Image:Shell Marine
The shipping industry is facing unprecedented challenges in its journey to decarbonize, and the conversation is shifting towards more immediate solutions. One fuel in particular, Liquefied Natural Gas (LNG), has emerged as the frontrunner in these discussions. While it is not without controversy, especially around methane slip, the argument for LNG has become compelling due to its availability, scalability, and cost-efficiency.
Why LNG and Why Now?
Melissa Williams, President of Shell Marine, outlined the reasons for this shift towards LNG during a recent podcast: “The lowest cost fuel option available today is LNG. It offers a pathway to decarbonize with Bio-LNG and synthetic LNG in the future.”
Shipping companies are facing multiple pressures, from regulatory requirements to operational demands, and LNG has proven to be a flexible option that can be deployed at scale. It is available today, and infrastructure is already in place. This contrasts sharply with other alternatives like methanol and ammonia, which, while promising, are not as market-ready.
LNG’s Controversy: Methane Slip
Despite its growing popularity, LNG is not without its critics. Methane, the primary component of LNG, is a potent greenhouse gas, and concerns about methane slip — the leakage of methane during production, transportation, or combustion — have raised alarms. Methane is up to 82 times more potent than carbon dioxide over a 20-year period.
However, companies like Shell are actively working to mitigate these issues. The development of methane abatement technologies and improvements in engine design have helped to significantly reduce methane slip. Shell’s methane emissions intensity in 2023 was well below the target, and ongoing efforts are aimed at bringing these numbers down even further.
Fuel Agnostic: Flexibility in a Changing Market
Stelios Chulis from Angelicusis Group highlighted the importance of flexibility in fuel choices, stating, “We are fuel agnostic…we arrive at LNG with tightly controlled methane slip, which delivers greenhouse gas savings today.” For shipping companies, the ability to respond to future developments is critical, and LNG offers a near-term solution that can evolve over time with the introduction of bio-LNG and synthetic LNG.
MSC, the largest container carrier globally, has also embraced LNG as a practical solution, with over 20 dual-fuel LNG ships already in service and another 100 on order. According to Bud Dar, Executive Vice President of MSC, the company sees LNG as a “bridge fuel” that will enable them to meet current regulatory targets while keeping an eye on future fuel technologies like ammonia and methanol.
The Role of Bio-LNG and Synthetic LNG
The long-term viability of LNG in the shipping industry is tied to the development of bio-LNG and synthetic LNG. These fuels, derived from renewable sources, offer the potential for carbon-neutral shipping. Bio-LNG, for example, can be produced from organic waste, turning what would otherwise be a pollutant into a valuable energy source.
However, scalability remains a challenge. While bio-LNG holds promise, its availability is currently limited. The shipping industry is competing with other sectors for the same supply of renewable biomass feedstock, which could limit its adoption unless large-scale production is ramped up.
Regulatory and Economic Challenges
Shipping is not operating in isolation when it comes to fuel supply. The industry accounts for just 4% of global fuel consumption, and competition from other sectors is fierce. Regulatory clarity is critical to fostering the development of alternative fuels at scale.
Governments and international regulatory bodies like the International Maritime Organization (IMO) play a crucial role in shaping the future of shipping fuels. Without clear and consistent regulations, investment in alternative fuel production will lag behind. The IMO’s upcoming meetings will be pivotal in determining the trajectory of LNG and other fuels in the maritime sector.
As Bud Dar from MSC pointed out, “Governments have got to do their part. We need their help to get the molecules in the market.”
The Future of LNG in Shipping
LNG represents a pragmatic choice for shipping today, providing immediate emissions reductions while offering a pathway to further decarbonization through bio-LNG and synthetic LNG. While the industry remains open to other fuel options like methanol and ammonia, LNG has positioned itself as the most viable option in the near term.
The ongoing work to address methane slip and improve LNG’s environmental footprint will be key to its continued adoption. As the industry awaits more robust regulatory frameworks, LNG remains the most scalable and cost-effective solution available, providing a bridge to a more sustainable future.
Source: lloydslist
