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Methane Slip Becomes a Cost Line as EU Pricing Hits LNG Fleet

EU ETS has priced methane from ships since 1 January 2026, and measured slip of 6.4% on common engines is double the EU's 3.1% default — a compliance problem for 1,550 LNG-fuelled ships.

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Marcus Bennett
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Shipping’s LNG Boom Faces a Methane Problem
Shipping’s LNG Boom Faces a Methane ProblemAI-generated

Key points05

  • LNG-fuelled fleet in service and on order exceeds 1,550 ships, up from 81 in 2016 (SEA-LNG 2026 mid-year review).
  • FUMES measured real-world methane slip of 6.4% on low-pressure dual-fuel four-stroke engines — double FuelEU's 3.1% default.
  • Since 1 January 2026, EU ETS covers methane and nitrous oxide, with 100% of in-scope emissions now chargeable.
  • NEDO-backed sea trials on bulk carrier Reimei cut methane slip 98% at ~75% load, verified by ClassNK; commercial availability targeted 2027.
  • MSC Cruises verified slip of 1.48–1.67% on two ships via Bureau Veritas, well below the FuelEU default.

Since 1 January 2026, the EU Emissions Trading System covers methane and nitrous oxide from ships, not just CO2 — and with the phase-in now over, operators surrender allowances for 100% of verified in-scope emissions. For a fleet of more than 1,550 LNG-fuelled ships in service and on order, the unburned methane leaving the funnel is now a line on the invoice.

The orderbook shows no retreat. DNV data cited in SEA-LNG's 2026 mid-year review counts 73 LNG dual-fuel vessels ordered in the first half of 2026 — roughly 90% of all alternative-fuel orders — with August alone adding 46 more, driven by container ships and car carriers. When SEA-LNG was founded in 2016, the LNG-fuelled fleet stood at 81 ships.

Why does the 3.1% default matter so much?

FuelEU Maritime already counts methane slip in its greenhouse gas intensity calculation, using a default value of 3.1% of fuel consumed for uncertified engines. That figure is multiplied across every tonne of LNG burned on EU-related voyages. The awkward question is whether it reflects reality.

The best independent evidence says it does not. The FUMES project, published in January 2024 by the International Council on Clean Transportation with Explicit and TNO, measured exhaust plumes from 18 LNG-fuelled ships using drones, helicopters and onboard stack measurements. For low-pressure dual-fuel four-stroke engines — the workhorse of the LNG fleet — average real-world slip came out at 6.4%. That is roughly double the EU assumption and well above the IMO's 3.5%. Slip was worst at low engine loads, exactly where many ships spend most of their operating hours. The ICCT recommended regulators raise the default for this engine class to at least 6%.

Can owners beat the default with measured data?

Some already have. In May 2026, MSC Cruises became the first cruise line to secure independent verification and flag state recognition of measured methane slip for FuelEU purposes. Bureau Veritas verified values of 1.67% on MSC World Europa and 1.48% on MSC Euribia — both well under the default. The campaign followed IMO Resolution MEPC.402(83), which sets the reference measurement method.

Engine makers point the same direction. Wärtsilä reports weighted average slip of about 0.9% for four-stroke engines fitted with its NextDF technology, and says slip from its dual-fuel engines has fallen 75% over 25 years. The lesson: methane slip is not a single number. It varies by engine design, age, load profile and operation. A default factor understates the climate impact of the worst performers and overstates the compliance cost of the best. Measurement has to come before abatement.

What abatement technology is actually proven at sea?

Since September 2022, Lloyd's Register's Safetytech Accelerator has run the Methane Abatement in Maritime Innovation Initiative (MAMII), backed at launch by Maran Gas Maritime, MSC, Carnival Corporation, Seaspan, Shell, Knutsen and Lloyd's Register. Its first feasibility round, reported in 2024, selected four companies from twenty applicants:

  • CDTi Advanced Materials — passive oxidation catalysts, reporting 80% methane conversion at lower temperatures
  • Daphne Technology — plasma-catalysis unit in the exhaust, assuming 80% removal
  • Plenesys — plasma torches cracking methane into hydrogen and solid carbon, reporting a 78% cut in slip
  • Rotoboost — thermo-catalytic decomposition producing hydrogen as a drop-in blend with LNG

A second round, reported in January 2025 with Chevron, Carnival, Shell and Seapeak, targeted fugitive methane between bunker manifold and engine. Xplorobot assessed handheld devices and an AI platform with accuracy around 30% for larger leaks and about 50% for smaller ones; Sorama scoped acoustic cameras for a six-month pilot rather than reporting one.

The strongest proof point so far is Japanese. A NEDO-funded project involving Kanadevia, Yanmar Power Technology and Mitsui O.S.K. Lines fitted a methane oxidation catalyst with exhaust gas recirculation to the Panamax bulk carrier Reimei. Sea trials began in May 2025; at around 75% engine load the system cut methane slip by 98%, verified by ClassNK. Land tests in December 2023 had recorded 93.8% at full load. Trials continue through 2026, with commercial availability targeted from 2027.

At MAMII's first members' event in Brussels in late November 2025, participants heard several engine types had already cut slip by 60% to 70% in recent years, with aftertreatment able to deliver a further 80% to 90%. Shell's in-house methane catalyst was due to begin shipboard trials in December 2025, with commercial readiness possible as soon as 2027.

What changes for owners and operators?

Gaps remain. Too few pilots use common measurement methods, too little verified data reaches the public domain, and fugitive emissions from bunkering and floating regasification get far less attention than the funnel. VTT research from 2021 found methane oxidation catalysts on lean-burn engines are highly sensitive to sulphur poisoning, with efficiency falling over time unless regenerated daily — an argument for proving systems at sea, not against catalysts themselves.

The regulatory calendar tightens the screw. MEPC 85 runs from 30 November to 3 December 2026, with the resumed extraordinary session deciding on adoption of the IMO Net-Zero Framework scheduled for 4 December. Europe already prices methane, and the global framework under negotiation is built on well-to-wake greenhouse gas intensity. A ship that can prove low slip earns a lower compliance bill; one that cannot will carry the default — or worse, if defaults are revised upwards as the ICCT has urged.

Source: gCaptain

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Marcus Bennett

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Senior reporter covering regulation, policy and their impact on Ocean and air freight, container shipping at Waybill Wire.

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