Is LNG the viable route to emissions compliance?
International shipping must reduce its carbon intensity within a 2030 deadline
Photo: Martin Damboldt/Pexels
Shipowners are on the horns of a dilemma: they are facing stringent regulatory demands to cut emissions from their fleet by 2030 but the optimal low-carbon fuel solution will not be available in such a short time-frame.
There is increasing pressure on the shipping industry to clean up its act after the IMO’s Marine Environment Protection Committee this summer adopted technical and operational measures to reduce the carbon intensity of the global fleet that are due to take effect from 2023.
These measures, which include the Energy Efficiency Existing Ship Index (EEXI), the enhanced Ship Energy Efficiency Management Plan (SEEMP) and the Carbon Intensity Indicator (CII) rating scheme, are geared to achieving a 40% reduction in average carbon intensity by 2030 and 70% within 2050, compared with a 2008 baseline.
But these regulatory moves have left owners with more questions than answers as the IMO has not specified how these targets can be met. What alternative fuels make sense? Are bunkering facilities available? How can existing vessels be adapted in a cost-efficient manner?
Furthermore, the EU is planning to phase in an Emissions Trading System for shipping from 2023 to 2026 that would make shipowners liable to pay for emissions from ships trading in European waters, giving them a commercial imperative to cut their carbon footprint.
There is also growing market pressure for environment-friendly ship operations, driven by consumer preferences as well as demands from finance institutions, investors, NGOs, politicians and the general public, and green performance will become a key factor in competing for charter deals.
Affordable and available
Liquefied natural gas has been touted as the most viable marine fuel to meet decarbonisation goals in the short to medium term as it is relatively affordable and readily available through an existing bunkering network.
LNG also has negligible emissions of NOx and Particulate Matter (PM), with zero SOx emissions, and can reduce CO2 emissions by between 20% and 30% compared with traditional fossil fuels.
However, many shipowners are still sitting on the fence as alternative carbon-neutral fuels such as hydrogen, ammonia and biofuels, as well as battery hybrid solutions, remain in gestation.
The big question is: why invest in an LNG retrofit if gas can be replaced by other fuels with a lower (possibly zero) emissions impact?
“The time to act is now. LNG may not be perfect but we should not make perfect the enemy of good,” says Lianghui Xia, managing director of UK-based ship repair and retrofitting group Newport Shipping.
A DNV case study showed the use of a dual-fuel LNG engine on a Panamax bulk carrier was the most commercially robust solution compared with other alternative fuel technologies due to cost, reduced tank-to-wake emissions and flexibility in regard to future decarbonisation options.
“While there are more promising fuels on the horizon, LNG remains the only credible and achievable intermediate solution to cut emissions over the next five to 10 years,” Xia says.