LNG As Fuel: Challenges & Opportunities

By Tom Mulligan – June 5, 2017

Here are some simple statistics about the shipping industry:

  • It accounts for 90 percent of worldwide transportation
  • It produces 3.1 percent of worldwide emissions
  • It is the least polluting method of transportation

…But it still produces more than twice the emissions of the whole of France (yes, twice the emissions from all sources of a country as large as France!)
Environmental regulations are the main driver in reducing these emissions worldwide. Although until recently ECA zones were limited to a few areas, the IMO has now decided to limit SOx emissions worldwide and by 2020 all newbuilds will have to comply with its new regulations. The challenge for the shipping industry, however, is not only to comply with the IMO 2020 sulfur cap but also to catch up with the planning of the regulation by identifying and implementing the solutions that are available to enable regulation-compliant ships to be designed and built over the next three years – and this needs to be achieved now, with the shipping industry currently in the middle of a crisis. Investment and operational costs are critical parameters that need to be considered.
The answer to the problem needs to be based on a long-term perspective – the industry needs to be two steps ahead of the regulations. There are several approaches that can be adopted to reduce emissions, one of the most promising being the use of liquefied natural gas (LNG) as fuel. This approach is compliant with existing and upcoming norms: SOx emissions can be reduced by 100 percent, Nox by 85 percent, particulates by 98 percent and carbon dioxide by 20 to 25 percent.
Moreover, LNG is becoming increasingly available, with infrastructure being developed in all the major worldwide ports and international oil companies expanding and improving their product and service offerings in LNG fuel. The technology for the use of LNG is already established, with about 100 ships currently running on it and about another 90 LNG-fueled ships on order. And, of course, LNG has been used for years as a fuel by methane carrier vessels. It is also a cost-effective alternative fuel: investment in the technology may be higher than in older oil technologies but the operation of LNG-fueled vessels results in considerable savings over the use of marine diesel oil, while further progress is being made in reducing LNG transformation and logistics costs compared with the cost of continuing to use heavy fuel oil (HFO).
LNG is becoming an important fuel for maritime applications, and the shipping industry is now at a turning point where industry players are providing technologies and solutions. Nevertheless, in a context where charter rates are historically low, shipowners are still reluctant to invest to retrofit their existing fleet or to order LNG-fueled newbuilds. However, with IMO regulations coming into effect in the near future, and further regulations to follow 2020, the regulatory scene will be even more restrictive and will push the industry into choosing long-lasting solutions rather than short-term alternatives. Thus, the major players expect to see LNG-propelled ships comprising 20 percent of the global fleet in the following decade, making this fuel one of the most promising alternatives available to the marine sector in moving towards a greener shipping industry.
(Originally published in the May 2017 edition of Maritime Reporter & Engineering News)


Shipping reaffirms its commitment to cutting CO2 emissions – MarineLog

MarineLog – JUNE 5, 2017

The United Nations Ocean Conference (5-9 June), organized by the UN General Assembly, opens today in New York and tomorrow, June 6, the International Chamber of Shipping (ICS) will explain that the global shipping industry is fully committed to the UN Sustainable Development Goal for the protection of the Ocean.

ICS says that the decision by President Trump to withdraw the U.S. from the Paris Agreement on climate change will have no impact on the shipping industry’s strong commitment to reducing its CO2 emissions.

Speaking at a session on the prevention of ocean acidification, ICS will present some ambitious “aspirational objectives”on CO2 reduction which the industry – responsible for moving about 90% of global trade – wants its regulator to adopt on behalf of the international shipping sector, in the same way that governments under the Paris Agreement, have adopted CO2 reduction commitments on behalf of their national economies.

The industry has proposed that the UN International Maritime Organization (IMO) should agree to an objective of keeping total CO2 emissions from the shipping sector below 2008 levels and then cut annual total CO2 emissions from the sector by 2050, by a percentage to be agreed by IMO.

This is in addition to an existing industry commitment to cut CO2 emissions per tonne of cargo carried one kilometer by 50% by 2050, compared to 2008.

ICS Director of Policy, Simon Bennett, will explain to the world’s governments attending the UN Ocean Conference that:

“Shipping, because of its great size, is currently responsible for about 2.2% of annual anthropogenic CO2 emissions.

According to IMO, shipping has reduced its total CO2 emissions by more than 13% between 2008 and 2012, despite increased maritime trade, but there is a perception that shipping, whose emissions cannot be attributed to individual nations, may have somehow ‘escaped’ the Paris Agreement.”

In three weeks’ time, in London, the IMO will open the first of a series of meetings to develop a strategy for further reducing CO2 from ships, in order to match the ambition of the Paris Agreement. The industry has proposed that IMO should adopt some ambitious aspirational objectives on behalf of the international shipping sector as a whole.

The shipping industry has made these proposals to the next session of the IMO Marine Environment Protection Committee, which meets in London at the end of June.

Throughout the UN Ocean Conference, ICS will also make the case that shipping has an impressive environmental performance and is a driver of “green growth.” In addition to reducing CO2, the industry is committed to the implementation in 2020 of the global cap on the sulfur content of marine fuel, at an anticipated collective cost of around US$ 100 billion per annum.

ICS will also press for government regulators to give equal priority to each of the three pillars of sustainable development identified by the UN: economic, social and environmental.

ICS argues that understanding the importance of economic factors in achieving sustainable development is especially important in view of shipping’s role in the continuing spread of global prosperity and the movement of about 90% of trade in goods, energy and raw materials.

Speaking at an IMO side event at the UN in New York, Mr Bennett said:

“The shipping industry is committed to the delivery of further environmental improvements in the interests of sustainable development. But sustainable development requires a global shipping industry that is economically sustainable too.”

This message has been presented in a brochure International Shipping: Protecting the Ocean, Committed to CO2 Reduction, which is being distributed at the UN Ocean Conference.

You can download it HERE

Source: Shipping Reaffirms Its Commitment