Peter Keller takes a look at LNG, and the benefits it offers the shipping industry as a more environmentally-friendly source of fuel
In less than a year, new regulations on the chemical composition of marine fuel will come into force and send a wave of disruption across the global shipping industry. On January 1st, 2020, the International Maritime Organization’s (IMO) global sulphur cap will cut the permitted sulphur content in marine fuels from 3.5 per cent, as it currently stands, to 0.5 per cent.
The sulphur cap has unsettled the usual steady pace of the global shipping community as its players rush to prepare for the regulation, with impacts reaching from bunker fuel refiners right down to consumers.
With less than 12 months to go until the regulation is enforced worldwide, the well-documented three main compliance options remain the same; switch vessels to burning more expensive, IMO-compliant 0.5 per cent low sulphur fuel oil; install exhaust gas cleaning systems – or scrubbers – to scrub out the sulphur from existing (3.5 per cent) heavy sulphur fuel oil; or move away from traditional fuel oils altogether and adopt alternative low emission fuels, such as Liquefied Natural Gas (LNG).
SEA\LNG considers the latter of these options – LNG – to be the most environmentally friendly, readily available fuel alternative for the shipping industry, both today and for the foreseeable future – and we’re pleased to see this assessment gaining strength across the industry.
Given its considerable environmental credentials, and the approaching sulphur cap deadline, 2018 saw a sea-change in attitudes and actions towards LNG as a marine fuel. By March, for example, of the 94 cruise ships on the global order book, 18 under construction were LNG-powered. This represented 20 per cent of all newbuilds for the cruise industry, but 25 per cent of newbuilding capacity due to the size of the vessels ordered.
Overall, the LNG-powered fleet has grown globally from 118 LNG-powered vessels in operation in 2017, to 159 LNG-powered vessels in operation as at the beginning of May 2019 – with a further 145 on order and 141 LNG-ready ships either in operation or on order (according to DNV GL Alternative Fuels Insight). As regards LNG supply, of the top 25 global ports ranked by volume of trade, bulk LNG is already available in, or in close proximity to, 24 of them. What is needed are the last mile investments to bring LNG to the ships and these are happening. LNG bunkering facilities are available or planned in all but one of the top ten bunker ports, driven by the requirement to supply the soaring number of LNG vessels. The single operational LNG bunker vessel operating at the beginning of 2017 has been joined by a further eight, with – we estimate – 30 likely to be in operation within the next four to five years at key bunkering nodes in Asia, Europe, the Middle East, and North America.
The environmental case for LNG as a marine fuel on an air-quality basis is well-documented. LNG outperforms conventional marine fuels in terms of minimising local emissions to improve air quality and can significantly reduce greenhouse gas emissions. LNG emits zero sulphur oxides (SOx) and virtually zero particulate matter (PM), and compared to existing heavy marine fuel oils, LNG also emits 95 per cent less nitrogen oxides (NOx).
These benefits bolster LNG’s position as the fuel of choice in complying with the IMO’s 2020 sulphur cap for deep-sea shipping, and the vast reduction in sulphur and particulate emissions also presents significant human health advantages for vessels operating in ports and coastal areas.
One key misconception which has served as a barrier to the adoption of LNG across the global fleet surrounds its performance against current and developing fuel options on the reduction of greenhouse gas (GHG) emissions. Varying estimations on LNG’s GHG reduction performance have ranged from negligible to considerable, and the lack of evidence to support the claims made by both LNG’s opponents and advocates has created uncertainty among shipowners looking to invest in newbuilds.
SEA\LNG has recently released the results of an independent study examining the GHG performance of LNG as a marine fuel, providing long-awaited, proven evidence to the debate. The Well-to-Wake (WtW) GHG Emissions Life Cycle Study reveals that GHG reductions of up to 21 per cent are achievable now from LNG as a marine fuel, compared with current oil-based marine fuels over the entire life-cycle from Well-to-Wake. Further isolation across the life cycle process also demonstrates GHG benefits of up to 28 per cent from the combustion process for LNG bunkers on a Tank-to-Wake (TtW) basis.
The study was jointly commissioned by SEA\LNG and the Society for Gas as a Marine Fuel (SGMF), and was conducted by leading data and consultancy provider thinkstep according to ISO standards. The report, which has been reviewed by a panel of independent academic experts, is the definitive study into GHG emissions from current marine engines. Indeed, one prominent maritime journalist noted; “there is no doubt that this is one of the best theoretical studies to date.”
On an engine technology basis, the absolute WtW emissions reduction benefits for LNG-fuelled engines compared with HFO fuelled ships today are between 14 per cent to 21 per cent for two-stroke slow speed engines and between seven per cent to 15 per cent for four-stroke medium speed engines. Seventy-two per cent of today’s marine fuel is consumed by two-stroke engines, with a further 18 per cent used by four-stroke medium speed engines. These GHG emission reduction benefits for gas fuelled engines do not change significantly when compared with the expected post-2020 compliant oil-based marine fuel options.
The study also affirms that emissions of other local pollutants, such as SOx, NOx and particulate matter, are close to zero when using LNG compared with current conventional oil-based marine fuels.
In confirming what we already know in terms of LNG’s immediate impact on air quality and human health, and in providing a foundation of long-awaited evidence to ground the GHG emissions debate, the study definitively proves that LNG is a fully compliant and viable solution both for the impending sulphur cap, and significantly contributing to the IMO’s decarbonisation target of a 40 per cent decrease by 2030 and 50 per cent by 2050 for international shipping.
Ongoing optimisation within the LNG supply chain, and developments in engine technology in combination with efficiency measures being developed for new ships in response to the IMO’s Energy Efficiency Design Index (EEDI), will deliver further progress on LNG’s ability to reduce greenhouse gas emissions.
Longer term, bioLNG and synthetic LNG also offer the potential for significant GHG emissions reductions. Bio and synthetic LNG are fully interchangeable with LNG derived from fossil feedstock, and analysis shows that both fuels can provide significant additional benefit in terms of WtW GHG intensity – a blend of 20 per cent bioLNG as a drop-in fuel, for example, can reduce GHG emissions by a further 13 per cent compared with 100 per cent fossil fuel LNG.
LNG provides a major advantage for the shipping industry in improving air quality and human health, as well as contributing significantly to the IMO’s GHG emissions reduction targets. It is widely available and scalable now, and the scope for continued innovation and optimisation across the LNG market lays the foundation for a clear pathway towards decarbonisation.
Peter Keller is Chairman of SEA\LNG, a UK-registered not for profit collaborative industry foundation serving the needs of its member organisations committed to furthering the use of LNG as an important, environmentally superior maritime fuel. SEA\LNG has members across the entire LNG value chain including providers of the product, users, engine and asset suppliers, and class societies.