India’s Green Bunkering Ambition Runs into a Price Problem

India has the coastline, the refinery base and the cargo traffic to become a serious alternative marine-fuel hub. What it does not yet have is a commercial case that convinces a ship operator to buy fuel here rather than in Singapore — and a new study puts a number on the gap.

A DNV study prepared for the International Maritime Organization’s GreenVoyage2050 programme, titled Study on Potential Demand and Pricing of Alternative Marine Fuels in India, finds meaningful long-term demand potential but warns that delivered cost and port-call economics, not production economics, will decide whether Indian ports win that trade.

The Scale Gap: 2.25 Million Tonnes Against 54.92 Million

Indian ports recorded roughly 2.25 million tonnes of marine fuel sales in 2024. Singapore, the region’s dominant bunkering centre, sold 54.92 million tonnes over the same period.

That is not a modest shortfall — it is a structural difference in market depth, and it explains why the study’s roadmap begins narrowly rather than nationally. The projected demand for alternative fuels at Indian ports is 42–65 petajoules by 2035 and 113–293 petajoules by 2047, depending on the scenario. Because petajoules measure energy rather than weight, the volumes translate into materially different tonnages across methanol, ammonia and biofuel blends — which is precisely why port planners cannot size storage and bunker-vessel fleets off a single headline number.

Demand Follows Cargo, Not Geography

The study’s most commercially useful insight is about customer behaviour: ships do not detour to refuel. India’s position on East-West routes creates visibility, not guaranteed volumes.

The dependable first market is vessels already calling at Indian ports — scheduled container services above all, which arrive on predictable rotations with known consumption profiles. That gives fuel suppliers a bankable offtake base instead of a speculative one.

Four gateways are named for initial investment: Mundra, Jawaharlal Nehru Port, Chennai and Tuticorin, connected where practical to fuel-production clusters. The recommended fuel sequence starts with methanol at a potential Mundra pilot, drawing supply from Deendayal (Kandla), with ammonia readiness built in for a later phase once safety and handling systems mature.

The $545 Versus $353 Problem

The study’s cost comparison is the part shipowners and charterers will read first. Conventional heavy fuel oil is modelled at roughly US545pertonneatIndianports,againstUS353 in Singapore. Indicative port-call fees are also markedly higher on the Indian side.

Those are current conventional-fuel conditions, not green-fuel forecasts — but they set the hurdle. In two modelled container-voyage cases, India needed delivered bio-methanol priced about 5.5% below a competing location, or e-ammonia about 7% below, to make a bunkering call here the rational choice.

Metric	India	Singapore
Marine fuel sales, 2024	~2.25 million tonnes	54.92 million tonnes
Conventional HFO, modelled	~US$545/tonne	~US$353/tonne
Port-call fees	Higher, indicatively	Lower benchmark
Alternative fuel demand, 2035	42–65 PJ	—

For a shipowner, the calculation runs well beyond the fuel invoice: delivered price plus port dues plus marine services plus waiting time plus schedule risk. A port that wins on plant-gate cost but loses on turnaround still loses the stem. That is the crux of the competitiveness warning.

Three-Phase Roadmap and the Barriers Behind It

The proposed sequencing is deliberately incremental:

• 2026–2030: Establish safe, repeatable methanol bunkering at selected ports, with the Mundra pilot as the anchor.
• 2030–2035: Expand only where demand is demonstrated, share storage and delivery capacity across port clusters, and develop port-specific ammonia safety procedures.
• 2035–2047: Build multi-fuel capability at commercially viable hubs and link them into green shipping corridors.

Even the first stage faces friction. Limited dedicated bunker vessels, fragmented approvals across agencies, and fuel-specific safety requirements all sit between the plan and an operating service. None of these is solved by a demand forecast.

The study also frames the policy asks plainly: clear approval and safety procedures, transparent port charges, defined training requirements, and a review of how taxation feeds through to delivered fuel price. Those are the levers that move the $545 line.

What the Finance Side Should Watch

For lenders and investors, this is a sequencing question before it is a technology question. The study effectively argues for concentrating capital at four gateways instead of distributing it across the coastline — which is a better proposition for project finance but a harder one politically.

The gaps that need bankable structures are specific: bunker vessel acquisitions, methanol and ammonia storage tanks, port-side safety retrofits, and working capital for suppliers holding inventory against uncertain offtake. Each has a different risk profile, and blending them into a single port modernisation budget is how projects stall.

Both regulatory push and pull matter here. European carbon pricing on voyages and the container industry’s own decarbonisation targets are creating real willingness to pay for low-carbon bunkers, but that willingness is concentrated on specific trade lanes — exactly the lanes where a Mundra or JNPA call could be tested. The commercial test for India’s developing National Green Shipping Policy, as the study frames it, is simple: can Indian ports supply fuel that operators choose on price, reliability and turnaround?

Frequently Asked Questions

1. Who prepared the study on alternative marine fuels in India?
Maritime advisory firm DNV prepared it for the International Maritime Organization’s GreenVoyage2050 programme. It assesses potential demand for alternative marine fuels at Indian ports and the pricing needed to make bunkering competitive.

2. How much alternative marine fuel demand could Indian ports see?
The study projects 42–65 petajoules by 2035 and 113–293 petajoules by 2047 depending on scenario. Petajoules measure energy content, so tonne-based equivalents vary by fuel type.

3. Which Indian ports are recommended for the first green bunkering investments?
Mundra, Jawaharlal Nehru Port, Chennai and Tuticorin, linked where practical to fuel-production hubs. The first pilot is proposed for methanol at Mundra, with supply from Deendayal (Kandla).

4. Why is Indian bunkering uncompetitive against Singapore today?
Modelled conventional heavy fuel oil is about US545pertonneatIndianportsversusUS353 in Singapore, and port-call fees are indicatively higher. To attract vessels, delivered bio-methanol would need to be roughly 5.5% cheaper than an alternative port, or e-ammonia about 7% cheaper.

5. Which ships are the most realistic first customers for green bunkering in India?
Vessels are already calling at Indian ports to load or discharge cargo, especially scheduled container ships. Ships passing nearby are unlikely to divert purely to refuel, so demand must be built on existing port rotations.