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Is LNG really part of a low carbon shipping future?

While a new study highlights the benefits of LNG as solid move towards a low carbon future for shipping, other experts reassert their claims it is a dead-end.

A study has been published by Sea/LNG and the Society for Gas as a Marine Fuel to demonstrate the emissions reductions of liquid natural gas compared to current bunker fuels.

The data was collected from a third-party consultancy, but from the corporates that are members of the two associations. From the engine maker OEMs this gives a picture of their engines when burning gas compared to burning heavy fuel oil or low sulphur bunkers, part of what is known as the tank to wake emissions picture It also looks at the well to tank part of the bunker supply chain.

While the source of the data used for the report can be questioned for its authenticity- engine makers have been known to be creative with data in the past – there is no doubt that this is one of the best theoretical studies to date.

In a press briefing SEA/LNG General Manager Steve Esau said that the study was objective, used a third party body to draw in the data, and had external scientific peers review it ahead of its release.

“Shipping is under a lot of regulatory pressure. This is a challenging time and shipowners need to make their investment decisions on real hard economic data,” he said adding that shipping needs an accurate analysis for both now and in the future.

He also pointed to the conflicting data that has been published in the past that has confused owners. “The objective of the study is to give an accurate analysis both now and in the future. A study that shipowner and investors can lean on,” he said.

But while the study paints a positive picture of LNG as a fuel today, the study’s backers may have a harder task in convincing industry of its long term value.

Peter Keller is executive vice chairman of US-ship operator said “We believe LNG is the foundation to moving forward. It is not the be-all-and-end all, but how long it will go until there are other options we do not know. But we know BioLNG and synthetic LNG will provide other benefits.”

He also said that the two associations, which have a growing number of corporations with vested interests in the LNG supply chain or its use, are working on a further report looking at a possible transition to bioLNG and synthetic LNG.

A marine fuel dead end

The role of LNG as a fuel to meet the IMO’s target’s has previously been criticized as a dead end, despite there now being hundreds of vessels in service or under construction or on order that can be powered by LNG.

Most LNG fueled vessels will be newbuildings, a fact recognised by Sea/LNG and SGMF, but with most vessels ordered and built in 2020 likely still to be in service towards 2050, a 28% saving on CO2, the maximum saving referenced in this report, may not be enough to meet the targets.

The IMO target is to more than halve the total amount of 2008 level of GHG emissions from international shipping by 2050. This means shipping needs to emit (by 2050) less than half of the 940m tonnes CO2 (or CO2 equivalent as there are other GHGs)  reported in the 3rd IMO GHG study for 2008.

In short, well before 2050, international shipping needs to emit less than 470 million tonnes CO2e annually, regardless of the impact of world trade on demand.

But this remains somewhat a a ball park figure, because as Dr Tristan Smith, Reader in Energy and Shipping at the UCL Energy Institute and a co-author of the IMO GHG studies points out, CO2 stays in the atmosphere for centuries, so it is better to consider the total amount of CO2 that can be emitted in the coming decades, a so called carbon budget. He is sceptical that LNG will achieve this.

He points to the The International Energy Agency’s work on future pathways for shipping, which he says made an explicit point about how there was no obvious role for LNG in shipping’s future given the scale of the GHG-intensity reductions required of the sector.

“That work was further given credibility when IMO adopted its GHG reduction strategy in April last year making a commitment to at least 50% GHG reduction by 2050 and much of the industry debate (including from International Chamber of Shipping, the leading shipowner organisation) has made it clear that this commitment means a rapid switch away from fossil fuel, which makes a transition to LNG look even more unlikely. This is further emphasised by Maersk’s public commitment at the end of last year to build zero emissions ships from 2030”.

Peter Keller, Chairman SEA/LNG & Executive VP, Tote

To some extent SEA/LNG chairman Keller concurs.

“We know that LNG is a viable solution and is available now. And as many of us know in our day to day lives, waiting is not necessary a plan, and the maritime industry must recognize that the government changes are happening and will not go away,” he said.

The full study from consultancy firm Thinkstep can be downloaded here

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