United Nations Conference on Trade and Development (UNCTAD) has published its Review of Maritime Transport 2017 and observes liquefied natural gas (LNG) as a shipping fuel is experiencing growth, a trend that is evolving in a context of tightening environmental policies.
The report makes note of recently adopted or pending regulations that have led to the shift in fuel choices, for example, the imposition of the 0.5 per cent mass/mass sulphur fuel content limit for global marine traffic that commences 2020 and the much tighter 0.1 per cent m/m limit that has been part SOx Emission Control Areas (ECAS) since 1 January 2015. The report also points to gathering support for greenhouse gas emission regulation in the maritime sector and the many emissions reduction incentives that are on offer, specifically related to the adoption of new technologies and energy sources.
“In this context, local emissions can be reduced by using liquefied natural gas as a fuel”, the report says, while also pointing out the various other choices that are available for ship operators. “Depending on the circumstances, liquefied natural gas can be the more cost-efficient option and potentially reduce greenhouse gas emissions as well, contingent on the applicable well-to-wake pathway […]. In addition, factors such as new regulatory requirements, an increasingly buyer-dominated liquefied natural gas market […] and technological progress, the fleet of vessels capable of using liquefied natural gas as fuel has increased.”
“While the percentage of liquefied natural gas-capable3 newbuildings (measured in gross tons) was relatively steady at about 2 per cent from 2002 to 2013, it rose to 5.8 per cent in 2014, 4.3 per cent in 2015 and 5.3 per cent in 2016. The trend becomes particularly evident when considering the order book. While a slight increase is expected in 2017 (to 5.7 per cent), 13.5 per cent of the gross tonnage currently on order for delivery in 2018 onwards are from liquefied natural gas-capable ships.”
UNCTAD provides the following figures as evidence of the growing adoption of natural gas marine technology. At the start of 2017:
- 325 vessels capable of operating with LNG had been delivered, consisting of 229 liquefied natural gas carriers, 46 offshore service and other cargo vessels, 39 passenger vessels and 11 other types of vessel
- 110 liquefied natural gas-capable ships were on order
While the number of LNG-capable vessels surges, there is still a lag with the development of LNG refuelling infrastructure; only a few ports thus far have liquefied natural gas bunkering facilities but the report says that number is also growing. The possibility of incorporation of renewable natural gas (biomethane) into fuel supply amplifies the environmental advantages of natural gas propulsion.
The LNG marine fuel section of the report concludes with the following points:
- Adoption of natural gas fuel diversifies supply risk and reduces dependency
- Coordinated initiatives are required for infrastructure supply and bunkering demand to proceed in a balanced way, which UNCTAD says is the responsibility of governments.
- A supportive policy environment will ensure high standards in bunkering and ship operations while also facilitating a wholistic approach to natural gas for transportation that goes beyond vessels to port ancillary services, hinterland traffic and inland waterways transportation.