Page 8 - NorthAmOil Week 20 2021

NorthAmOil COMMENTARY NorthAmOil

Debate over LNG bunkering heats up

The debate over the future of LNG as a marine fuel has intensified after the World Bank

dismissed its potential to help decarbonise shipping

GLOBAL THE debate over the potential for LNG to play that is widely available to the shipping industry.
a role in the decarbonisation of shipping has There are challenges related to the use of LNG
WHAT: intensified following the publication of a series for bunkering too, though. These include the
The debate over using of World Bank reports last month. In the reports, fact that while the infrastructure for liquefaction
LNG as a bunkering fuel the World Bank identified “green fuels” such and regasification has grown rapidly, LNG bun-
has intensified following as hydrogen and ammonia as being the most kering infrastructure is more limited to date,
the publication of World promising zero-carbon bunker fuels available which restricts where LNG-fuelled vessels can
Bank reports on the currently. However, it said LNG was likely to operate. And converting ships to run on LNG
decarbonisation of play a “limited” role in the decarbonisation of comes at a cost.
shipping. shipping, and indeed recommended avoiding Additionally, some voices – particularly those
the super-chilled fuel in order to put shipping on advocating abandoning fossil fuels altogether –
WHY: a trajectory that aligns with the Paris Agreement have questioned the green credentials of LNG.
The World Bank has on greenhouse gas (GHG) emissions. Indeed, the World Bank is not the first organisa-
recommended avoiding The findings have been met with criticism tion to dismiss its potential as a marine fuel in a
LNG as the shipping from SEA-LNG, an industry group, with com- decarbonising world – just the most recent and,
industry makes efforts to panies including super-major Royal Dutch Shell potentially, the most influential one.
decarbonise. and bunkering player Titan LNG also defend-
ing LNG bunkering and its environmental Limited role
WHAT NEXT: credentials. The World Bank’s reports were published with
Industry players are Indeed, Titan subsequently launched a IMO targets for decarbonising the shipping
criticising the reports’ development tender for a planned new LNG industry in mind. Under these targets GHG
conclusions, and the bunkering barge, illustrating that at least in the emissions from shipping are to be reduced to at
marine LNG fleet is set to shorter term, the marine LNG fleet is set to keep least 50% below 2008 levels by 2050, and to be
expand regardless. growing. fully phased out within this century.
In the longer term, there are uncertainties, The World Bank acknowledged that with
however, as some countries may yet choose to the use of LNG, air quality improvements are
follow the World Bank’s recommendations and “undeniable” compared with oil-derived bunker
avoid policy that favours LNG bunkering. That fuels such as heavy fuel oil (HFO).
said, costs concerns will need to be balanced “LNG clearly emits significantly lower quan-
with decarbonisation goals, and turning to tities of sulphur oxides (SOx), nitrogen oxides
emerging green fuels at the expense of LNG is (NOx) and particulate matter (PM),” the World
an expensive proposition. Bank said, adding that the super-chilled fuel The World Bank’s
also emits lower levels of carbon dioxide (CO2).
Post-IMO 2020 world However, it continued, lower CO2 emissions reports were
The development of LNG as a marine fuel has did not mean that overall lifecycle GHG emis- published with
been underway for some time. Indeed, accord- sions from LNG would be lower compared with
ing to Titan CEO Niels den Nijs and marine oil-derived bunker fuels. It noted, in particular, IMO targets for
commercial director Michael Schaap, in a state- the fact that methane was itself a highly potent
ment published in response to the World Bank’s GHG – more so than CO2 – and asserted that decarbonising the
findings, it has taken around a decade for LNG methane leakage, or methane slip, can “dimin-
bunkering to mature. ish or even entirely offset the theoretical GHG shipping industry
However, the use of LNG as a marine fuel has benefit of the use of LNG”. in mind.
been gaining traction only recently, particularly The World Bank went on to assess two sce-
since the International Maritime Organization narios – one in which LNG plays a transitional
(IMO) introduced its 2020 rules, limiting sul- role and one in which it plays a temporary role.
phur content in bunker fuels to 0.5% from 3.5% In a transitional scenario, infrastructure for
previously. LNG bunkering could subsequently be repur-
The introduction of IMO 2020 coincided with posed for greener fuels in the future, while in
a boom in global LNG production as new lique- the temporary scenario, LNG infrastructure is
faction terminals and supporting infrastructure abandoned altogether once a switch is made to
opened up across various countries. Suppliers of zero-carbon bunker fuels.
the fuel were keen to tout its environmental ben- The viability of both scenarios was dismissed
efits, asserting that it is the cleanest-burning fuel by the World Bank, which instead said it sees a

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