By Peter Keller
Now that we have passed January 2020, the much-anticipated global sulphur cap is finally a reality. The importance of this clean air initiative for global health is widely agreed and should not be under emphasized. Likewise, the critical role that LNG can play in clean air and global health initiatives must not be forgotten or trivialised as these are still matters of real concern to the world’s citizens.
I said 2019 would be the year of acceleration for LNG, and it was! With increasing orders for LNG- fueled vessels and LNG bunker vessels, together with expanding infrastructure shoreside to provide the critical last-mile delivery of LNG to ships; LNG as a marine fuel remains the economic and environmental choice. Increasingly too, LNG is seen as the transition fuel to a net-zero carbon future. While we anticipate LNG as marine fuel will evolve into bio or synthetic methane, the LNG safety and operational guidelines, as well as infrastructure, will act as best practice for the adoption of alternative fuels over the longer term.
As attention now turns to the carbon emissions reduction targets for 2030 and 2050, we must recognize that, in 2020, we are well down the road from the 2008 baseline and there must be a pragmatic chronology to achieving a more sustainable, decarbonized future for shipping. The global deep-sea fleet consists of more than 60,000 vessels with an average life expectancy well in excess of 25 years. This fleet, that fuels the economy upon which we all depend, cannot be turned around overnight. This is precisely why there is increasing recognition and acceptance that LNG as a marine fuel must play a central role in transitioning to a zero carbon industry. LNG is the only commercially viable fuel widely available today.
This process has already been started by many leaders in our Industry but must be embraced globally by the broader ship-owning community. By starting to move now to LNG we reduce carbon emissions immediately and build a strong foundation for future reductions using liquefied bio methane (LBM) and liquefied synthetic methane (LSM) as the technology required continues to mature.
Underpinned by LNG’s compelling emissions and investment credentials, 2019 saw unprecedented and remarkable uptake across many sectors of the deep sea fleet, as we anticipated this time last year. Perhaps more importantly, the infrastructure to support LNG as a marine fuel has grown significantly. It can now be delivered to vessels in some 93 ports with a further 54 ports in the process of facilitating LNG bunkering investments and operations. This begins to answer the “chicken or egg” dilemma as both new LNG-powered vessels are being ordered and major ports around the world are developing infrastructure to service this growing fleet.
This process will continue and accelerate as the real benefits of LNG as a marine fuel continue to be demonstrated for forward-thinking vessel owners and operators.
Environment & Emissions
When it comes to improving air quality and human health, LNG boasts unrivalled emissions credentials, cutting SOx and particulate emissions to negligible amounts and reducing NOx by around 85 percent. It is a perfect example of a ‘no brainer’. Moreover, when combined with Energy Efficiency Design Index (EEDI) improvements to ship design, LNG is forecast to meet the IMO 2030 target for decarbonisation on new ships. The Life Cycle GHG Emission study published by thinkstep in April 2019 is widely regarded as the definitive study into GHG emissions from current marine engines – i.e. those available in the market today. It is comprehensive, using the latest primary data to assess all major types of marine engines and global sources of supply. It is quality-assured in assessing the supply and use of LNG as a marine fuel according to ISO standards, and is objective, having been peer-reviewed by a panel of independent, academic experts in life cycle analysis and marine engine technologies.
The study clearly shows that on an engine technology basis, the Tank-to-Wake emissions reduction benefits for LNG fueled engines compared to HFO fueled ships are between 18 percent to 28 percent for 2-stroke slow speed engines and between 12 to 22 percent for 4-stroke medium speed engines. The absolute Well-to-Wake emissions reduction benefits, accounting for methane emissions, for LNG-fueled engines compared with HFO fueled ships today are between 14 percent to 21 percent for 2-stroke slow speed engines and between 7 percent to 15 percent for 4-stroke medium speed engines. Importantly, around 70 percent of the marine fuel consumed today is by 2-stroke engines with a further 18 percent used by 4-stroke medium speed engines.
The expected developments in LBM and LSM provide LNG users a pathway to 2050 and beyond. At a molecular level LBM and LSM are identical to (fossil-fuel derived) LNG meaning that there are no blending issues and existing assets, such as LNG-fueled ships and bunkering infrastructure will not be stranded. Therefore, LNG with growing substitution by LBM and LSM represents the most compelling decarbonization journey, starting now, for deep sea shipping. We will shortly publish a study which analyses the current and future global availability of LBM and LSM.
In summer 2019, SEA-LNG released the results of its Alternative Fuels Study, which was conducted by DNV GL. The study highlighted that while meeting the IMO carbon targets of 2050 requires the introduction of zero emission technologies, the reality is that they are simply not ready and nor will they be for the foreseeable future.
Alternative fuels such as hydrogen and ammonia may have a role to play in certain maritime applications in the future. But these alternatives currently lack the regulatory framework, production capacity, acceptable safety protocols, and bunkering infrastructure for widespread adoption across deep-sea shipping.
Mandated global speed restrictions purported by some as the ‘silver bullet’ to achieve emissions targets is another red herring. Speed limits take no account of the consequences of this action on other parts of the highly efficient international multimodal logistics chain where shipping plays a vital role. This action could act as a disincentive for shipowners and managers to innovate and implement alternative fuels with lower GHG emissions and develop other technological efficiencies.
What we can all agree on is the need to act now – doing nothing is not an acceptable solution – we cannot wait for the “magic elixir”. Indeed, in its 2050 Marine Energy Forecast, DNV GL confirms that, “In almost any scenario, LNG will be the single most important fuel in the market.”
Investment
As recognition of the business case for LNG as a marine fuel grows, so too does the order book for LNG-fueled vessels, across all sectors. In June 2019 there were 163 LNG-fueled ships in operation (excluding over 500 LNG carriers) and a further 155 ships on order. Today (January 2020) these numbers have increased to a total of 175 LNG-fueled ships in operation, with 203 on order and a further 141 LNG-ready vessels in operation and sitting on the order books.
Future Gazing
Momentum behind LNG as a marine fuel continues to gather at pace in line with the growing acknowledgment that LNG is the only safe, available, competitive fuel that:
- Provides clean air benefits which exceed those demanded by the IMO’s 2020 mandate
- Meets the IMO’s 2030 emissions targets when combined with Energy Efficiency Design Index (EEDI) improvements to ship design
- Presents a viable pathway to the IMO’s 2050 carbon reduction targets through the use of LBM and LSM products.
As a coalition, SEA-LNG whole-heartedly believes in collaboration. To develop the net-zero carbon future that we desire within a couple of decades will need to be a team effort. The maritime industry, academics and NGOs must develop collaborative solutions, based upon technologies that are safe, feasible and achievable, as we take the next step on the road to a zero-emissions industry. Expecting others to do the work, developing the necessary fuels and technology is not helpful; both fuel producers and consumers need to take responsibility – there needs to be a continuing commitment, from across the board, to providing factual, quality information which supports the industry in assessing how we are going to achieve the energy transition.
In support of this, the next independently conducted report from SEA-LNG explores the availability of liquid biomethane and liquid synthetic methane. Although research continues, the initial findings on the potential global availability of bio-methane in the next decade are particularly exciting. The final results are expected in the first quarter of 2020.
If we are to make effective, meaningful progress with emissions reductions across the board, waiting for utopia and the ‘perfect’ solution is simply not an option. We must continue to act from today. And LNG is the only option that moves us forward, now.
Peter Keller is the Chairman of SEA-LNG (sea-lng.org) and has extensive experience in ports, shipping, intermodal operations and supply chain. As Executive Vice President of Tote Maritime, he led the conversion of the company’s fleet to LNG.
