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Clean, Available and
Cost-Effective: Why LNG is Emerging as a Viable Marine Fuel
The marine industry has long relied on conventional bunker fuels like heavy
fuel oil and marine diesel to power ships. However, these fuels are both costly
and environmentally damaging due to their high sulfur content. Rising
regulations and the need for sustainability have put pressure on ship owners
and operators to look for cleaner alternatives. Liquefied natural gas, with its
low emissions and competitive pricing, has emerged as one of the most promising
options.
LNG as a Bunker Fuel Growing Regulations
The International Maritime Organization’s regulations have progressively
tightened permissible sulfur emission levels from marine fuels. The global
sulfur cap was reduced from 3.5% to 0.5% starting January 2020 under MARPOL
Annex VI. Several coastal regions and emission control areas have even stricter
sulfur oxide (SOx) limits in place. Compliance traditionally meant using more
expensive low-sulfur fuel oil or installing scrubbers. However, a shift to LNG
significantly cuts both sulfur and particulate emissions without the need for
expensive add-on equipment.
LNG
As Bunker Fuel
produces almost zero SOx emissions and particulate matter compared to conventional
marine fuels. It also reduces nitrogen oxide (NOx) emissions by 85% based on
engine type. With four major revisions in a decade, IMO regulations have
incentivized a search for compliant and efficient fuel alternatives. LNG stands
out due to its inherent environmental benefits meeting both current and
anticipated emission norms.
LNG as a Bunker Fuel Cost
Competitiveness
Apart from its strong environmental performance, LNG is also gaining
recognition as a cost-competitive marine fuel option. At current oil prices,
LNG delivered energy-equivalent fuel costs are estimated to be 15-30% lower
than compliant low-sulfur fuel oil. Retrofitting vessels to run on LNG also
requires capital investments, but life cycle economics are estimated to break
even within 3-5 years of operations.
LNG costs have also come down considerably in recent years driven by the shale
gas revolution. With new liquefaction capacities continually coming online,
availability and global supply chains for LNG as a marine fuel are simplifying
logistics. Major classification bodies like DNV GL have approved the use of LNG
as fuel across vessel types through extensive testing and guidelines. Overall,
the total cost of ownership is becoming increasingly favorable for LNG-powered
ships.
LNG as a Bunker Fuel Availability of
Infrastructure
The availability of LNG bunkering infrastructure also continues to grow
significantly. Major ports across Europe like Rotterdam and Singapore have LNG
bunker vessels in regular operation while newer locations in North America and
Asia are following suit. Growth in the LNG bunker supply chain has been
facilitated by a combination of initiatives from shipping companies, engine
manufacturers, classification societies, port authorities and gas suppliers. Harmonization
of technical rules and commercial arrangements through bodies like the Society
for Gas as a Marine Fuel is also easing infrastructure development.
Leading shipping companies have placed large orders for LNG-powered ships in
anticipation of growing bunkering networks. Dedicated LNG bunker vessels as
well as truck-to-ship solutions can serve most ports. Countries like Norway
have subsidized port infrastructure and LNG-electric ferry projects to drive
domestic adoption of the fuel. With increasing demand visibility, nascent
bunkering hubs are scaling up rapidly aided by collaborative efforts across the
supply chain.
Promising Future
Despite the early investments needed, most industry assessments point to a very
promising long-term outlook for LNG as a marine fuel. It has truly emerged as a
commercially viable, environment-friendly option compared to conventional fuels
or other low-carbon alternatives currently in development. Major classification
societies estimate that LNG will account for at least 10-15% of global marine
fuel demand by 2030 and 25-30% by 2050. Engine manufacturers report solid order
books for LNG-powered vessels spanning sectors like containerships, tankers,
bulk carriers and ferries.
Leading shipping companies operating large LNG carrier and LNG-powered newbuild
fleets echo the confidence in natural gas as a long-term marine fuel solution.
Driven by regulations, costs and availability trends, uptake of LNG bunkering
is expected to ramp up significantly in core shipping routes and trade lanes
over the next decade. With growing evidence of performance and total cost
advantages, LNG has established itself as a bankable marine fuel meeting
industry needs for sustainability, compliance and efficient operations. This
positions it to play a major role in the decarbonization of international
shipping.
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About
Author:
Ravina
Pandya, Content
Writer, has a strong foothold in the market research industry. She specializes
in writing well-researched articles from different industries, including food
and beverages, information and technology, healthcare, chemical and materials,
etc.
(https://www.linkedin.com/in/ravina-pandya-1a3984191)
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