LNG-Fuelled Vessel Orders Approaching 30%
SEA-LNG recognises continuing acceleration of LNG-powered newbuilds
Industry coalition SEA-LNG recognises significant growth in LNG-fuelled vessel orders in 2021. According to the latest report from Clarkson Research Services, LNG-fuelled vessel orders are approaching 30% of Gross Tonnage on order, representing a substantial part of shipping’s overall capacity when these vessels are delivered.
2021 has been a banner year for new LNG dual-fuel vessel construction contracts as reported by DNV and others. This trend is expected to continue. Major deep-sea sectors of the maritime industry are embracing LNG in efforts to reduce both local and global emissions, as LNG-fuelled vessels are one of the only options today that meet the reduced emissions required of environmental finance.
It is anticipated that over 90% of the new Pure Car and Truck Carriers (PCTC) that will enter the market in the coming years will be LNG dual fuel. Likewise, containership owners and operators are moving to LNG-fuelled tonnage, with orders for LNG-fuelled liners increasing five-fold since January 2020. Tankers and bulkers are also following suit, with increases of seven-fold and two-fold respectively over the 18-month period.
Owners and operators of deep-sea vessels continue to recognise that LNG is available now, it is proven safe, reduces SOx and particulates to negligible levels, NOx by up to 85%, and GHG emissions by up to 23%. It can also achieve the IMO’s 2030 target of reducing CO2 emissions by 40% compared to 2008 by the use of bio-LNG products as a drop in fuel. This transition to bio-LNG, and eventually synthetic LNG, will enable the industry to meet the IMO 2050 targets. This process utilises established LNG infrastructure without investing in new and costly infrastructure around the globe for unproven fuels.
Peter Keller, Chairman of SEA-LNG said: “The deep-sea shipping industry understands that while LNG may not be the end game, it is the best starting point to get to net zero. It provides a very clear and achievable plan which starts today. We know the need is real and waiting is no longer an option. Recognition for this plan and the pathway forward is continually growing – borne out by the data from both Clarksons and DNV. And the acceleration in uptake of newbuilds fuelled by LNG demonstrates confidence in this pathway through its bio and synthetic cousins.”
Keller concluded: “The advantage of LNG is that both bio-LNG and synthetic LNG are ‘drop-in’ fuels. There are no compatibility issues, and any ratio combination of bio-LNG, synthetic and ‘conventional’ LNG can therefore be used to fuel a large proportion of the deep-sea merchant fleet. It has the potential to scale incrementally in line with the growing availability of biomass and renewable energy, while delivering significant GHG reductions, starting now.”