Technology About Gas

LNG fuel and the shipping sector

 By Mike Scott
About gas

The impact of shipping on the environment is increasingly in the spotlight, both in terms of local air pollution and climate change. Mike Scott looks at the prospects for LNG to replace bunker fuel as the fuel of choice for the marine transportation sector and how to overcome the barriers that exist…

The environmental credentials of the global shipping industry are under increasing scrutiny thanks to the sector’s rapid growth in recent decades and the Heavy Fuel Oil (HFO) that ships traditionally use. “Maritime has long been used to disposing of what is left from the refining of crude oil,” says the Society for Gas as a Marine Fuel. Even though per metric ton mile, shipping is the cleanest form of transport, the industry moves so many goods around the world, and HFO—also known as bunker fuel—is so polluting compared to other fossil fuels, that the sector is one of the biggest contributors to greenhouse gas (GHG) emissions (about 3 percent of the global total), sulphur oxides (about 10 percent) and nitrogen oxides (about 15 percent), say industry sources. Shipping’s impact has led to a growing number of regulations such as Emissions Control Areas (ECAs) covering air quality around ports and recent agreements by the International Maritime Organization to curb GHG and sulphur emissions. And some of the world’s biggest companies, such as Volkswagen and Unilever, are demanding cleaner shipping for their goods as they seek to bolster their own green credentials.

One of the key weapons to tackle shipping’s impact is to switch from bunker fuel to Liquefied Natural Gas (LNG). In fact, LNG-fueled vessels emit almost no SOx (sulfur oxydes) and far fewer NOx (nitrogen oxydes) emissions and particulate matter relative to bunker fuel, and CO2 emissions are lower too. In addition, with a number of LNG projects due to come on stream between now and the end of the decade, in countries ranging from Australia to Israel, gas prices are likely to remain both low and stable, unlike oil prices.

LNG onshore plant with storage facilities

Another advantage is that using LNG does not require installation of extra process technology, such as expensive scrubbers. However, there are some barriers to increased LNG use, says SEALNG, an industry coalition created to accelerate the widespread adoption of LNG as a marine fuel. The group, whose members include Shell and Total, DNV, the Port of Rotterdam and OEM’s GE Marine, Wartsila and Mitsubishi, wants to break down the commercial obstacles to LNG becoming the global shipping fuel of choice. Some of these barriers include “LNG infrastructure and market maturity; the lack of understanding of LNG’s benefits among end users, investors and governments and civil society; higher capex levels for gas equipment such as LNG tanks and fragmented and uncertain regulation.”

Progress is being made—as of December 2016, there were 97 LNG-fueled vessels in service, 91 on order and 70 LNG-ready ships either in service or on order, says SEA/LNG. “We all need to do more to help break down the commercial barriers to LNG, particularly in the deep-sea shipping segment,” says Peter Keller, the group’s chairman. “The reality is that environmental stewardship is now an essential element of the maritime industry. How we collectively deal with this reality will set the stage for the industry for decades to come.”

SEE MORE: OBOR and the Future of the Energy Trade by Criselda Diala-McBride

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about the author
Mike Scott
Journalist. Environment, Sustainability, Climate Change, Investing, Energy, Supply Chain, Transport, Circular Economy, Stranded Assets, ESG, Smart Cities, Wealth Management, Family Offices, Asset Management, EU.