon footprint when compared with alternative fuels and fuel-saving technologies, contributing both technologically and competitively. Ros et al. [12] demonstrated that combining LNG with carbon capture can increase capture efficiency by utilizing LNG’s cold energy to liquefy the CO₂ stream before combustion, constrained nevertheless, by the installed liquefaction capacity. In a parallel approach, Xia et al. [13] developed a thermodynamic model to reduce carbon emissions and enhance energy efficiency on a Newcastlemax bulk carrier. The proposed system integrates air separation, cold energy recovery, waste heat utilization and carbon capture. The results indicated a CO₂ capture rate surpassing the vessel’s CO₂ production, due to oxygen-enriched combustion enabled by the air separation unit.

Methanol is considered a compelling alternative fuel option for future marine propulsion due to the ease of storage. As of March 2025, Clarkson data indicate that 54 vessels are equipped for methanol combustion, while 304 additional ships are under construction [14]. Furthermore, 121 existing vessels are suitable for retrofitting, and 586 methanol-ready newbuilds have been ordered. The global bunkering infrastructure remains nascent; according to the Methanol Institute, only ten operational bunkering sites exist worldwide. Nonetheless, several major ports are making strides in infrastructure development [15].

Despite methanol’s promising outlook, comprehensive studies on vessel efficiency and performance under methanol combustion remain limited. This underscores the need for further ship design advancements to enable broader commercial adoption. In [16], Rachow utilized IMO draft reports and classification society guidelines to outline a safe design for methanol fuel systems in small tankers. In [17], Ammar conducted an economic–environmental analysis for a methanol-fueled containership, concluding that CO₂ emissions could be reduced by 18%, while reducing a vessel’s speed could improve the economics of dual-fuel operation. In their corresponding works, Adami et al. [18,19] addressed the technical challenges of retrofitting Handymax and Panamax bulk carriers for dual-fuel methanol operation, highlighting the need for increased fuel storage. This necessitates trade-offs such as reduced endurance, frequent bunkering or a reduction in payload. Transporting cargo on medium-sized vessels results in a lower carbon footprint than smaller vessels, particularly when utilizing green or bio-methanol. Khaled et al. [20] evaluated MeOH–MDO dual-fuel use aboard cruise vessels, reporting emission reductions of CO₂ (25.7%), NO_x (38.46%), SO_x (45%), and PM (45%). Their analysis projected an annual savings of USD 17.5 million.

Despite LNG and MeOH offering reductions in carbon intensity, they alone cannot achieve the 2050 decarbonization targets. In research works, along with other energy technologies, they are considered as transitional fuels, supporting the gradual shift towards zero-carbon solutions. To highlight the importance of alternative fuels on decarbonization, Ampah et al. [21] retrieved and combined information from a plethora of documents on available databases. By analyzing the documents with R-studio, they identified LNG as the most researched alternative fuel, and confirmed increasing interest in methanol, ammonia and hydrogen. In [22], Ashrafi et al. highlighted the challenges associated with LNG, NH₃ and H₂ depending on the cost, infrastructure, availability and technological readiness.

Yan et al. [23] analyzed alternative fuel usage aboard a small bulk carrier in the Yangtze River. They concluded that green ammonia and green hydrogen hold the greatest decarbonization potential, exhibiting reductions of 78.8% and 91.3% respectively, while LNG and MeOH achieved 31.5% to 38% lower life cycle carbon emissions compared to diesel. In [24], Percic et al. conducted an analysis of the decarbonization pathways for short-sea Croatian passenger vessels, concluding that electrification is the optimum solution both in environmental and economical terms. The authors extended their work [25] by performing technical, environmental and economic analyses of alternative fuels on the Croatian inland fleet. By considering the ship operational profile and technical characteristics, the authors concluded that electrification is the optimum solution for passenger vessels, while methanol-powered systems, although hindered by the immature infrastructure, are the most cost-efficient solution for cargo ships. Zhao Yangfang. et al. [26] investigated the impact of alternative fuel transition on fuel costs, carbon emissions and retrofit costs. They claimed that bio-methanol and e-ammonia are expected to exhibit the lowest operational costs in the upcoming years, despite the fact that current investment in new ships remains low. The authors concluded that although no fuel stands out as a dominant future solution, only LNG and bio-diesel are favored due to their current infrastructure and small price fluctuations. Balcombe et al. [27] confirmed that LNG could serve as an intermediate solution towards decarbonization since it offers a moderate 10% reduction in GHG (affected by methane slip) and minor policy interventions.

Zhao et al. [28] proposed a power system and fuel optimization model for bulk carrier fleet decarbonization, identifying bio-LNG and MeOH as transitional fuels. Cumulative efficiency improvements can be achieved by reducing ballast water on new-built vessels, and by using solar panels and cold ironing on retrofitted vessels. In a similar approach [29], Xing et al., and Wang et al. [30], in their respective works, reaffirmed the transitional role of LNG, LPG and MeOH as having a significant environmental impact when the fuels are produced by green procedures, stressing the importance of fuel volume efficiency and storage. Loennechen et al. [31] developed a two-stage stochastic model for the Supramax fleet, identifying MeOH, LNG and e-ammonia as favorable options under renewable production scenarios. Taking into account vessel energy requirements, combining alternative fuels with wind power or carbon capture could further enhance compliance. Akman et al. [32], in a work proposed for bulk carrier preliminary design, confirmed the positive impact of LNG and MeOH on the EEDI of a vessel. On the conceptual design of a Handymax 35,000 t bulk carrier using alternative fuels, both fuels reduced the EEDI, with LNG exhibiting reduced values by 17.1% and 13.6% from diesel oil and MeOH, respectively. However, due to methane slip, GHG emissions were increased by 20%. Cost-effective options for a reduction in GHG emissions for a Supramax bulk carrier were investigated by Lagemann et al. [33]. The authors, by considering retrofit costs for each alternative fuel option and a tax penalty, concluded that LNG could offer significant reductions in GHG, with NH₃ produced from renewable electricity being the optimal solution for the vessel. Ahad Al-Enazi [34] et al., in an effort to address GHG holistically, developed a linear programming model to evaluate the optimal fuel option for LNG carriers, concluding that NH₃ and H₂/LNG blends are the most favored solutions. Al-Asmakh et al. [35] studied ship modifications for various fuels and concluded that LNG and H₂ offer strong environmental benefits. However, widespread adoption of H₂ is hindered by safety concerns, high costs and undeveloped infrastructure. In [36], Horvath et al. sought the most cost-effective combination of synthetic fuels for use in either ICEs or fuel cells. By comparing five that were synthetically produced and applied to both short-sea and deep-sea going vessels, they concluded that the most promising solution was the use of liquid H₂ in PEM fuel cells. Park et al. [37] assessed the decarbonization potential of alternative fuels and technologies for offshore supply vessels. LNG, with its well-developed infrastructure and a GHG reduction potential of 20%, along with hybrid propulsion systems, can serve as temporary solutions. Upon tackling significant challenges, H₂ and NH₃ can provide carbon elimination in the long term. Li et al. [38] reviewed fuel technologies and challenges, citing LNG slip, MeOH/H₂ storage difficulties and ammonia slip as key obstacles, highlighting the need for regulatory alignment and the importance of life cycle assessments for each technological solution. They advocate for optimization through the use of combustion control systems, thermal management optimization and multi-objective algorithms. LNG, combined with wind power, would be the most prominent short-term measure. Green ammonia, methanol and hydrogen are expected to become the dominant solutions in the long term upon the conduct of further research.

While abundant previous studies have examined alternative fuels from LCA and techno-economic views, a comprehensive comparative analysis of LNG, LPG variants and methanol across different bulk carrier classes under current regulatory frameworks remains limited. This study aims to determine which of these fuels can provide a suitable environmental compliance solution for the bulk carrier fleet.

The novelty of this work lies in evaluating the impact of alternative fuels (LNG, LPG-B, LPG-P and MeOH) on environmental compliance at the scale of an actual bulk carrier fleet rather than relying on a single custom ship as a case study. Moreover, the analysis is based on real consumption data from the fleet under consideration, providing a more accurate representation of the practical implications of adopting the selected fuels. This approach offers valuable insights into the suitability of different fuel pathways for bulk carriers, enabling shipowners and operators to use the findings as a decision-making tool when selecting retrofit options and compliance strategies for their fleets. Furthermore, the outcomes of this study can inform policymakers and stakeholders in shaping investment priorities and regulatory measures that effectively support the decarbonization of a bulk carrier fleet.

2. Methodology

In this work, for a fleet sample of 40 bulk carriers, the cases of LNG, LPG-B, LPG-P and MeOH are considered for use in internal combustion engines (ICEs). For each fuel, three application scenarios are examined as follows: alternative fuels only in auxiliary engines, alternative fuels only in the main engine, and alternative fuels in both main and auxiliary engines. These fuels were selected because such engines have been commercially available, rendering these fuels straightforward options. The combustion of the four selected fuels in the main engine and/or auxiliary engines is done because these engines are the ship’s primary energy converters and fuel consumers. The main engine is a two-stroke marine diesel engine that is used for propulsion, while the auxiliary engines (A/Es) are four-stroke marine diesel engines that are used for electricity generation. The fleet sample used in this work, shown in

Table 1. Fleet sample description.

Ship Type	Deadweight Range [t]	Year of Build Range	Average Speed Range [Knots]
Handymax	31,833–40,000	2009–2015	11–12
Panamax	40,000–82,000	2006–2020	9–14
Supramax	50,000–61,644	2006–2020	9–14

, consists of four Handymax bulk carriers with a year of build (YOB) between 2009 and 2015, and 36 Panamax and Supramax vessels with a YOB ranging between 2006 and 2020. For each vessel, the deadweight (DWT), annual distance, heavy fuel oil (HFO), low sulfur fuel oil (LFO) and marine gas oil (MGO) annual consumption were available. The DWT ranged from 31,833 t to 61,644 t. All vessels are equipped with a marine two-stroke diesel engine for propulsion (main engine) and three four-stroke diesel engines used for electricity generation (auxiliary engines). The fleet consumed 48.13% of time at sea and spent 51.87% in port, at anchorage or undergoing repairs. The following assumptions were made:

• The vessel operational profile is assumed constant for each of the following years.
• Annual required CII reduction factors were obtained according to MEPC-83 [39].
• The vessel compliance period is assumed to end on the third consecutive year that the ship is ranked as “D”, or on the first year of “E” ranking; whichever occurs first.
• The fuel storage and handling systems are not designed, and adequate space to facilitate the fuel is assumed to exist onboard the vessel. New-built or retrofitting costs are not accounted for.
• Each fuel is considered for combustion in an ICE, and the engine thermal efficiency has been assumed (as it is a common practice) to be constant across the fuel options. The Fuel Emission Factors (EF) and Lower Heating Values (LHV) are presented in

  Table 2. Fuel Emission Factors (EF) and Lower Heating Value (LHV) (data taken from [47,48]).

  Fuel	Emission Factor (EF) $[\frac{{\mathit{g}\mathit{r}}_{{\mathit{C}\mathit{O}}_2}}{{\mathit{g}\mathit{r}}_{\mathit{f}\mathit{u}\mathit{e}\mathit{l}}}]$	LHV $[\frac{\mathbf{M}\mathbf{J}}{\mathbf{k}\mathbf{g}}]$
  HFO	3.114	40.5
  LFO	3.151	41
  MGO	3.206	42.7
  LPG-P	3.0	46
  LPG-B	3.03	46
  LNG	2.750	49.1
  MeOH	1.375	19.9

  .
• Alternative fuels are considered only for use in the main and auxiliary engines, as these are the ship’s primary energy converters (propulsion and onboard electricity, respectively). Any other auxiliary machinery requiring combustion (e.g., auxiliary boiler) continues to burn conventional fuel.
• Based on the online available data, the following fuel prices were assumed: HFO at 459.5 USD/t [40], LFO at 554 USD/t [40], MGO at 791 USD/t [40], LNG at 540 USD/t (average) [41,42,43], LPG-B at 490 USD/t [44], LPG-P at 520 USD/t [44] and MeOH at 530 USD/t (fossil fuel production) [45].
• Each vessel is assumed to be equipped with a SO_x scrubber unit, combusting LFO or both. Since the dataset comprises annual fuel consumption records for heavy fuel oil (HFO), light fuel oil (LFO), and marine gas oil (MGO), the effects of the scrubber use on fuel consumption are directly included in the calculations through the fleet fuel consumption figures.
• During the implementation of alternative fuels in the auxiliary engines, HFO and LFO are being combusted by the main engine. MGO is used as pilot fuel.
• During the implementation of alternative fuels in the main engine, HFO and LFO are being combusted by the auxiliary engines. MGO is used as pilot fuel.
• During the implementation of alternative fuels, both in the main and auxiliary engines, HFO and LFO are not used. MGO is used as pilot fuel.
• According to the available information on the fleet sample, the vessels are trading within the EU at a percentage of 35% of their annual voyages, and 20% of these voyages occur between two EU ports (80% with only one EU port call). The EU ETS cost is assumed to be surrendered at 100%. The EUA price was considered 70 EUR/t [46].

The following calculations were performed:

The attained CII of each vessel is directly calculated from the sample data as the ratio of CO₂ emissions [gr] produced to the transport work:

$${\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}={\displaystyle \frac{{\mathrm{C}\mathrm{O}}_2}{\mathrm{D}\mathrm{W}\mathrm{T}·\mathrm{D}\mathrm{i}\mathrm{s}\mathrm{t}\mathrm{a}\mathrm{n}\mathrm{c}\mathrm{e}}}\left[{\displaystyle \frac{{\mathrm{g}\mathrm{r}}_{{\mathrm{C}\mathrm{O}}_2}}{\mathrm{t}·\mathrm{n}.\mathrm{m}\mathrm{i}\mathrm{l}\mathrm{e}}}\right],$$

(1)

The annual CO₂ emissions [gr] are obtained by:

$${\mathrm{C}\mathrm{O}}_2={\sum }_{\mathrm{i}=1}^{\mathrm{n}}\mathrm{E}\mathrm{F}·{\mathrm{S}\mathrm{F}\mathrm{C}}_{\mathrm{i}},$$

(2)

where index i represents each fuel (n in total) that is used by each ship, SFC_i is the respective fuel consumption measured in metric tons, and EF is the fuel emission factor, provided in Table 1.

The required CII for the set is calculated according to the regulation as:

$${\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}={\displaystyle \frac{100-\mathrm{z}}{100}}4745{·\mathrm{D}\mathrm{W}\mathrm{T}}^{-0.622},$$

(3)

where parameter z is a reduction factor of 5% for the year 2023 and 2% for each consecutive year. The A (superior) to E (inferior) ranking for bulk carriers is obtained by the rating boundaries set by the regulation [47]:

$$\mathrm{R}\mathrm{a}\mathrm{n}\mathrm{k}\mathrm{i}\mathrm{n}\mathrm{g}=\left\{\begin{array}{c}\mathrm{A}, {\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}<0.86{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\\ \mathrm{B}, 0.86{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\le {\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}<0.94{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\\ \mathrm{C}, 0.94{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\le {\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}<1.06{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\\ \mathrm{D}, 1.06{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\le {\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}<1.18{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}} \\ \mathrm{E}, {\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{A}\mathrm{t}\mathrm{t}}\ge 1.18{\mathrm{C}\mathrm{I}\mathrm{I}}_{\mathrm{r}\mathrm{e}\mathrm{q}}\end{array}\right.$$

(4)

For each scenario, the alternative fuel accounts for 95% of the fuel energy, and the pilot fuel for 5%. The fuel energy, Ef [MJ], is assumed to remain constant and is obtained from the fuel quantities and their respective lower heating values (LHV, [MJ/kg]) as the following:

$${\mathrm{E}}_{\mathrm{f}}={\sum }_{\mathrm{i}=1}^{\mathrm{n}}{\mathrm{S}\mathrm{F}\mathrm{C}}_{\mathrm{i}}{·\mathrm{L}\mathrm{H}\mathrm{V}}_{\mathrm{i}}$$

(5)

The total fuel cost (TFC [USD]) is calculated from the required quantities and fuel prices (p_i):

$$\mathrm{T}\mathrm{F}\mathrm{C}={\sum }_{\mathrm{i}=1}^{\mathrm{n}}{\mathrm{S}\mathrm{F}\mathrm{C}}_{\mathrm{i}}·{\mathrm{p}}_{\mathrm{i}}$$

(6)

Finally, by multiplying the coefficients under assumption 12, the CO₂ amount produced and an EU ETS price at EUR 70, the EU ETS cost function is:

ETS Cost [€] = CO₂ [t] × 14.7 [€/t],

(7)

where 14.7 is a weighted average cost obtained from the EUA price, voyage coverage and compliance rate of 0.21. The calculation procedure is illustrated in Figure 1:

3. Results and Discussion

In this section, the results of the work are presented. For illustrative purposes and page economy, the calculation procedure and results are presented for one vessel of the fleet sample. The demonstrated results include the CII ranking of the vessel, the summary tables of fuel consumption, the CO₂ emissions amount, the total fuel cost and the EU ETS cost. Then, a sensitivity analysis is presented in the figure, highlighting the dependence of the operational costs on the EU allowance price and the vessel operational profile. Afterwards, comparative figures of the CII ranking, total fuel cost and EU ETS cost are provided among the sample population.

3.1. Vessel Results Demonstration

To avoid repeating the results for all 40 ships, ship 26 is selected as a representative case to demonstrate all compliance and cost figures. It is a Panamax vessel with an EOC date of 2025. In

Table 3. Scenarios and fuel consumption for ship 26.

Scenario		HFO [t]	LFO [t]	MGO [t]	Alternative Fuel [t]
Business as usual	1	4666	919	100	0
LNG in A/E	2	3400	669	146	1234
LNG in M/E	3	1266	249	223	3312
LNG in A/E and M/E	4	0	0	269	4546
LPG-B in A/E	5	3400	669	146	1296
LPG-B in M/E	6	1266	249	223	3479
LPG-B in A/E and M/E	7	0	0	269	4775
LPG-P in A/E	8	3400	669	146	1279
LPG-P in M/E	9	1266	249	223	3434
LPG-P in A/E and M/E	10	0	0	269	4713
MeOH in A/E	11	3400	669	146	2976
MeOH in M/E	12	1266	249	223	7990
MeOH in A/E and M/E	13	0	0	269	10,966

, all the scenarios are numbered, and the amount of conventional and alternative fuels burnt from ship 26 is included.

In Figure 2, the CII ratings of ship 26 for each scenario are evident. Among all fuel cases, combustion of LNG in both the main and auxiliary engines provides the maximum life extension and guarantees environmental compliance beyond the year 2030. Combustion of LNG in the main engine can also render the ship compliant until 2032, while using LNG only in the auxiliary engine exhibits moderate improvements up to 2028. Apart from LNG, burning either LPG-P or LPG-B in all engines are the only two scenarios ensuring environmental compliance up to 2030; each other option exhibits conservative results with the ship being unreliable by the end of this decade. Among all fuel options, MeOH has the least significant effect on compliance, as the vessel performance is slightly improved, extending the compliance period only by 1 to 3 years, depending on the combustion applications.

Combining the results of Figure 2 and Figure 3, MeOH exhibits the highest fuel costs compared to the baseline case of maintaining the use of conventional fuels. Although CO₂ emissions and, therefore, the EU ETS costs are reduced by 2.8% to 10.1% compared to the baseline case, MeOH exhibits the highest values among the four alternative fuel options.

EU ETS Variation Analysis

Throughout Figure 4, Figure 5, Figure 6 and Figure 7, for each fuel solution, different cases of the EU ETS cost values are presented. Apart from the selected case (assumption 12), four additional cases are considered for ship 26; trading within the EU by 35% with an allowance price of EUR 80 and EUR 100, and trading within the EU by 50% at the allowance prices of EUR 80 and EUR 100.

From this analysis, the EU ETS cost for LNG is estimated to range between EUR 196,447 and EUR 496,968. The corresponding values for LPG-B and LPG-P are EUR 225,350–EUR 512,704 and EUR 220,516–EUR 510,027, respectively, while for methanol, the cost ranges between EUR 234,311 and EUR 517,668. These results demonstrate that the EU ETS cost is highly sensitive to both the share of annual emissions generated within EU waters and the allowance price. This cost has a significant impact on vessel operations, as it represents a considerable share of annual revenue. Assuming a typical Panamax daily freight rate of 16,000 USD/day (with values ranging from 8500 to 28,500 USD/day [49]) and 175 sailing days annually (approximately 48% of the year), the annual revenue is between 1,487,500 and 4,900,000 USD. Under these conditions, the EU ETS cost accounts for approximately 4% to 35% of the annual revenue, underlining its critical influence on the vessel’s economic performance.

3.2. Fleet Results Demonstration

In this section, the results of the calculation procedure are presented. First, the CII for each vessel is calculated, illustrating the expected compliance period of the vessel, shown in Figure 8. Then, in Figure 9, the end of compliance is presented as a function of the year of build and the deadweight. Afterwards, for each fuel, the improvements in CII in terms of the compliance period increase, CO₂ emission reduction, fuel consumption and cost, as well as the additional cost accounting for the EU ETS, are calculated. For illustrative purposes, the procedure is presented in full detail for the case of LNG; the CII ratings are presented through Figure 10, Figure 11 and Figure 12, while for each implementation scenario,

Table 4. Fuel consumption, costs and EU ETS for the baseline scenario and the use of LNG in auxiliary engines.

	Business as Usual						LNG in A/E
Ship	HFO [t]	LFO [t]	MGO [t]	Fuel Cost [USD]	CO2 [t]	ETS [EUR]	HFO [t]	LFO [t]	MGO [t]	LNG [t]	Fuel Cost [USD]	CO2 [t]	ETS [EUR]
1	3595	1212	333	2,659,463	16,081	236,395	2620	883	309	1121	2,556,005	15,011	220,666
2	0	4919	204	2,886,109	16,155	237,473	0	3584	216	1135	2,825,037	15,108	222,084
3	2996	685	275	2,034,269	12,369	181,824	2183	499	251	861	1,951,231	11,544	169,702
4	771	4243	361	3,005,162	16,927	248,830	562	3091	333	1188	2,923,877	15,826	232,636
5	2709	1433	543	2,522,440	14,692	215,977	1974	1044	457	1027	2,417,007	13,722	201,714
6	3463	835	504	2,522,186	15,030	220,946	2523	609	429	1048	2,411,347	14,032	206,264
7	3809	375	272	2,250,367	13,914	204,542	2775	273	255	968	2,155,381	12,983	190,846
8	3726	1067	125	2,478,407	15,367	225,890	2715	777	155	1069	2,389,941	14,340	210,795
9	0	5039	136	2,898,548	16,313	239,795	0	3671	167	1146	2,841,671	15,255	224,245
10	2754	1054	215	2,075,147	12,585	184,997	2006	768	209	877	1,997,819	11,748	172,688
11	4113	0	422	2,306,933	14,161	208,163	2997	0	366	985	2,198,116	13,212	194,220
12	2426	2671	51	2,684,160	16,133	237,150	1767	1946	104	1126	2,610,762	15,066	221,468
13	1677	2316	208	2,252,022	13,187	193,850	1222	1688	206	922	2,183,575	12,319	181,094
14	2309	566	462	1,786,415	10,456	153,701	1682	413	380	730	1,702,634	9763	143,517
15	4326	0	481	2,455,753	15,014	220,703	3152	0	412	1044	2,338,422	14,009	205,929
16	3192	2263	247	2,981,018	17,864	262,608	2326	1649	254	1247	2,881,958	16,681	245,212
17	3476	1115	417	2,614,889	15,674	230,408	2533	813	368	1093	2,507,992	14,632	215,096
18	3421	415	96	1,947,406	12,267	180,331	2493	302	120	852	1,872,887	11,444	168,226
19	3253	440	327	2,063,335	12,566	184,727	2371	321	290	875	1,973,729	11,727	172,394
20	1617	1390	408	1,867,777	10,722	157,620	1178	1013	342	750	1,793,432	10,017	147,256
21	3419	624	23	2,004,792	12,686	186,481	2491	455	69	881	1,934,028	11,834	173,965
22	896	2619	483	2,261,940	12,592	185,099	653	1908	404	884	2,183,801	11,772	173,049
23	2335	3314	96	3,032,670	18,022	264,926	1702	2414	145	1260	2,951,508	16,834	247,458
24	4374	0	112	2,188,352	13,982	205,537	3187	0	139	970	2,098,703	13,040	191,684
25	3930	360	573	2,537,664	15,210	223,581	2864	262	480	1060	2,417,190	14,196	208,683
26	4666	919	100	2,827,706	17,746	260,865	3400	669	146	1234	2,725,150	16,557	243,382
27	3303	220	156	1,830,799	11,481	168,777	2407	160	161	798	1,755,541	10,711	157,446
28	3755	400	366	2,312,362	14,126	207,653	2736	292	325	983	2,210,854	13,182	193,777
29	3946	292	630	2,552,333	15,227	223,837	2876	213	521	1061	2,427,805	14,213	208,929
30	1726	3456	296	2,976,433	17,213	253,033	1258	2518	287	1205	2,889,744	16,084	236,442
31	4433	151	137	2,319,794	14,721	216,392	3230	110	160	1022	2,225,749	13,730	201,831
32	4231	1336	167	2,903,064	17,922	263,453	3083	974	196	1248	2,799,524	16,725	245,865
33	2460	2007	25	2,312,086	14,063	206,732	1793	1462	76	981	2,246,203	13,130	193,017
34	1398	3515	209	2,783,207	16,100	236,669	1019	2561	219	1128	2,708,805	15,045	221,166
35	4256	0	423	2,376,260	14,608	214,745	3101	0	368	1016	2,264,721	13,630	200,357
36	2349	2060	348	2,542,923	14,920	219,331	1711	1501	315	1043	2,453,549	13,936	204,863
37	2506	1825	224	2,391,142	14,276	209,852	1826	1330	222	996	2,310,588	13,331	195,960
38	2631	1370	481	2,400,633	14,049	206,527	1917	998	408	981	2,302,072	13,121	192,877
39	2878	2065	194	2,678,833	16,093	236,568	2097	1505	208	1123	2,591,519	15,027	220,892
40	293	3921	396	2,624,788	14,536	213,677	214	2857	349	1022	2,552,608	13,594	199,830

and

Table 5. Fuel consumption, costs and EU ETS for the use of LNG in the main engine and the use of LNG in all engines.

	LNG in M/E							LNG in M/E & A/E
Ship	HFO [t]	LFO [t]	MGO [t]	LNG [t]	Fuel Cost [USD]	CO2 [t]	ETS [EUR]	MGO [t]	LNG [t]	Fuel Cost [USD]	CO2 [t]	ETS [EUR]
1	976	329	268	3009	2,472,808	13,209	194,179	244	4130	2,423,434	12,140	178,460
2	0	1335	236	3048	2,592,787	13,344	196,164	248	4184	2,454,957	12,298	180,782
3	813	186	211	2313	1,895,727	10,156	149,289	188	3174	1,862,788	9332	137,175
4	209	1151	287	3190	2,701,215	13,971	205,368	259	4378	2,569,076	12,870	189,185
5	735	389	310	2756	2,293,210	12,089	177,707	224	3783	2,219,741	11,120	163,461
6	940	227	303	2814	2,320,259	12,350	181,549	228	3862	2,266,203	11,353	166,882
7	1034	102	227	2598	2,115,955	11,414	167,782	211	3566	2,09,2558	10,483	154,095
8	1011	290	204	2871	2,341,190	12,610	185,365	233	3940	2,312,259	11,583	170,274
9	0	1367	219	3077	2,613,652	13,473	198,049	250	4223	2,478,333	12,415	182,503
10	747	286	198	2355	1,934,221	10,337	151,958	191	3232	1,896,477	9500	139,656
11	1116	0	271	2644	2,155,061	11,615	170,747	215	3629	2,129,509	10,668	156,816
12	658	725	193	3024	2,500,899	13,268	195,045	246	4151	2,435,700	12,202	179,364
13	455	629	203	2476	2,064,799	10,858	159,610	201	3399	1,994,310	9990	146,860
14	627	154	241	1960	1,624,476	8597	126,380	159	2689	1,578,092	7905	116,210
15	1174	0	296	2804	2,288,138	12,317	181,059	228	3849	2,258,297	11,313	166,300
16	866	614	265	3347	2,765,171	14,688	215,911	272	4594	2,695,863	13,505	198,522
17	943	303	287	2934	2,417,044	12,879	189,315	238	4027	2,363,070	11,838	174,015
18	928	113	161	2289	1,854,247	10,057	147,833	186	3141	1,843,184	9233	135,731
19	883	119	228	2349	1,922,253	10,315	151,628	191	3224	1,891,704	9476	139,304
20	439	377	230	2014	1,685,990	8831	129,812	164	2765	1,622,227	8127	119,460
21	928	169	146	2367	1,916,484	10,400	152,877	192	3248	1,906,072	9548	140,362
22	243	711	271	2373	2,012,659	10,392	152,768	193	3257	1,911,094	9574	140,732
23	634	899	226	3382	2,808,466	14,832	218,028	275	4641	2,723,577	13,644	200,563
24	1187	0	185	2605	2,098,269	11,452	168,346	212	3575	2,098,011	10,510	154,496
25	1067	98	324	2845	2,338,147	12,490	183,607	231	3905	2,291,238	11,478	168,726
26	1266	249	223	3312	2,689,090	14,553	213,927	269	4546	2,667,690	13,364	196,447
27	896	60	169	2142	1,736,433	9412	138,361	174	2940	1,725,093	8642	127,035
28	1019	109	255	2640	2,157,525	11,593	170,414	214	3623	2,125,877	10,650	156,548
29	1071	79	339	2849	2,344,020	12,506	183,840	231	3910	2,294,298	11,493	168,951
30	468	938	272	3236	2,711,791	14,184	208,500	263	4441	2,606,184	13,056	191,918
31	1203	41	200	2744	2,215,873	12,061	177,301	223	3766	2,210,012	11,071	162,744
32	1148	363	244	3350	2,735,586	14,710	216,236	272	4597	2,697,641	13,514	198,653
33	668	545	163	2634	2,167,650	11,558	169,907	214	3615	2,121,032	10,625	156,192
34	379	954	236	3028	2,539,055	13,269	195,053	246	4155	2,438,315	12,215	179,556
35	1155	0	276	2728	2,222,001	11,982	176,135	221	3743	2,196,648	11,004	161,760
36	637	559	260	2800	2,328,808	12,279	180,499	227	3843	2,254,779	11,295	166,041
37	680	495	219	2676	2,212,815	11,739	172,563	217	3672	2,154,792	10,794	158,678
38	714	372	286	2635	2,189,080	11,558	169,900	214	3616	2,122,024	10,630	156,265
39	781	560	231	3015	2,489,068	13,230	194,487	245	4138	2,428,267	12,164	178,816
40	80	1064	270	2743	2,337,053	12,008	176,515	223	3765	2,209,131	11,067	162,679

contain the fuel consumption and produced CO₂ amounts, fuel costs and EU ETS costs. For the remaining fuels, the results are included in the summary in

Table 6. Use of LNG as fuel: EOC, fuel and EU ETS cost comparison [%].

	Compliance Period Extension				Fuel Cost			EU ETS Cost [70 EUR/t]
ID	Base- Line	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E
1	>2030	0	>2030		−1.9%	−5.1%	−7.0%	−6.7%	−17.9%	−24.5%
2	2027	2			−4.7%	−12.5%	−17.1%	−6.5%	−17.4%	−23.9%
3	2026	3			−1.7%	−4.5%	−6.1%	−6.7%	−17.9%	−24.6%
4	2029	1			−4.3%	−11.6%	−15.9%	−6.5%	−17.5%	−24.0%
5	>2030	0			−2.9%	−7.9%	−10.9%	−6.6%	−17.7%	−24.3%
6	2025	3			−2.2%	−5.9%	−8.1%	−6.6%	−17.8%	−24.5%
7	2031	0			−1.1%	−2.9%	−4.0%	−6.7%	−18.0%	−24.7%
8	2025	2			−1.2%	−3.2%	−4.4%	−6.7%	−17.9%	−24.6%
9	>2030	0			−4.5%	−12.2%	−16.8%	−6.5%	−17.4%	−23.9%
10	2030	0			−1.9%	−5.0%	−6.8%	−6.7%	−17.9%	−24.5%
11	2030	0			−1.1%	−3.1%	−4.2%	−6.7%	−18.0%	−24.7%
12	>2030	0			−2.4%	−6.5%	−9.0%	−6.6%	−17.8%	−24.4%
13	2025	2			−3.1%	−8.4%	−11.5%	−6.6%	−17.7%	−24.2%
14	>2030	0			−2.7%	−7.1%	−9.8%	−6.6%	−17.8%	−24.4%
15	2025	0			−1.3%	−3.4%	−4.6%	−6.7%	−18.0%	−24.6%
16	2025	1			−2.3%	−6.3%	−8.7%	−6.6%	−17.8%	−24.4%
17	2026	2			−2.1%	−5.7%	−7.8%	−6.6%	−17.8%	−24.5%
18	2025	3			−0.6%	−1.6%	−2.2%	−6.7%	−18.0%	−24.7%
19	2027	4			−1.5%	−4.1%	−5.6%	−6.7%	−17.9%	−24.6%
20	2030	0			−3.4%	−9.2%	−12.7%	−6.6%	−17.6%	−24.2%
21	2025	2			−0.5%	−1.4%	−2.0%	−6.7%	−18.0%	−24.7%
22	2025	3			−4.4%	−11.9%	−16.4%	−6.5%	−17.5%	−24.0%
23	2025	1			−2.8%	−7.5%	−10.3%	−6.6%	−17.7%	−24.3%
24	>2030	0			0.0%	0.0%	0.0%	−6.7%	−18.1%	−24.8%
25	>2030	0			−1.9%	−5.1%	−7.0%	−6.7%	−17.9%	−24.5%
26	2025	2			−0.8%	−2.1%	−2.9%	−6.7%	−18.0%	−24.7%
27	2029	1			−0.6%	−1.7%	−2.4%	−6.7%	−18.0%	−24.7%
28	>2030	0			−1.4%	−3.8%	−5.2%	−6.7%	−17.9%	−24.6%
29	2025	1			−2.0%	−5.4%	−7.4%	−6.7%	−17.9%	−24.5%
30	2029	1			−3.5%	−9.5%	−13.0%	−6.6%	−17.6%	−24.2%
31	2029	1			−0.3%	−0.7%	−1.0%	−6.7%	−18.1%	−24.8%
32	2025	4			−1.3%	−3.6%	−4.9%	−6.7%	−17.9%	−24.6%
33	2025	1			−2.0%	−5.5%	−7.5%	−6.6%	−17.8%	−24.4%
34	2030	1			−3.6%	−9.6%	−13.2%	−6.6%	−17.6%	−24.1%
35	>2030	0			−1.1%	−3.0%	−4.1%	−6.7%	−18.0%	−24.7%
36	2025	3			−2.9%	−7.9%	−10.8%	−6.6%	−17.7%	−24.3%
37	2029	1			−2.4%	−6.6%	−9.0%	−6.6%	−17.8%	−24.4%
38	2025	3			−2.8%	−7.6%	−10.4%	−6.6%	−17.7%	−24.3%
39	>2030	0			−2.3%	−6.2%	−8.4%	−6.6%	−17.8%	−24.4%
40	>2030	0			−4.8%	−12.8%	−17.6%	−6.5%	−17.4%	−23.9%

,

Table 7. Use of butane LPG as fuel: EOC, fuel and EU ETS cost comparison [%].

	Compliance Period Extension				Fuel Cost			EU ETS Cost [70 EUR/t]
ID	Base- Line	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E
1	>2030	2	0	0	−3.0%	−8.0%	−11.0%	−3.6%	−9.8%	−13.4%
2	2027	1	3	3	−5.6%	−15.1%	−20.7%	−3.4%	−9.2%	−12.7%
3	2026	2	4	4	−2.8%	−7.4%	−10.2%	−3.7%	−9.8%	−13.5%
4	2029	2	1	1	−5.3%	−14.3%	−19.6%	−3.5%	−9.3%	−12.8%
5	>2030	2	0	0	−4.0%	−10.7%	−14.7%	−3.6%	−9.6%	−13.2%
6	2025	2	4	5	−3.3%	−8.8%	−12.0%	−3.6%	−9.7%	−13.4%
7	2030	2	0	0	−2.2%	−5.9%	−8.1%	−3.7%	−9.9%	−13.6%
8	2025	0	3	5	−2.3%	−6.2%	−8.5%	−3.7%	−9.9%	−13.5%
9	2030	2	0	0	−5.5%	−14.8%	−20.3%	−3.4%	−9.3%	−12.7%
10	2030	2	0	0	−2.9%	−7.9%	−10.9%	−3.6%	−9.8%	−13.4%
11	2030	2	0	0	−2.3%	−6.1%	−8.4%	−3.7%	−9.9%	−13.6%
12	2034	1	0	0	−3.5%	−9.4%	−12.9%	−3.6%	−9.6%	−13.2%
13	2025	1	4	5	−4.2%	−11.2%	−15.3%	−3.6%	−9.5%	−13.1%
14	>2030	2	0	0	−3.7%	−10.0%	−13.7%	−3.6%	−9.7%	−13.3%
15	2025	0	2	4	−2.4%	−6.4%	−8.8%	−3.7%	−9.9%	−13.6%
16	2025	0	2	4	−3.4%	−9.2%	−12.6%	−3.6%	−9.7%	−13.3%
17	2027	2	3	3	−3.2%	−8.6%	−11.7%	−3.6%	−9.7%	−13.4%
18	2025	2	4	5	−1.7%	−4.7%	−6.4%	−3.7%	−10.0%	−13.7%
19	2025	2	5	5	−2.6%	−7.1%	−9.7%	−3.7%	−9.8%	−13.5%
20	2030	2	0	0	−4.5%	−12.0%	−16.4%	−3.5%	−9.5%	−13.1%
21	2025	0	3	5	−1.7%	−4.5%	−6.2%	−3.7%	−10.0%	−13.7%
22	2025	2	4	5	−5.4%	−14.6%	−20.0%	−3.5%	−9.3%	−12.8%
23	2025	0	2	4	−3.8%	−10.3%	−14.2%	−3.6%	−9.6%	−13.2%
24	>2030	2	0	0	−1.2%	−3.2%	−4.4%	−3.7%	−10.0%	−13.8%
25	>2030	1	0	0	−3.0%	−8.0%	−11.0%	−3.7%	−9.8%	−13.4%
26	2025	1	4	5	−1.9%	−5.1%	−7.1%	−3.7%	−9.9%	−13.6%
27	2029	2	1	1	−1.8%	−4.8%	−6.6%	−3.7%	−10.0%	−13.7%
28	>2030	2	0	0	−2.5%	−6.8%	−9.3%	−3.7%	−9.9%	−13.5%
29	2025	0	2	4	−3.1%	−8.3%	−11.4%	−3.6%	−9.8%	−13.4%
30	2029	2	1	1	−4.5%	−12.2%	−16.7%	−3.5%	−9.5%	−13.0%
31	2029	2	1	1	−1.4%	−3.8%	−5.2%	−3.7%	−10.0%	−13.7%
32	2025	2	5	5	−2.5%	−6.6%	−9.0%	−3.7%	−9.8%	−13.5%
33	2025	0	2	4	−3.1%	−8.4%	−11.5%	−3.6%	−9.7%	−13.3%
34	2029	2	1	1	−4.6%	−12.4%	−17.0%	−3.5%	−9.5%	−13.0%
35	>2030	1	0	0	−2.2%	−6.0%	−8.2%	−3.7%	−9.9%	−13.6%
36	2025	2	5	5	−4.0%	−10.7%	−14.6%	−3.6%	−9.6%	−13.2%
37	2029	2	1	1	−3.5%	−9.4%	−13.0%	−3.6%	−9.7%	−13.3%
38	2025	1	4	5	−3.9%	−10.4%	−14.3%	−3.6%	−9.6%	−13.2%
39	2030	2	0	0	−3.4%	−9.0%	−12.4%	−3.6%	−9.7%	−13.3%
40	2030	1	0	0	−5.7%	−15.4%	−21.1%	−3.4%	−9.2%	−12.7%

,

Table 8. Use of propane LPG as fuel: EOC, fuel and EU ETS cost comparison [%].

	Compliance Period Extension				Fuel Cost			EU ETS Cost [70 EUR/t]
ID	Base- Line	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E
1	>2030	0	0	0	−1.9%	−22.4%	−7.1%	−2.7%	−7.3%	−10.0%
2	2027	1	3	3	−4.7%	−12.6%	−17.3%	−2.5%	−6.7%	−9.2%
3	2026	2	4	4	−1.7%	−4.6%	−6.3%	−2.7%	−7.3%	−10.0%
4	2029	1	1	1	−4.4%	−11.7%	−16.1%	−2.5%	−6.8%	−9.3%
5	>2030	0	0	0	−3.0%	−8.0%	−11.0%	−2.6%	−7.1%	−9.7%
6	2025	2	5	5	−2.2%	−6.0%	−8.2%	−2.7%	−7.2%	−9.9%
7	2030	0	0	0	−1.1%	−3.0%	−4.1%	−2.8%	−7.4%	−10.1%
8	2025	0	4	5	−1.2%	−3.3%	−4.6%	−2.7%	−7.4%	−10.1%
9	2030	0	0	0	−4.6%	−12.3%	−16.9%	−2.5%	−6.7%	−9.2%
10	2030	0	0	0	−1.9%	−5.1%	−7.0%	−2.7%	−7.3%	−10.0%
11	2030	0	0	0	−1.2%	−3.2%	−4.4%	−2.8%	−7.4%	−10.1%
12	2034	0	0	0	−2.5%	−6.6%	−9.1%	−2.7%	−7.1%	−9.8%
13	2025	1	4	5	−3.2%	−8.5%	−11.7%	−2.6%	−7.0%	−9.6%
14	>2030	0	0	0	−2.7%	−7.2%	−9.9%	−2.7%	−7.2%	−9.8%
15	2025	0	2	4	−1.3%	−3.5%	−4.8%	−2.8%	−7.4%	−10.1%
16	2025	0	3	5	−2.4%	−6.4%	−8.8%	−2.7%	−7.2%	−9.8%
17	2027	1	3	3	−2.1%	−5.8%	−7.9%	−2.7%	−7.2%	−9.9%
18	2025	2	5	5	−0.6%	−1.7%	−2.3%	−2.8%	−7.5%	−10.2%
19	2025	4	5	5	−1.6%	−4.2%	−5.8%	−2.7%	−7.3%	−10.1%
20	2030	0	0	0	−3.5%	−9.3%	−12.8%	−2.6%	−7.0%	−9.6%
21	2025	0	4	5	−0.6%	−1.5%	−2.1%	−2.8%	−7.4%	−10.2%
22	2025	2	5	5	−4.5%	−12.0%	−16.5%	−2.5%	−6.8%	−9.3%
23	2025	0	3	5	−2.8%	−7.6%	−10.4%	−2.6%	−7.1%	−9.7%
24	>2030	0	0	0	−0.1%	−0.1%	−0.2%	−2.8%	−7.5%	−10.3%
25	>2030	0	0	0	−1.9%	−5.2%	−7.2%	−2.7%	−7.3%	−10.0%
26	2025	1	4	5	−0.8%	−2.2%	−3.0%	−2.8%	−7.4%	−10.2%
27	2029	1	1	1	−0.7%	−1.8%	−2.5%	−2.8%	−7.5%	−10.2%
28	>2030	0	0	0	−1.5%	−3.9%	−5.3%	−2.7%	−7.3%	−10.1%
29	2025	0	3	5	−2.0%	−5.5%	−7.5%	−2.7%	−7.3%	−10.0%
30	2029	1	1	1	−3.6%	−9.6%	−13.1%	−2.6%	−6.9%	−9.5%
31	2029	1	1	1	−0.3%	−0.8%	−1.1%	−2.8%	−7.5%	−10.3%
32	2025	2	5	5	−1.4%	−3.7%	−5.1%	−2.7%	−7.3%	−10.1%
33	2025	0	3	5	−2.1%	−5.6%	−7.6%	−2.7%	−7.2%	−9.9%
34	2029	1	1	1	−3.6%	−9.7%	−13.3%	−2.6%	−6.9%	−9.5%
35	>2030	0	0	0	−1.1%	−3.1%	−4.2%	−2.8%	−7.4%	−10.2%
36	2025	2	5	5	−3.0%	−8.0%	−10.9%	−2.6%	−7.1%	−9.7%
37	2029	1	1	1	−2.5%	−6.7%	−9.2%	−2.7%	−7.1%	−9.8%
38	2025	1	5	5	−2.9%	−7.7%	−10.6%	−2.7%	−7.1%	−9.8%
39	2030	0	0	0	−2.3%	−6.3%	−8.6%	−2.7%	−7.2%	−9.8%
40	2030	0	0	0	−4.8%	−12.9%	−17.7%	−2.5%	−6.7%	−9.2%

and

Table 9. Use of methanol as fuel: EOC, fuel and EU ETS cost comparison [%].

	Compliance Period Extension				Fuel Cost			EU ETS Cost [70 EUR/t]
ID	Base- Line	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E	A/E	M/E	M/E and A/E
1	>2030	0	0	0	29.9%	29.0%	80.2%	−2.70%	−7.3%	−10.0%
2	2027	1	2	3	23.6%	22.3%	63.5%	−2.50%	−6.7%	−9.2%
3	2026	2	3	4	30.4%	29.5%	81.6%	−2.72%	−7.3%	−10.0%
4	2029	1	1	1	24.4%	22.7%	65.5%	−2.53%	−6.8%	−9.3%
5	>2030	0	0	0	27.5%	25.5%	73.8%	−2.65%	−7.1%	−9.7%
6	2025	1	3	4	29.2%	27.6%	78.4%	−2.69%	−7.2%	−9.9%
7	2030	0	0	0	31.7%	31.1%	85.2%	−2.76%	−7.4%	−10.1%
8	2025	0	2	3	31.4%	31.5%	84.4%	−2.74%	−7.4%	−10.1%
9	2030	0	0	0	23.9%	22.7%	64.1%	−2.50%	−6.7%	−9.2%
10	2030	0	0	0	30.0%	29.3%	80.4%	−2.71%	−7.3%	−10.0%
11	2030	0	0	0	31.6%	30.4%	84.7%	−2.76%	−7.4%	−10.1%
12	2034	0	0	0	28.6%	28.6%	76.9%	−2.66%	−7.1%	−9.8%
13	2025	0	2	4	27.1%	26.2%	72.7%	−2.62%	−7.0%	−9.6%
14	>2030	0	0	0	28.2%	25.9%	75.6%	−2.67%	−7.2%	−9.8%
15	2025	0	0	2	31.3%	30.0%	84.0%	−2.75%	−7.4%	−10.1%
16	2025	0	1	2	28.8%	28.3%	77.4%	−2.67%	−7.2%	−9.8%
17	2027	0	2	3	29.4%	28.2%	78.9%	−2.70%	−7.2%	−9.9%
18	2025	1	3	4	32.8%	33.0%	88.1%	−2.78%	−7.5%	−10.2%
19	2025	3	5	5	30.7%	29.7%	82.4%	−2.73%	−7.3%	−10.1%
20	2030	0	0	0	26.4%	24.3%	70.9%	−2.61%	−7.0%	−9.6%
21	2025	0	2	3	32.9%	33.4%	88.4%	−2.77%	−7.4%	−10.2%
22	2025	1	3	4	24.1%	21.6%	64.7%	−2.53%	−6.8%	−9.3%
23	2025	0	1	2	27.8%	27.6%	74.7%	−2.63%	−7.1%	−9.7%
24	>2030	0	0	0	34.1%	34.3%	91.6%	−2.81%	−7.5%	−10.3%
25	>2030	0	0	0	29.8%	28.1%	80.1%	−2.72%	−7.3%	−10.0%
26	2025	0	3	4	32.4%	32.6%	87.0%	−2.76%	−7.4%	−10.2%
27	2029	1	1	1	32.7%	32.5%	87.8%	−2.78%	−7.5%	−10.2%
28	>2030	0	0	0	31.0%	29.9%	83.1%	−2.74%	−7.3%	−10.1%
29	2025	0	1	2	29.6%	27.7%	79.5%	−2.71%	−7.3%	−10.0%
30	2029	1	1	1	26.2%	25.0%	70.3%	−2.59%	−6.9%	−9.5%
31	2029	1	1	1	33.6%	33.7%	90.1%	−2.80%	−7.5%	−10.3%
32	2025	2	4	5	31.1%	31.0%	83.6%	−2.73%	−7.3%	−10.1%
33	2025	0	1	2	29.6%	29.7%	79.4%	−2.68%	−7.2%	−9.9%
34	2029	1	1	1	26.0%	25.1%	69.9%	−2.58%	−6.9%	−9.5%
35	>2030	0	0	0	31.6%	30.5%	85.0%	−2.76%	−7.4%	−10.2%
36	2025	2	4	5	27.5%	26.3%	73.9%	−2.64%	−7.1%	−9.7%
37	2029	1	1	1	28.6%	27.9%	76.8%	−2.66%	−7.1%	−9.8%
38	2025	1	3	4	27.8%	26.0%	74.5%	−2.65%	−7.1%	−9.8%
39	2030	0	0	0	29.0%	28.5%	77.8%	−2.67%	−7.2%	−9.8%
40	2030	0	0	0	23.4%	21.2%	62.7%	−2.50%	−6.7%	−9.2%

.

In Figure 8, the CII ranking for each vessel from 2023 to 2030 is presented. The reduction factors used, as stated in assumption 2, are based on the results of IMO MEPC-83. For the Handymax set, the average annual speed ranged between 11–12 knots, and the average end of compliance (EOC, end of the vessel compliance period) occurred after 16 years, measured from the year of build of the vessels. The Panamax-Supramax set also exhibited, on average, an EOC of 16 years, corresponding to annual achieved speeds from 9 to 14 knots.

In Figure 9, the end of compliance (EOC) of each vessel is shown as a function of the year of build (YOB) and the deadweight (DWT) for both the Handymax and Panamax-Supramax vessels in the sample. The results indicate that, on average, the vessels that were recently built exhibit delayed EOC dates. This strongly suggests the positive impact of EEDI regulation on ship design, demonstrating increased energy efficiency through an optimized hull design and reduced vessel power requirements. For the Panamax-Supramax set, a trend can be observed between the EOC and DWT; the compliance period is extended as the vessel’s carrying capacity increases. However, the DWT is not the sole parameter determining vessel performance. The correlation between CII behavior and vessel size is influenced by power requirements, hull fouling conditions and operational parameters, including the number of voyages, average service speed during charter operations, time distribution at sea, idle periods and in port, as well as the percentage of time the ship operates in laden or ballast conditions. This trend agrees with the literature, which indicates that the carbon cost of transportation is reduced for larger vessels [18,19]. The same behavior is not observed for the Handymax vessels; however, no conclusion can be drawn since their number in the sample is limited.

In Figure 10, the CII values when LNG is combusted only in auxiliary engines are presented. Compared to the conventional fuel case, 40% of the sample achieves compliance up to 2030, whereas 27.5% of the fleet achieves a moderate energy efficiency ranking.

In Figure 11, the CII ranking of the fleet is presented for the case of combusting LNG only in the main engine. It is evident that the total population of the sample achieves environmental compliance, with 70% of the measures reaching 2030 with at least “C” ranking values. Moreover, 25% of the ships, by 2030, will have achieved at least a minor superior ranking (“B”).

A superior extension of the compliance period is achieved with the combustion of LNG in all engines, as illustrated in Figure 12. With this solution, for every vessel of the population of the sample, the compliance period is extended and reliability guaranteed; while 52.5% of the fleet exhibits at least a “B” ranking by 2030.

In Table 4 and Table 5, the values of fuel consumption, fuel costs, CO₂ emissions and EU ETS costs are presented for the three LNG implementation scenarios. It is observed that fuel costs increase progressively with scenario complexity, with implementation in auxiliary engines considered the least complex option. This escalation in fuel costs is accompanied by a corresponding reduction in emission costs, as the lower carbon intensity of LNG compared to conventional fuels results in decreased CO₂ emissions and consequently lower EU ETS penalties. It is noteworthy that, due to fuel prices, lower fuel heating values and fuel consumption, the operational cost of each LNG scenario is lower than the operational cost of the conventional fuel case by 2.2%, 5.9% and 8.2% for each implementation case.

In Table 6, the results of all LNG scenarios are summarized and compared to the baseline case. By investing in LNG technology, depending on the implementation scenario, the vessel CII ranking can be sincerely improved and the compliance period can even exceed 2030. Correspondingly, the average annual fuel costs are reduced from 2.2% to 8.2%. The EU ETS costs are reduced for the three implementation scenarios by 6.6%, 17.8% and 24.4%. The combined effect of extended compliance periods and the reduced emission penalties based on the exhibited fuel cost demonstrates that LNG implementation provides both regulatory compliance benefits and economic advantages, with the optimal scenario selection depending on the vessel operator’s risk tolerance and investment capacity.

In Table 7, the comparative results between LPG-B applications and the baseline scenario are included. When LPG-B is implemented in auxiliary engines, conservative improvements in the compliance period of each vessel are achieved, with only 50% of the fleet reaching 2030 and only 10% of the population entering the next decade with a “C” ranking. When LPG-P is implemented in the main engine, 67.5% of the fleet achieves compliance until 2030, while 40% of the fleet is ranked as “C” by 2030. The most significant effect on the extension of the compliance period for each vessel is achieved when LPG-B is burnt in all ICEs. Specifically, 87.5% of the vessels exhibit extended compliance periods up to 2030, with 35% of the ships reaching 2030 with at least moderate operational efficiency (ranking “C”).

Annual fuel costs are decreased compared to the baseline case by an average value of 3.3%, 8.8% and 12.1% and are lower than the LNG case. These cost values correspond to a moderate reduction in EU ETS costs, ranging from 3.6% to 13.3%. While LPG-B does not achieve the dramatic compliance extensions observed with LNG, combusting it in the main engine or in all ICEs offers a balanced approach, combining reasonable environmental benefits with acceptable economic implications, rendering it an important candidate option for retrofitting.

Engine operation with LPG-P (Table 8) exhibits slightly improved attributes compared to the LPG-B case; however, these are not significant, as in the case of LNG. Compared to the baseline scenario, with LPG-P used in auxiliary engines, 52.5% of the vessels achieve compliance until 2030, while 17.5% of the group achieves a maximum CII ranking of “C”. Improved compliance periods are evident for the case of burning in the main engine; 75% of the fleet achieves compliance up to 2030, with 47.5% of the vessels being ranked either as “C” or “B”. Significant improvements are exhibited when LPG-P is combusted in all ICES; 97.5% of the fleet survives until 2030, with 50% of the fleet achieving “C” and “B” rankings.

The fuel costs of each implementation case are, on average, lower than the baseline case by 2.3%, 6.1% and 8.3%. It is evident that the LPG-P cost reductions are similar to the LNG case and slightly lower than LPG-B. Consequently, the EU ETS costs are reduced compared to the conventional fuel case by a factor of 4.1% to 15.2%, depending on the implementation of the fuel. As in the case of LPG-B, propane LPG is a considerable solution for retrofitting bulk carriers, exhibiting moderate compliance period extensions and EU ETS cost reductions.

In Table 9, the summarized results for the case of using methanol are provided. Methanol demonstrates the least favorable performance among all the examined alternative fuels, showing limited improvements compared to either the LPG or LNG options. For the case of methanol in auxiliary engines, 52.5% of the fleet achieves CII compliance up to 2030, and only 10% of the vessels exhibit a CII ranking of “C”. If methanol is combusted in the main engine, 57.5% of the fleet achieves environmental compliance up to 2030, and 27.5% of the vessels exhibit the maximum operational efficiency of the fleet and a “C” ranking. During the implementation of methanol in both the main and auxiliary engines, 67.5% of the fleet achieves a compliance period extension up to 2030, while only 30% of the fleet achieves a CII ranking of “C”. The relatively modest compliance improvements reflect methanol’s higher carbon intensity compared to gaseous fuels despite its renewable production potential.

The economic implications of adopting methanol are significant, exhibiting substantially increased fuel costs compared to the baseline scenario, from 29% to 107%, depending on the implementation scenario. This pronounced cost increase stems from methanol’s lower energy density, requiring larger fuel volumes, combined with its current market pricing structure. The substantial fuel cost penalties correspond to only moderate decreases in the EU ETS costs, ranging from 2.7% to 10%, indicating an unfavorable cost–benefit ratio compared to other alternative fuel options.

Economic Evaluation

In this section, the economic Key Performance Indicator (KPI) of the payback period is evaluated for the implementation of each selected alternative fuel in both auxiliary and main engines in order to assess the economic impact of each retrofit option. The retrofit costs are assumed to be fixed across the 40-vessel fleet, and are approximated based on the literature values: USD 8,500,000 for LNG [7], USD 8,000,000 for both LPG options [50] and USD 6,000,000 for methanol [32]. To represent the annual vessel revenue, four daily freight levels are considered as follows: USD 14,000, 16,000, 18,000 and 20,000 for LNG, LPG-B and LPG-P, and USD 25,000, 28,000, 30,000 and 33,000 for methanol. The results are presented in Figure 13, showing the payback period values of 8, 10, 12 and 15 years. The payback period [years] is calculated by Equation (8):

$$\mathrm{P}\mathrm{B}\mathrm{P}={\displaystyle \frac{\mathrm{T}\mathrm{R}\mathrm{C}}{\mathrm{A}\mathrm{R}-\mathrm{T}\mathrm{F}\mathrm{C}-\mathrm{E}\mathrm{T}\mathrm{S}}}$$

(8)

In Equation (8), TRC is the total retrofit cost in USD, while the annual revenue (AR) [USD] is obtained by the product of daily freight over 175 sailing days, as shown in Equation (9). A 1.16 EUR to USD currency is used.

$$\mathrm{A}\mathrm{R}=\mathrm{D}\mathrm{a}\mathrm{i}\mathrm{l}\mathrm{y}\mathrm{f}\mathrm{r}\mathrm{e}\mathrm{i}\mathrm{g}\mathrm{h}\mathrm{t}·\mathrm{S}\mathrm{a}\mathrm{i}\mathrm{l}\mathrm{i}\mathrm{n}\mathrm{g}\mathrm{d}\mathrm{a}\mathrm{y}\mathrm{s}.$$

(9)

The analysis indicates that, under current fuel prices, anticipated fuel consumption, and emissions trading system (ETS) penalties, retrofitting vessels to alternative fuels results in only marginal annual profits per vessel. Achieving a reasonable payback period requires an increase in the daily freight rate. Specifically, for an average daily freight of USD 16,000, only 7.5% of the fleet would achieve a 10-year payback period, whereas 75% of the fleet would require 15 years of operation to recover the investment. If the daily freight is increased to USD 18,000, 30% of the fleet would recover the investment within 10 years; at USD 20,000 per day, 80% of the fleet would exhibit a positive return within the same period.

Slightly improved payback periods were observed for the LPG-B retrofits. At a daily freight of USD 16,000, 15% of the investments would be profitable within 10 years, while the corresponding percentages for daily freights of USD 18,000 and USD 20,000 rise to 55% and 85%, respectively. For the LPG-P retrofit, the 10-year payback percentages are 7.5%, 40% and 82.5% for the same freight levels.

In contrast, methanol retrofits require substantially higher daily freight rates to achieve profitability. To attain a 10-year payback period, the daily freight must reach at least USD 25,000 to allow only 2.5% of the fleet to break even. Even at a daily freight of USD 33,000, only 42.5% of the investments yield a positive return, underscoring the limited compatibility of bulk carrier operations with methanol fuel.

The financial viability of an investment is contingent upon the annual revenue of the vessel, which, in turn, is directly influenced by its operational profile. Optimizing the number of sailing days, minimizing idle periods, and reducing the duration of cargo operations and onboard fuel consumption may expedite the recovery of the initial investment.

Among the alternative fuel options evaluated, liquefied natural gas (LNG) emerges as the most advantageous solution in terms of both the compliance period extension under the Carbon Intensity Indicator (CII) and the cost reduction within the EU emissions trading system (EU ETS), particularly when fuel operational costs are taken into account. By comparison, butane LPG and propane LPG deliver moderate outcomes relative to LNG, yet they indicate potential for sustaining fleet reliability at least until 2030. Methanol, despite its status as the fuel with the lowest carbon content among those assessed, demonstrates the most conservative improvements in operational efficiency and EU ETS cost mitigation when applied to bulk carriers. These limited benefits are further constrained by methanol’s considerable operational fuel costs, which currently restrict its competitiveness.

Compliance with the CII and the EU ETS does not encompass the full spectrum of forthcoming regulatory obligations. While EU ETS penalties may represent a substantial proportion of a vessel’s annual income—reaching up to 34% of the freight value in certain scenarios, as presented in Section 3.1—this mechanism constitutes only one layer of an increasingly complex regulatory environment. Parallel frameworks, such as FuelEU Maritime, expand the scope of accountability by incorporating well-to-wake emissions, thus obligating shipowners to address the carbon footprint of fuel production. Under the forthcoming Global Fuel Standard (GFS), shipowners are likely to incur additional costs in the form of remedial units should the emission thresholds that are set be exceeded, thereby reinforcing the policy direction towards lower-carbon fuels and energy efficiency innovations. Consequently, the selection of an alternative fuel for retrofitting bulk carriers must be evaluated not only against the current compliance and operational criteria, but also with respect to evolving regulatory landscapes. While the fuels considered in this study provide meaningful emission reductions, they are ultimately positioned as transitional options within the broader trajectory towards a zero-carbon future. Given the accelerating regulatory stringency, their viability as standalone solutions beyond the 2040s is increasingly uncertain.

In practice, the adoption of alternative fuels can be complemented by energy efficiency measures, including wind-assisted propulsion, solar power installations, hybrid systems, hull and propeller optimization, energy harvesting devices and shipboard carbon capture technologies. These technical measures may increase the potential to significantly improve fleet sustainability when deployed in tandem with alternative fuels. Furthermore, operational strategies—including slow steaming, weather routing and enhanced voyage planning—can contribute to reducing carbon emissions and stabilizing compliance with future efficiency requirements. Ultimately, it is the integration of fuel, technological and operational solutions, rather than reliance on a single pathway, that will determine the long-term resilience of bulk carrier fleets.

In a multi-pathway future of net-zero emissions, coherent policymaking strategies will be essential to ensure a smooth and equitable transition towards carbon elimination. Guidance should be given on correlating the ship type to fuel type according to its operating regions. Financial incentives, such as tax exemptions, subsidies or preferential loan schemes, can support shipowners in retrofitting existing vessels or investing in new designs that are compatible with alternative fuels. Such measures would enhance the financial viability of investment projects and would assist in maintaining the commodities market price, which is directly related to the ship freight rates. Equally important is the development of alternative fuel infrastructure, which will enhance fuel availability and reduce the risks associated with early adoption. Additional measures should target energy providers, who must be incentivized to scale up green fuel production and secure reliable supply chains. Non-financial incentives can also play a significant role, including policies that prioritize low-emission vessels in port access, berth allocation or departure scheduling, thereby rewarding operational choices that align with decarbonization objectives.

4. Conclusions and Future Work

In this work, the effect on energy efficiency and environmental compliance of combusting LNG, LPG (propane and butane) and MeOH in ICE in medium-sized bulk carriers was investigated. A sample of the Handymax, Panamax and Supramax vessels with available operational data (their annual distances in nautical miles, fuel consumption in metric tons, and duration at sea, idle and at port) was used to determine which fuel pathway is suitable for maintaining fleet reliability. For each fuel, three implementation cases are considered as follows: combustion in auxiliary engines, combustion in the main engine and combustion in all ICEs. From the analysis, the following conclusions were drawn:

• End of compliance is delayed depending on the vessel’s year of build. This trivial observation highlights the importance and positive effect of the EEDI regulation on ship efficiency. This implies that the increase in energy efficiency is a multi-level parameter, combining design optimization not only with fuel consumption and power generation, but also with hull and propeller design. Ultimately, maximizing ship energy efficiency is a prerequisite to the effective adoption of alternative fuels and decarbonization.
• A dependency of end-of-compliance on the deadweight of the vessel is observed for Panamax/Supramax vessels, implying that the transportation carbon cost is reduced with an increasing vessel size. However, the results for the Handymax vessels were inconclusive, which is likely due to the limited sample size.
• LNG demonstrates superior performance among all alternative fuels and is capable of extending the compliance period. By implementing LNG at the main engines, or at all ICEs, 100% of the fleet achieves environmental compliance up to 2030, with 25% and 52.5% of the ships having achieved at least a ranking of “B”. The annual fuel costs are 2.2% to 8.2% lower than the baseline scenario of using conventional fuels, corresponding to a significant decrease in EU ETS costs between an increase of 6.6% to 24%. Based on the exhibited improvements, implementing LNG onboard is an attractive, compliance solution.
• LPG-B exhibited moderate improvements in the vessel compliance period and EU ETS costs when compared to LNG. The most significant effect of implementing LPG-B is observed when combusted in all ICEs, achieving compliance extensions up to 2030 for 87.5% of the fleet, with 35% of the ships being ranked at least “C”. Fuel costs compared to the baseline scenario are reduced by 3.3% to 12.1%, depending on the implementation scenario, with a resulting cut-down in EU ETS costs from 3.6% to 13.3%. These fuels represent a balanced approach for operators seeking environmental benefits with a minimal economic impact.
• Similarly with LPG-B, LPG-P offers an extension of the compliance period up to 2030 for 52.5% to 97.5% of the fleet, while 17.5% to 50% of the fleet completes their compliance period with at least moderate energy rankings. Fuel cost reductions compared to the baseline scenario range between 2.3% to 8.3%, corresponding to a reduction in EU ETS of 4.1% to 15.2%.
• Vessels using methanol exhibit the least favorable performance among all alternatives, despite the low-carbon content of MeOH; 52.5% to 67.5% of the fleet achieves a compliance period extension up to 2030, with 10% to 30% of the vessels achieving a ranking of “C” at maximum. The fuel costs are substantially increased and, depending on the implementation case, they range between 29.9% to 107%, with a conservative reduction in the EU ETS of 2.7% to 10%. The unfavorable cost–benefit ratio makes methanol the least attractive option under current market conditions.
• Payback period calculations were conducted for the case of implementing the selected fuels in all engines. The analysis demonstrates an inverse relationship between the average daily freight rate and the retrofit payback period; as the freight rates increase, the time required to recover the initial investment is reduced. Indicatively, to achieve a 10-year payback period for 50% of the fleet, the required average daily freight rates would be USD 20,000 for LNG and LPG-P, USD 18,000 for LPG-B, while for MeOH, it would have to exceed USD 33,000. These increases would directly affect the commodities’ market price. Reducing ship idle periods, duration of cargo operations or increasing the sailing days may improve the payback periods.
• The implementation scenario significantly affects performance outcomes, with the auxiliary engine applications providing minimal benefits, the main engine implementations yielding moderate improvements, and the combined main and auxiliary engine approaches delivering maximum compliance extensions across the selected fuels.
• When considering the retrofit of a bulk carrier to operate on alternative fuels, compliance with the CII regulation and the EU ETS should not be regarded as the vessel’s sole regulatory obligation. An assessment of sustainability must also account for the FuelEU and the forthcoming Global Fuel Standard (GFS), which precisely evaluate the vessel’s future GHG emissions profile on a well-to-wake basis. Therefore, the adoption of low-carbon fuels alone may prove insufficient; thus, combining them with energy efficiency technologies might enhance the vessel’s environmental performance.
• Carbon emissions can also be mitigated through the implementation of operational measures. Strategies such as slow steaming and weather routing have the potential to enhance vessel performance while reducing the overall fuel consumption. When applied in combination with alternative fuels, these practices may further improve efficiency and strengthen compliance with the regulatory requirements.
• A transition to net-zero emissions depends on effective policymaking. Financial incentives for investment, such as tax exemptions, subsidies and preferential financing, can reduce barriers to retrofitting and new vessel designs. Expanding alternative fuel infrastructure is essential to ensure availability and reduce adoption risks. Non-financial measures, including port access privileges or berth prioritization for low-emission vessels, may further assist in the acceleration of the transition to a zero-carbon footprint.

This work could serve as a decision-making tool for ship owners and operators to understand the benefits and economic implications of alternative fuels onboard Handymax and Panamax vessels. The results demonstrate that fuel pathway selection should be based on operators’ investment capacity, risk tolerance and long-term fleet strategy. Moreover, it provides insights into whether the implementation of alternative fuels on a global fleet scale would have beneficial impacts on shipping decarbonization efforts. This study reveals that while all alternative fuels offer environmental benefits, their economic viability varies significantly, with LNG providing the optimal balance between compliance improvements and cost implications.

This work focused on evaluating the environmental effects and economic implications of these fuels onboard Handymax and Panamax vessels when combusted in ICE. Fuel production carbon costs, energy efficiency technologies, zero-carbon fuels (such as ammonia and hydrogen) and detailed retrofit cost analyses were not included in this work and are intended as future expansions of this research beyond the bulk carrier classes.