Page 7 - FSUOGM Week 21 2021

FSUOGM COMMENTARY FSUOGM

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 said, costs concerns will need to be balanced with
a role in the decarbonisation of shipping has decarbonisation goals, and turning to emerging
WHAT: intensified following the publication of a series green fuels at the expense of LNG is an expensive
The debate over using of World Bank reports last month. In the reports, proposition.
LNG as a bunkering fuel the World Bank identified “green fuels” such
has intensified following as hydrogen and ammonia as being the most Post-IMO 2020 world
the publication of World promising zero-carbon bunker fuels available The development of LNG as a marine fuel has
Bank reports on the currently. However, it said LNG was likely to been underway for some time. Indeed, accord-
decarbonisation of play a “limited” role in the decarbonisation of ing to Titan CEO Niels den Nijs and marine
shipping. shipping, and indeed recommended avoiding commercial director Michael Schaap, in a state-
the super-chilled fuel in order to put shipping on ment published in response to the World Bank’s
WHY: a trajectory that aligns with the Paris Agreement findings, it has taken around a decade for LNG
The World Bank has on greenhouse gas (GHG) emissions. bunkering to mature.
recommended avoiding The findings have been met with criticism However, the use of LNG as a marine fuel has
LNG as the shipping from SEA-LNG, an industry group, with com- been gaining traction only recently, particularly
industry makes efforts to panies including super-major Royal Dutch Shell since the International Maritime Organization
decarbonise. and bunkering player Titan LNG also defend- (IMO) introduced its 2020 rules, limiting sul-
ing LNG bunkering and its environmental phur content in bunker fuels to 0.5% from 3.5%
WHAT NEXT: credentials. previously.
Industry players are Indeed, Titan subsequently launched a The introduction of IMO 2020 coincided
criticising the reports’ development tender for a planned new LNG with a boom in global LNG production as new
conclusions, and the bunkering barge, illustrating that at least in the liquefaction terminals and supporting infra-
marine LNG fleet is set to shorter term, the marine LNG fleet is set to keep structure opened up across various countries.
expand regardless. growing. Suppliers of the fuel were keen to tout its envi-
In the longer term, there are uncertainties, ronmental benefits, asserting that it is the clean-
however, as some countries may yet choose to est-burning fuel that is widely available to the
follow the World Bank’s recommendations and shipping industry.
avoid policy that favours LNG bunkering. That There are challenges related to the use of LNG

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