Shipowners remain uncertain on LNG

Preliminary results of European Commission show acknowledgement of environmental advantages as a fuel, but clear business case is lacking
Shipowners remain uncertain on LNG

The major motivation for shipowners to engage in LNG as a shipping fuel is to comply with Emission Controlled Area (ECA) zone requirements and the related positive environmental effects, a study by the European Commission has indicated. Despite that, wholesale adoption is being prevented by issues surrounding the financing of LNG as a fuel and the pricing of LNG itself.

LNG does not currently offer a profitable business model, with the higher equipment costs for engines and tanks not being offset by savings in fuel or operating expenses. The bunkering infrastructure around the world is also relatively poor.

The European Commission’s Directorate-General for Mobility and Transport (DG MOVE), PwC and DNV-GL are conducting the analysis and evaluation of the gaps that exist in the regulatory framework for LNG-fuelled ships and the provision of LNG fuel. The research is focusing on risks and opportunities of using LNG as a shipping fuel.

“This study gives us a solid overview of the opportunities and remaining challenges for the use of LNG for shipping. More importantly: the outcome helps us to feed a public debate on LNG for shipping and provides arguments for a stakeholder debate at local level.” said Sandro Santamato, Head of Unit Maritime transport & Logistics, European Commission.

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by Tom Holmes

Marine Trader Editor

Tom Holmes is the Editor of Marine Trader and readmt.com, the official publications of the International Marine Purchasing Association (IMPA). To discuss news, features or contributing to Marine Trader please get in touch.

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