Onwards: Alternative Fuels for Philippine Shipping – Challenges and Pathways Forward
By Karl Garcia
The maritime sector is central to the Philippines’ economy. As an archipelagic nation with over 7,000 islands, shipping connects communities, supports trade, and sustains livelihoods. The Philippines is also a global leader in supplying seafarers to international shipping companies. Yet, despite this strategic advantage, the country’s domestic shipping industry heavily depends on conventional fuels such as heavy fuel oil (HFO), marine diesel oil (MDO), and marine gas oil (MGO). These carbon-intensive fuels contribute to greenhouse gas emissions, air pollution, and the nation’s environmental footprint. As international maritime regulations tighten and climate change concerns mount, alternative fuels present both a challenge and an opportunity for Philippine shipping.
Current Situation
The Philippine fleet comprises cargo vessels, container ships, passenger ferries, and offshore support vessels. Most of these rely on conventional fuels, and retrofitting or replacing them with cleaner alternatives remains limited. Regulatory oversight comes from the Maritime Industry Authority (MARINA), the Philippine Ports Authority (PPA), and the Department of Energy (DOE). While the International Maritime Organization’s (IMO) 2020 sulfur cap and decarbonization targets guide global shipping, domestic incentives for alternative fuels remain sparse. There is no comprehensive national roadmap for green shipping, and adoption has been piecemeal, largely constrained by cost and infrastructure.
Several alternative fuel options are available for ships: liquefied natural gas (LNG), biofuels, hydrogen, ammonia, and battery-electric systems. LNG offers reduced sulfur and particulate emissions compared to HFO and diesel, but it requires new engine technology and bunkering infrastructure. Biofuels, potentially sourced from coconut, palm, or algae, are renewable and compatible with some existing engines, yet production at scale remains limited. Hydrogen and ammonia are zero-carbon options, but technical, storage, and safety challenges, as well as high capital costs, have slowed adoption. Electric and hybrid propulsion can work for short inter-island ferries but are constrained by battery technology and grid limitations.
Challenges and Hurdles
The adoption of alternative fuels in Philippine shipping faces multiple obstacles:
- Infrastructure Limitations: The country lacks LNG bunkering facilities and sufficient biofuel supply chains. Hydrogen and ammonia storage systems are practically nonexistent, and large-scale electrification of ferries is limited by inadequate port charging infrastructure and grid capacity.
- Economic Barriers: Retrofits and newbuilds using alternative fuels are expensive. Alternative fuels are currently more costly than conventional fuels, and there are no significant government subsidies or incentives to offset this difference. Financial constraints make it difficult for smaller domestic shipowners to invest in green technology.
- Regulatory and Policy Gaps: There is no unified national decarbonization plan for shipping, and coordination among MARINA, DOE, and PPA is fragmented. IMO-aligned emission reduction targets are not consistently implemented, creating uncertainty for shipowners.
- Technical and Human Resource Constraints: Training for crews on alternative fuel operations is limited. Shipyards have minimal experience in constructing or retrofitting vessels for LNG, hydrogen, ammonia, or battery-electric systems, creating a skills gap in domestic shipbuilding.
- Supply Chain and Energy Security Risks: Dependence on imported LNG or hydrogen introduces vulnerabilities. Domestic biofuel production is limited and can be affected by climate events, such as typhoons, or market fluctuations.
Potential Solutions and Pathways Forward
Despite these challenges, the Philippines has strategic advantages: a strong maritime workforce, growing domestic shipping needs, and access to renewable feedstocks such as coconut and algae. A coordinated, phased approach can help the country adopt alternative fuels while minimizing economic and technical risks.
- Infrastructure Development: Establish LNG and biofuel bunkering hubs in major ports like Manila, Cebu, and Davao. Pilot hydrogen and ammonia terminals can support experimental vessels, while battery-electric charging stations can be deployed for inter-island ferries.
- Policy and Regulatory Measures: Develop a national Green Shipping Roadmap aligned with IMO decarbonization targets. Offer tax incentives, subsidies, or carbon credits to encourage investment in alternative fuel technologies. Introduce a phased mandate for fleet emission reductions to guide shipowners.
- Financial Support and Economic Instruments: Provide green financing options, such as low-interest loans or public-private partnerships, for shipowners investing in alternative fuels. Encourage shipping alliances to pool resources for infrastructure development. Support domestic biofuel production with guaranteed government offtake to stabilize supply and incentivize investment.
- Technical Capacity Building: Implement MARINA-accredited training programs for crews and engineers on alternative fuel operations. Modernize shipyards to handle LNG, biofuel, hydrogen, and ammonia retrofits. Leverage international partnerships with countries like Japan, Norway, and Singapore to transfer expertise and technology.
- Phased Implementation: Short-term (1–5 years) measures include electrifying ferries on short routes and piloting biofuel blends. Medium-term (5–10 years) initiatives focus on introducing LNG-powered cargo vessels and establishing bunkering infrastructure. Long-term (10–20 years) goals involve adopting hydrogen and ammonia vessels to fully decarbonize the domestic fleet.
- International Cooperation: Collaborate with global partners for technical expertise and financing. Tap into climate funds, such as the Green Climate Fund (GCF), for investment in green shipping. Learn from the experiences of Singapore and South Korea, which have successfully implemented green shipping programs.
Conclusion
The Philippines stands at a critical juncture in its maritime history. While the challenges to adopting alternative fuels are significant—spanning infrastructure, cost, regulation, and technical capacity—the potential rewards are transformative. Through a coordinated approach that combines infrastructure development, regulatory incentives, financial support, and human capital development, the Philippines can reduce maritime emissions, improve energy security, and maintain global competitiveness. By embracing alternative fuels, the country can turn its maritime sector into a model of sustainable and resilient shipping in Southeast Asia, safeguarding both the environment and the future of its seafaring communities.
The Society of Honor by Joe America 
I haven’t been in this industry for about 2 decades but here are some thoughts and unfortunate truths:
• Biofuel and “green hydrocarbon” fuels have higher production input costs and are only viable if the biofuel industry is heavily subsidized. In the US and Europe the biofuel industry is captured by Big Ag interests as an outlet for their excess crop. The higher production input costs mean that using biofuels can be in most cases just as environmentally destructive as using traditional hydrocarbon-based energy.
• Vast percentage of excess emissions (i.e. Emissions that do not have an attached productive result like propelling the vessel) are emitted from idling engines while in port or at sea. This can be mitigated somewhat with auxiliary power being provided by port hookup (to the electrical grid) and/or by using electric auxiliary power backed by onboard battery storage.
• Dual-fuel and Tri-fuel turbines can provide flexibility but unless expensive high-compression turbines are used for propulsion, most multi-fuel turbines are less efficient (20-30% or more depending on the situation) when using secondary and tertiary fuel types. Marine diesel has much higher energy density than LNG, for example.
• Improper LNG storage and low-efficiency turbines encounter “methane slip,” releasing methane, a much more potent greenhouse gas, into the atmosphere.
• Introducing LNG requires LNG terminals and LNG storage tank capacity. AFAIK the Philippines only has two relatively old, relatively low-capacity LNG facilities in Batangas. Hydrogen requires even more compression and refrigeration than LNG.
• Simply re-engining may raise efficiency somewhat for existing vessels, but often the limitation is the vessel’s hull form itself. A vessel’s hull cannot be changed; requires building a completely new vessel that considers an efficient hull form paired with efficient propulsion.
• Electric propulsion does not make sense unless: 1.) the vessel has sufficient battery storage for the voyage, with reserve 2.) high-voltage DC-to-DC port hookup infrastructure is introduced for rapidly charging ships’ batteries upon docking.
• Private enterprise works on a cost-benefit calculus. Until there are new benefits that outweigh projected costs, do not expect private business to upgrade anything. No amount of aspirational government roadmaps and plans will help with that until the plan is translated into actionable plans. Many ways to do this: build government-subsidized infrastructure, increase the cost of doing business the “old way” through reduced subsidies or increased taxes on dirty technologies, access to low-interest government-backed loans to upgrade equipment, and so on.
I do recall a summer afternoon conversation of about two decades ago, rich old men flexing at an outdoor beer garden near Munich’s Isar river about their yachts, and I was surprised at what gas guzzlers even small ships are, their fuel needs going into the hundreds or was it thousands of liters of fuel..
..and a German newspaper article I also read maybe a decade ago about how big ships basically run on extremely dirty fuel on high seas – probably also for reasons of cost, they aren’t allowed to burn that dirty fuel near the shore though.
Re biofuel, coal and oil are essentially prehistoric biofuel.
Fossil fuels will not YET go away.Even I donesia who keep on announcing they will go renewable or altwrnative only to show that they are for fossils.
“We are a plague on the Earth. It’s coming home to roost over the next 50 years or so.” – Sir David Attenborough, 2013
Attempts
For renewable for now seems challenging.
You still need magnets, cobalt, different metsls and minerals
Now as to alternative fuels for now it is still expensive.
I believe the worst violator of the environment is the United States. We have not responded responsibly enough in proportion to the degree of our violation. Bad form! Trump set us back even further. Super bad form!
Top 3 Share of world CO2 emissions:
1.) 32.88% – China – 12,667,428,430 tons CO2/year
2.) 12.60% – US – 4,853,780,240 tons CO2/year
3.) 6.99% – India – 2,693,034,100 tons CO2/year
https://www.worldometers.info/co2-emissions/co2-emissions-by-country/
Indeed for decades we likely led the world in CO2 emissions. Now we are “only” number 2. We have never done enough to change the trend, even though we could afford to, unlike many other countries like the Philippines as Karl points out.
Trump stripped subsidies for electric vehicles and gave subsidies to the oil and gas industry! “Drill, baby, drill!” What a dope. We pulled out of the Paris Agreement, etc. etc.
We have amazingly unenlightened leadership here in the US…and not just Trump.
Need to be honest here — the PHEV/BEV subsidies were a compromise between Congress and the auto industry and only made such vehicles “affordable” for people who could already afford it. Unlike Europe, Japan, South Korea, China or Vietnam, the trend in the US auto market has been for manufacturers to push more expensive and bigger vehicles. I don’t know any American on the lower wage side that can even hope to own PHEV/BEV, both categories which now start around $30k and easily push into $40k, $50k and beyond. My year old daily driver is a PHEV and it cost $45k, when the previous model which I also owned cost only $30k in 2019. In order to get people with old, inefficient cars into cleaner vehicles, policy needs to prefer smaller, more efficient vehicles. And that policy lacking combined with consumer preferences going in the opposite direction existed well before Trump, before Biden, before even Obama. The electric vehicle subsidies have always been basically a free money voucher for people who can afford it, as until the last 2 years of the program when the IRA changed the tax rebate to fully refundable one needed to earn gross around $50k/year to even avail the entire tax rebate.
Anyway, yes, China currently has cumulatively emitted slightly less than the US. But the growth curve is exponentially sharper, and in much less time. China will surpass and probably surpass by far the US cumulative emissions in the next few years. The recklessness of industrial pollution in China which I’ve observed directly makes the pre-EPA US look like a pristine wonderland.
Also Paris Agreement was not a binding agreement. It was a list of unenforceable “it’d be nice if we all did this.” It was up to each country to make its own environmental laws and enforce itself. AFAIK every country that is a member of the Paris Agreement, aside from the sinking Pacific atoll nations, never even made an effort to make even minimal progress towards the goals. China was the worse offender.
I aaked you I think that Clinton made China the rare earths refinery powerhoyse eothput him knowing it, unintended consequences?
But he was doing it for the envronment, it sounded like a good idea at the time?
If manufacturing was not offshored US could still be numbet one CO2.
we will see if Cjinese carbon cspture green fdnce us nothing but green washing.
I don’t think Clinton purposefully made China the world’s rare earth’s export leader, which he is often blamed for much later. The reality is often more complicated than simplistic political attacks which the Republican Party in the US is quite good at. In the 1990s with regard to extraction-refining industries generally (including petroleum to a lesser degree):
1.) The environmentalists under Ralph Nader were very strong and through lawsuits blocked most new industrial activity. This was explained in the Fukuyama clip I linked a few days ago. Nader, a perennial presidential candidate, later cost the Democratic Party the 2000 election and changed the course of American history for the worse. The environmentalists in the US started out as well-meaning affluent White people but were quickly co-opted by the Soviets during the Cold War, much like the Green Parties of Europe. Big difference is European Green parties moderated while the US Green Party has remained militantly anti-US from the far left, anti-progress, and ironically caused the political direction to go anti-environment.
2.) People in general, Americans included, do not like living near dirty industrial activity.
3.) The mainstream American political consensus of both Democrats and Republicans is that it was political less costly to export dirty, low-value work to other countries while the US focused on high-value creation.
4.) Rare earths at the time mostly went into magnets for industrial applications and were not as critically important as rare earths are now, so offshoring the industry seemed logical.
What changed between the 1990s and now is that as semiconductors approach the apex of Moore’s Law, semiconductors and supporting electronics require much more of various rare earths to stabilize the electrical signaling and minimize voltage leakage. Lithium-ion batteries were not a thing back then; Nickel-cadmium and nickel-metal hydride batteries were still on the “cutting edge” of rechargeable battery technology. While there was early effort in BEVs like the Chevrolet EV1, nickel-metal hydride battery chemistry had low electric range combined with heavy weight cost of the battery (low energy storage density). The EV1 lasted barely a few years on the consumer market.
When we talk about whether or not it was a good idea for Nixon to go to China in 1972, or for China to accede to the WTO in 2001, well that is another issue altogether — the limitation of American idealism. Btw China acceding to the WTO was not “Clinton’s fault” as my former party loves to say, because every President since Reagan supported it, including 3 Republican Presidents. The WTO negotiations with China started in 1986 and was initiated by Reagan. American Idealism is an expression of the inherent goodness of America, and the positive hope that through friendship (including trade), dialogue and ideas can be spread that will lead to democratization. American Idealism informed engagement with both China and Russia after the Cold War, and partially informed the nebulous nation building goals in Afghanistan and Iraq. The thought was that spreading American ideals worked out well in post-War Japan, West Germany, South Korea, and to an extent the Philippines, so why wouldn’t it work elsewhere? Well obviously now Americans are starting to realize that dialogue doesn’t work with countries like China, Russia, Iran, North Korea whose leadership class hates the US, or where the civic society is too weak like in Iraq and Afghanistan. Elsewhere there were missed chances with smaller countries like in Eastern Europe and Southeast Asia, whose governments were leaning towards the US after the Cold War concluded, or like Vietnam whose government is officially communist but in practice ambivalent towards communism as an economic-political theory.
Anyway the US is still a manufacturing powerhouse. The US just makes high-value goods and does not make basic goods. Most of the world’s IP still comes from the US. The US is encountering a period of instability at the moment, but historians have noted that this current moment isn’t even the worst societal crisis the US had encountered before. Unlike the Philippines which has had five official republicans, the US while not having official republican periods has had periods of history that historians define as the First Republic (1787-1868), Second Republic (1863-1933), Third Republic (1933-present). Out of the current chaos the Fourth American Republic will be born, and I suspect that in the 2060s at the midpoint of the future American republican period the US will probably still be the leading world power, the PRC would’ve collapsed back into regional states, the Russian Federation would’ve broken up into minor ethnic republics, the EU will be more or less the same and fine, and the US once again will have the last laugh.