The likelihood of sanctions from Brussels will add to pressure on operators to opt for LNG, as regulation grows tougher by the month
When the last of the 15 LNG carriers built for the Yamal project slipped into the water in mid-December 2019, the occasion marked another milestone in the fast-growing emergence of LNG as the fuel of choice for newbuilds.
A six-year project, the Teekay and China LNG-owned Yakov Gakkel bristles with the latest technology to guide it safely on its year-round voyages through the Northern Sea Route. Built to Arc7 ice-class standards like its 14 sister ships, the vessel has a capacity of 170,000 m3 and features marine technology group ABB’s Azipod electric propulsion system, that can spin 360 degrees, boosting the ship’s manoeuvrability in thick ice.
As a bonus, explains ABB, the system can deliver fuel savings of up to 20% compared to traditional shaft-line propulsion.
The completion of the 15-vessel contract demonstrates how far LNG has come in a few short years. By 2022, CMA CGM will be running a 20-strong fleet of LNG-fuelled container ships in what the class society Bureau Veritas describes as “a turning point in industry adoption of LNG as a marine fuel”. In another vote of confidence for what many see as the key interim fuel, over the next decade more than 20 LNG-powered cruise ships will hit the water for companies such as MSC Cruises.
But despite a scramble to provide bunkering services, infrastructure remains a concern: “Many key bunkering ports do not yet have a solution in place and bespoke solutions to secure LNG as a marine fuel are still necessary,” points out Bureau Veritas sustainable shipping expert Martial Claudepierre.
The gaps are however being plugged; CMA CGM’s vessels will be bunkered by an 18,600 m3 vessel chartered by Total and operated by MOL. Behind the scenes, many ports are hastily putting in place infrastructure and measures to service the growing LNG-fuelled fleet. Bunkering technology is also advancing on several fronts at once, including simultaneous refuelling and offloading (simops) which speeds up turnarounds for vessels in a hurry, such as container ships, ferries and cruise ships.
Meantime, the first day of 2020 was just the start of a series of cleaner-shipping deadlines that, running for the next 30 years, will greatly boost demand for LNG until zero-carbon alternatives become available in the required volumes. Imposed by IMO, ports and state authorities, the regulations demand a reduction of at least 40% in CO2 emissions by 2030 compared to 2008 levels. And that target is anchored on the minimum requirement of a 0.50% sulphur cap that can only currently be achieved by LNG or very low sulphur-fuelled vessels.
Brussels has also begun to apply pressure. The new president of the European Commission, Ursula von der Leyen, promised in mid-December to make Europe the first climate-neutral continent by 2050, starting as soon as possible with an emissions trading programme – in itself a form of penalty. The International Monetary Fund has estimated that a shipping carbon tax of US$75 a tonne of CO2 in 2030, and $150 in 2040 would slash maritime’s CO2 emissions by nearly 15% in 2030 and 25% by 2040, although at a price.
If nothing else, an emissions trading scheme in Europe should trigger a rush to LNG.