LNG the shipping fuel of the future?

Timon Singh

Shipping and maritime trade is crucial to the world's economies and essential for many countries, but greenhouse gas emissions from worldwide shipping currently account for more than 3 percent of all annual global emissions. That is more than the entire UK economy, and it has seen an 85 percent rise since 1990.

For years, the United Nations have discussed rules to cut the amount of gases produced by the world's ships, with plans ranging from powering ships with solar power to redesigning ships to be more efficient.

However, many believe that the key to cutting shipping emissions is changing the fuel, and according to Executive Vice President of Norwegian firm DNV (Det Norske Veritas), Remi Eriksen, LNG is the shipping fuel of the future.

"The single most effective move is to introduce LNG as fuel"

Speaking at a shipping summit in Shanghai, Eriksen said, "Global shipping can reduce its CO2 emissions by 30 percent over the next 20 years through measures that are profitable for the shipping companies. The single most effective move is to introduce LNG as fuel."

According to the company's website, DNV has carried out a study of 59 ship segments representing the major ship-types and sizes of international shipping, identifying 25 different measures that can contribute to reduced emissions. Each of these segments have been modelled separately with regard to operational assumptions, the reduction potential of each measure, the cost of each measure and the year when available measures are phased in.

For 17 of the 59 vessel types and sizes it is cost-effective to install gas-fuelled engines assuming a gas price equal to the price of marine diesel oil. The study, called "Pathway to Low Carbon Shipping" demonstrates that CO2 emissions by 2030 can be reduced by 30 percent below baseline through measures that save cost for the operators, and by almost 60 percent if all the identified measures are included.

"Many believe that gas is tomorrow's fuel. We at DNV think it is already here. LNG as a fuel offers obvious environmental benefits," said Remi Eriksen. "These benefits include nearly 100 percent reduction in SOX and particle emissions, 85-90 percent reduction in NOX emissions and 15-20 percent reduction in CO2 emissions."

"For a switch to LNG to happen certain elements need to be in place," Remi Eriksen pointed out. "The technology is there, as many manufactures are offering LNG fuelled engines already. A challenge is the loss of cargo space due to cylindrical LNG storage tank. For new buildings it is fairly simple to find space for the larger fuel tanks, while this may be more difficult for retrofitting on existing ship."

"There is an abundance of natural gas in the world. When we add unconventional resources - like e.g. shale gas - there is a 250-year supply at current usage. The spot price of LNG is already at one fourth to one third the price of diesel oil. LNG needs to be offered with a price linked to the spot market price rather than the prices of the marine diesel that it may replace."

"The main challenge is the lack of LNG bunkering infrastructure. As an example, distribution of LNG as fuel for ships in Norway is done through dedicated terminals for ships in point-to-point traffic (ferries) or for ships always returning to the same port (supply vessels). Larger scale development should be based on making LNG available at existing bunkering stations. When it comes to sourcing of LNG - this must be based on economic considerations," Remi Eriksen said.

As Russia is one of the biggest producers of LNG, this could be a market that they could easily corner, but for now the International Maritime Organisation (IMO) is currently drawing up recommendations for design standards to make ships more efficient.

Also proposed by the IMO are mandatory improvements on ship design making them more fuel efficient. Rules are also to be drafted on how ships are operated, making them to sail more slowly or more directly to save fuel costs.

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