Is LNG a ‘US$22 billion distraction’?
A report downplaying the emissions benefits of LNG as marine fuel has been slammed by proponents of gas-fuelled shipping, writes Gavin Lipsith.
The European Union has spent U$250 million on Liquefied Natural Gas (LNG) projects in the marine sector to date, according to a study released in June, providing 50% partnership funding with the private sector to support a total of US$500 million investment. But according to University Maritime Advisory Services (UMAS), a consultancy division of University College London, this spending will have no significant climate benefits at best and could potentially increase greenhouse gas emissions from shipping.
Under one scenario in the report, rolling out LNG infrastructure for shipping in Europe would cost US$22 billion and deliver, at best, a 6% reduction in ship greenhouse gas emissions by 2050 compared to the replaced diesel. The study, commissioned by environmental non-governmental organisation Transport & Environment (T&E), argues that these findings make LNG incapable of achieving the reductions required under the recently adopted International Maritime Organisation (IMO) strategy on reducing GHG emissions from ships.
The authors point to a “high-level failure” in EU planning, in which short-term improvements to air pollution via replacing heavy fuel oil with LNG mean that shipping is locking in fossil fuel infrastructure for decades to come. Even if public funding on LNG infrastructure ceased by 2025 or 2030, total public expenditures over this period would still amount to US$0.95-1.5 billion; which is at least a five-fold increase from what has already been spent on LNG bunkering infrastructure to date under EU’s CEF (Connecting Europe Facility) and TEN-T (Trans-European Transport Network) projects.
The study predicts that, if the growth of LNG as a marine fuel continues, reducing total annual emissions from shipping in-line with the initial IMO objective - at least 50% GHG reduction by 2050 on 2008 levels - would only be possible through offsetting and links to other carbon markets. But, the researchers note, “the letter and spirit of IMO’s commitment requires absolute in-sector reductions without market linkages”.
“There is an uncertain future demand for LNG as a marine fuel over the next 10 years,” said Domagoj Baresic, a UMAS consultant. “It is an option for complying with the 2020 sulphur cap, but as it cannot enable the GHG reductions that have been committed to in the IMO’s initial strategy for GHG reduction and the Paris temperature goals more generally, it is clear its role in shipping's transition to a low carbon future can only be transient.”
The researchers argue that emissions reductions in line with the IMO strategy objective and the Paris Agreement temperature goals is only possible with a switch to increased use of non-fossil fuel sources – among them hydrogen, ammonia and battery electrification - from 2030 at the latest and with rapid growth thereafter. Providing sustainable biofuels can be sourced, these could be a growing part of the fuel mix before 2030, possibly helping to increase the timescale for the introduction of synthetic fuels including hydrogen and ammonia.
If US$250 million has been spent by the EU so far, considerably more has been spent by the private companies investing in LNG bunkering infrastructure and gas-fuelled ships. So it is not surprising that SEA\LNG, the broad industry consortium that promotes the commercial case for LNG as marine fuel, was among the first to respond to the damning report.
Like many advocates of gas-fuelled shipping, SEA\LNG describes LNG as “long-term bridging solution” to a zero-emissions shipping industry. It notes that bio-LNG from renewable and carbon neutral biogas sources including landfills and waste generators is already being used as a ‘drop-in’ fuel, significantly reducing GHG emissions. In the longer-term, ‘power-to-gas’ is a key technology with the potential to produce large volumes of renewable LNG.
For marine propulsion technologists, these points are key. However you characterise the emissions reduction impact of LNG, the development of engines that can use LNG is seen as a stepping stone to harnessing other, future fuels.
Rolf Stiefel, vice president sales and marketing, WinGD, notes that emissions reductions from its X-DF dual-fuel engines are unequivocal, providing low NOx as well as near-zero sulphur and particulate emissions. And he notes that emissions performance will only improve.
“In the grand scheme of things, we are at the very beginning of LNG as a marine fuel,” he says. “Continued optimisation and refinement are a guarantee as our technology continues to evolve and advance through the common goal of further emissions reductions.
Regarding the importance of LNG engine developments to the use of future fuels, Stiefel notes: “Bio-LNG or LNG produced through ‘power to gas’ could be readily used in LNG-fuelled vessels when available. We have also successfully tested a gas mix including Volatile Organic Compounds emitted from the cargo in crude carriers, and not presently used as a fuel source, on our X-DF engine.”
MAN Energy Solutions has also committed to investigating future fuels, using its dual-fuel ME-GI and ME-LGI engines as a base from which to examine the use of fuels including LNG, methanol, ethane, liquefied petroleum gas and propane – all of which pave the way for synthetic fuels.
Bjarne Foldager, vice president sales & promotion, two-stroke business, MAN Energy Solutions, explains: “We believe that LNG is ready now as an answer to the question of emissions, being far greener than conventional marine fuels. It’s one of the most promising alternative fuels that is competitive economically and in terms of available infrastructure.
“In the long run, we can’t really predict what the world will look like in 2050, but we think that synthetic fuels based on renewable energy will play an important role in even further decarbonising the shipping industry. In this respect, we are already closely collaborating with several industry partners on a number of research programmes.”
UMAS researchers argue that “deep questions remain” over the availability of bioenergy to meet all of shipping’s needs and cite uncertainties that it will be cheaply available as a gas and not as a liquid. Rather they express concern that use of LNG creates a “single path dependency and technology lock-in”.
Faig Abbasov, shipping officer, T&E, says: “LNG is not a bridge fuel, it’s an expensive distraction that will make it harder for the EU to achieve its shipping climate goals and reduce gas imports from places like Russia. Europe should back future-proof technologies that would deliver the much greater emissions reductions that will be needed, including port-side charging or liquid hydrogen infrastructure. This means the EU needs to stop mandating LNG infrastructure in European ports.”
Researchers’ focus on technologies that have yet to be commercialised is a flaw, SEA\LNG members believe “Today, LNG is the only scalable and economic alternative fuel available for the vast majority of deep sea ocean shipping. Alternative fuels such as hydrogen and ammonia are not economic, not available at scale, and unproven for shipping operations. They are called ‘future fuels’ for a reason.
“These future fuels will require huge investments by industry and governments over decades to realise their potential. SEA\LNG encourages and supports industry and government initiatives which would assist with the development of future technologies.”
Stiefel concurs. “LNG is the only available technology today which makes commercial sense for owners and operators to replace the commonly used residual fuels in shipping. In the meantime, we are, of course, striving to find even better solutions for future alternative non-fossil fuel sources so that when they are available as a viable, reliable source, the technology will be ready.”
The argument from advocates of LNG is clear. A ‘transition fuel’ is not just a stop gap until other technologies are discovered. In fact it readies ship owners to take up these technologies. Seen from that perspective, LNG is not a distraction but a useful point of focus.
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