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Sea-LNG: Bio-LNG drop-in bunker fuels extend GHG compliance for green finance loans

Investors in ‘green fuels’ will be able to secure more favourable financing terms, boosted by bio-LNG as drop in bunker fuel compared to conventional fuels, said Chairman.
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SEA LNG Biofuel drop in

Global multi-sector industry coalition SEA-LNG on Thursday (25 February) said its latest analysis has determined for every 10% of bio-LNG dropped in and blended with liquified natural gas (LNG) as a marine fuel, a vessel can achieve two extra years’ compliance with the Annual Efficiency Ratio (AER) curve used to secure preferable funding under the Poseidon Principles.  

This extends the average seven-year additional competitive advantage for Poseidon Principle loans achieved with LNG alone. The analysis compares LNG plus bio-LNG from a zero-carbon, sustainable source with conventional vessel fuels such as HFO, VLSFO and MGO.  

Bio-LNG is fully compatible with existing LNG infrastructure and technologies and increasingly recognised as a sustainable fuel that can be ‘dropped in’ and blended with LNG. Therefore, it represents one of the most viable pathways to decarbonisation currently available to owners.

LNG fuel delivers greenhouse gas (GHG) reductions of up to 21% Well-to-Wake and up to 28% Tank-to-Wake. This means that LNG vessels perform well according to Poseidon Principles’ funding criteria, which were instigated by financial institutions to improve strategic decision-making and shape a better future for the shipping industry and society.

The Poseidon Principles measure progress towards these objectives using an AER scoring. This follows an ever-tightening decarbonisation trajectory index to 2050, requiring a vessel’s aggregate carbon emissions intensity to improve.  This measure is intended to align with and incentivise the IMO’s goals of reducing the total annual GHG emissions by at least 50% by 2050.

“As banks increasingly align with green finance principles, LNG offers benefits for emissions reduction and provides an ‘extended compliance runway’ for Poseidon Principle sustainability linked loans,” said John Hatley, SEA-LNG investment committee chairman.

“An investor preserves more favourable financing terms compared to conventional marine fuels such as HSFO, VLSFO, and MGO.  The use of bio-LNG as a drop-in fuel may extend this runway even further- an additional two years for every 10% dropped-in.  This means lower ship emissions now and a compliance extension that yields long term competitive advantage.”

A recent CE Delft study concludes that bio-LNG is a scalable solution for the maritime sector. Estimated sustainable global supplies potentially exceed the future energy demand of the global shipping fleet. It also showed that bio-LNG will likely be commercially competitive relative to other low- and zero-carbon fuels.

SEA-LNG noted this analysis is supported by a recent report by the IEA on the outlook for biogas and biomethane. The IEA report concludes that feedstocks available for sustainable production of biogas and biomethane are huge, but only a fraction of this potential is used today. 

For biomethane to realise its potential as a major zero-emissions energy carrier, policies should remove barriers to scaling and create a single, cross-border market for biomethane and bio-LNG. Policy will also play a key role in allocating biomass resources to the hardest to abate sectors such as shipping, heavy goods transportation, and aviation.

Bio-LNG has particular advantages when it is produced from domestic and agricultural waste.  The process can capture methane that would otherwise be vented into the atmosphere, resulting in a fuel that is not just zero GHG emissions but has the potential for negative emissions. 

By assisting with the reprocessing of waste materials, bio-LNG can support the circular economy and help abate yet another global concern; waste management. The potential GHG reduction benefits from capturing and reusing the global economy’s waste streams are significant and need to be considered in any serious discussion of alternative fuels. Ensuring a level playing field for assessing alternative fuel options will require Well-to-Wake analysis being implemented by regulators including the IMO.

“As GHG emissions are cumulative, the decarbonisation challenge only gets tougher the later we take steps to address it.  Waiting for options is not an option.  The Industry must act now using LNG and bio-LNG that we know provide benefits today and into the future,” added Peter Keller, Chairman of SEA-LNG.

“With the introduction of bio and synthetic variants, LNG not only provides a pathway to decarbonisation in its own right, but also provides the physical infrastructure and asset base that can be used by other alternative fuels, when and if they become commercially viable.” 

The analysis is based on a capesize bulk vessel, considering the main engine only (no auxiliaries) to provide a conservative estimate. If the auxiliary generator sets were included, the gains would slightly increase.

Related: SEA-LNG 2021 Outlook: LNG transitions from niche to mainstream marine fuel
Related: SEA-LNG Report: LNG – The only viable fuel


Photo credit: SEA-LNG
Published: 26 February, 2021

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Alternative Fuels

MPA and MSC ink MoU to support adoption of alternative bunker fuels

MPA and MSC will explore new routes and services to strengthen connectivity, support the adoption of alternative marine fuels such as bio-LNG, and advance technologies to improve vessel energy efficiency.
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MPA and MSC ink MoU to support adoption of alternative bunker fuels

The Maritime and Port Authority of Singapore (MPA) on Wednesday (3 June) said it signed a Memorandum of Understanding (MoU) with MSC Mediterranean Shipping Company to strengthen collaboration in maritime decarbonisation, digitalisation, innovation, and manpower development. 

The MoU was signed on 25 May 2026 by Mr Ang Wee Keong, Chief Executive of MPA, and Mr Soren Toft, Chief Executive Officer of MSC.

The MoU underscores the shared commitment of MPA and MSC to foster a sustainable, digital, and future-ready maritime sector, while enhancing MSC’s operational and business activities in Singapore. This year also marks the 30th anniversary of MSC establishing its Asia Regional Office and local office in Singapore.

Under the MoU, MPA and MSC will explore new routes and services to strengthen connectivity, support the adoption of alternative marine fuels such as bio-LNG, and advance technologies to improve vessel energy efficiency and operational performance.

MPA and MSC will also collaborate on maritime digitalisation initiatives to improve operational efficiency, including streamlining vessel arrivals and port operations. 

On manpower development, MSC will support internship and scholarship opportunities through Singapore Maritime Foundation’s Maritime Outreach Network (MaritimeONE) platform, an industry-led tripartite partnership comprising industry, government and institutes of higher learning that aims to raise awareness of the maritime industry and attract quality talent into the maritime sector.

Mr Ang Wee Keong, Chief Executive of MPA, said: “This partnership reflects the strong collaboration between MPA and MSC in driving sustainability and digitalisation in the maritime sector. By working together on decarbonisation, operational efficiency and talent development, we aim to strengthen Maritime Singapore’s position as a trusted and future-ready global maritime hub.”

Mr Soren Toft, Chief Executive Officer of MSC, said: “Singapore is a strategically important hub for MSC and a key gateway to the broader Asia region. As we mark 30 years in Singapore, this MOU reinforces our long-term commitment to strengthening our presence here. MSC and Singapore are closely aligned on the priorities shaping the future of global shipping, and we look forward to deepening this partnership to drive the continued growth and resilience of the maritime industry.”

 

Photo credit: Maritime and Port Authority of Singapore
Published: 4 June, 2026

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Alternative Fuels

Shipfinex: The green fleet transition has a financing problem

Capt. Vikas Pandey, Founder & CEO, Shipfinex argues green shipping progress is uneven: major carriers can finance alternative-fuel vessels, while smaller owners face capital constraints.
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June 4, 2026

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Shipfinex: The green fleet transition has a financing problem

By Capt. Vikas Pandey, Founder & CEO, Shipfinex

The numbers on alternative-fuel orders look encouraging. Seventy-two percent of newbuild capacity ordered in the first ten months of 2025 was for alternative-fuel vessels, with LNG dual-fuel accounting for 60% of that figure. More than 1,369 LNG dual-fuel vessels are now in operation or on order globally. By most measures, the transition appears to be happening.

Look at who is actually placing those orders. MSC. Hapag-Lloyd. CMA CGM. Carriers with balance sheets large enough to absorb the cost premium of alternative-fuel newbuilds and relationships with Chinese leasing companies that extend leverage ratios unavailable to most of the industry. The Strait of Hormuz disruption this March accelerated that activity further: LNG tanker charter rates spiked above $200,000 per day and carriers with deep pockets moved to lock in fuel flexibility. Meanwhile, for vessels under 6,000 TEU, orders for conventionally fuelled tonnage rose to 28% of capacity ordered in 2025, up from 19% the year before. That is not a story of broad commitment to green fuels. It is a story about who has access to capital.

An alternative-fuel newbuild costs materially more than a conventional equivalent. Methanol-ready designs, ammonia-ready structures, LNG dual-fuel systems, each carries a cost premium above the base vessel price. For an independent shipowner financing through a traditional bank, that gap is increasingly difficult to bridge. Top-40 bank lending to shipping fell from $454.9 billion in 2011 to $284.3 billion by end-2023. The Chinese leasing companies that absorbed part of that contraction are structurally oriented toward Chinese-built vessels under long-term contracts with tier-one counterparties. Independent bulk owners, mid-tier tanker operators, feeder container companies: they are working with a materially shrunken pool of willing lenders at precisely the moment they are being asked to upgrade their fleets.

This bifurcation deserves more attention from the marine fuels industry than it currently receives. Bunkering infrastructure investment follows demand signals. Alternative-fuel bunkering at secondary ports, methanol at regional hubs, LNG outside the major transhipment centres, requires a broader fleet base of alternative-fuel vessels to justify the investment. If green fuel adoption stays concentrated among a handful of majors rather than spreading across the independent owner fleet, the economics of scaling bunkering supply infrastructure outside the primary corridors remain thin.

Capital market structure and marine fuel adoption are connected, and pretending otherwise slows both. Digital instruments representing economic exposure to vessel-owning Special Purpose Vehicles, structured within regulated frameworks like VARA in Dubai, can extend the base of capital available to shipowners below the tier-one threshold. That capital base does not replace bank lending. It reaches operators that bank lending currently does not.

The Hormuz disruption reminded the industry that fuel supply chains carry geopolitical risk. The financing gap raises a quieter but equally structural point: the demand side of the green fuel equation depends on shipowners being able to afford the vessels that create that demand. Alternative-fuel bunkering infrastructure will scale when the fleet ordering those vessels does. Right now, that fleet is smaller than the order book numbers suggest.

About the Author

Vikas Pandey is a Master Mariner with decades at sea across various vessel categories. He is Founder and CEO of Shipfinex FZCO, a maritime asset tokenization platform operating under VARA In-Principle Approval (IPA/26/01/002) in Dubai and registered as a Virtual Asset Service Provider in Poland.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a solicitation to buy or sell any financial instrument or virtual asset. Maritime Asset Tokens are virtual assets; values may decline materially below purchase price. VARA In-Principle Approval does not constitute a final licence.

Linkedin: https://ae.linkedin.com/in/capt-vikaspandey
Website: https://www.shipfinex.com/

 

Photo credit: Shipfinex
Published: 4 June, 2026

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Alternative Fuels

Report: MSC Cruises ships operated on over 9,800 mt of bio-LNG and biofuels in 2025

MSC Group’s Cruise Division used 9,839 mt of renewable marine fuels in 2025 across its fleet, according to its 2025 Sustainability Report published last week.

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June 3, 2026

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Report: MSC Cruises ships operated on over 9,800 mt of bio-LNG and biofuels in 2025

MSC Group’s Cruise Division used 9,839 metric tonnes (mt) of renewable fuels in 2025 across its fleet, according to its 2025 Sustainability Report published last week. 

The company used a combination of bio-LNG and biofuels across its fleet, resulting in emissions reduction of 48,714 mtCO2e compared to equivalent fossil fuels. 

Based on the Energy Transition Plan, the report showed that MSC Cruises and Explora Journeys remain on track to achieve net-zero greenhouse gas (GHG) emissions for marine operations by 2050. In 2025, MSC Group’s Cruise Division achieved the International Maritime Organization’s (IMO) 2030 carbon intensity reduction target five years ahead of schedule. 

The report said the MSC Cruises demonstrated a net-zero voyage using biomethane was possible with the launch of MSC Euribia in 2023. 

Since then it has actively engaged with fuel producers and suppliers to secure affordable high quality renewable fuels and in 2026, it began blending them into its operations at scale. 

The bio-LNG it sourced in 2025 was produced from a variety of different sustainable feedstocks, including food waste, sewage sludge, organic municipal waste and, most notably, manure. 

As most of its fleet remains conventionally powered, biodiesel represents the only drop-in solution available for these vessels today. 

In 2025, MSC Europa ran on a total of 6,856 mt of bio-LNG while MSC Opera used 1,727 mt of hydrotreated vegetable oil (HVO). MSC Seaview sailed using 572 mt of HVO and 684 mt of a B24-VLSFO blend. 

 

Photo credit: MSC Cruises
Published: 3 June, 2026

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