Cap on sulphur emissions to drive global demand for LNG as shipping fuel

DUBAI - Demand for LNG as a conventional source of energy in the maritime industry will continue to grow because of its technological advantages in meeting the standards and requirements in limiting the emissions of sulphur, a greenhouse gas. According to marine fuel expert Sergey Ivanov, the global sulphur cap of 0.5%, which is set to be implemented by the International Maritime Organization (IMO) next year, could drive the global uptake on LNG as bunker fuel.

The new regulation will have an impact on up to 70,000 ships around the world once it comes into effect on January 1, 2020. Vessel operators are expected to turn to cleaner fuels to meet their targets and global environmental commitments.

Ivanov, director of Marine Bunker Exchange AB, noted LNG’s availability and competitiveness have the potential to lead as a major alternative to other heavy fuels once the new environmental regulation on maritime emissions is in place.

Ivanov said, “While different technologies can be used to comply with air emission limits, LNG technology is the only option that can meet existing and upcoming requirements for the main types of emissions such as sulphur, nitrogen oxides, particulate matter, and carbon dioxide. LNG can compete price-wise with distillate fuels and, unlike other solutions, in many cases does not require the installation of additional process technology.”

Studies have shown that there is already a rising demand for LNG with more than 10 per cent of the world’s fleet to be powered by natural gas. The Middle East is one of the major sources of LNG, accounting for 94 million tons, or about 30% of the world’s supply coming from the region in 2018, with the UAE and Oman among the leading exporters.

Ivanov further explained that there has to be sustained awareness about the benefits of LNG as it remains less known across the world, including the associated risks with it and how they can be dealt with such as safe and reliable logistical concepts, considering that there is an increasing transition as well to natural gas in general consumption including heating and electricity generation.

Ivanov said, “To serve as a fuel on regular shipping or transport connections, LNG must be delivered where it is needed and when it is needed in the volumes required. It is, therefore, very important to address these matters – to have the necessary competence, knowledge and skills. Decision makers in governments, authorities and companies need to understand the subject of their decision-making and the consequences of the decisions they make when it comes to the application of LNG.”