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Thursday, March 30, 2017

EC Study on LNG as Shipping Fuel Reveals Industry Backing

March 4, 2015

LNG carrier LNG Pioneer. By MOL

LNG carrier LNG Pioneer. By MOL

 As efforts to combat climate change increase worldwide, pollution stemming from maritime shipping presents a particular challenge. 

 
 The study on the perception of the risks and opportunities of LNG as a shipping fuel is presented by the European Commission.
 
The results show that stakeholders recognise the environmental advantages of LNG as a shipping fuel, but are still uncertain whether they offer a clear business case.  
 
“This study gives us a solid overview of the opportunities and remaining challenges for the use of LNG for shipping. More importantly: the outcome helps us to feed a public debate on LNG for shipping and provides arguments for a stakeholder debate at local level.” said Sandro Santamato, Head of Unit Maritime transport & Logistics, European Commission.
 
The study takes into account the overall EU policy aiming at reductions of emissions from shipping and looking for alternative energy sources, in view of growing constraints on the use of heavy fuels.
 
From the study it becomes clear that on the one hand, the major motivation for stakeholders to engage in LNG as a shipping fuel is to be compliant with Emission Controlled Area (ECA) zone requirements and the related positive environmental effects. 
 
On the other hand, the most critical issues for further deployment are the financing of LNG as a fuel and the pricing of LNG itself. For many companies, and especially shipping companies, LNG does not offer a profitable business model yet: the higher equipment costs for engines and tanks are not offset by savings in fuel or operating expenses. 
 
Also, the lack of existing bunkering infrastructure for LNG is another quite important barrier.
 
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