The New Fuel of the Shipping Industry: Is it Really a Good Idea?

Marine gas oil (MGO), marine diesel oil, and other refined and crude oils are the most common fuels that power the global shipping industry’s thousands of ships. These fuel types have been around for decades but, as of recently, they have been the focus of climate change activism in the maritime industry and far beyond due to their significant CO2, sulfur oxide, and nitrogen oxide pollution contributing to global warming.

Due to the increasingly stringent emissions regulations set forth by the International Maritime Organization (IMO), such as its deadline to cut global marine carbon emissions to 50% of 2008 levels by 2050, shipping operators have already been considering alternatives to conventional fuels for propulsion. So, what is the new fuel that is taking the market by storm? Liquid natural gas, which we’ll refer to as LNG. Despite the many vessel operators feeling the pressure to abide by these regulations, there is a strong, rising question in the industry of whether or not natural gas could be a step forward to a greener future. Some LNG engine manufacturers, such as Kongsberg, claim that total greenhouse gas (GHG) emissions of LNG are roughly 22% lower than comparable diesel engines, even with the effects of methane slip – the most significant downside of the alternative. 


Focusing on the non-environmental aspects of the up-and-coming fuel, it seems as if it could be a worthy successor to MGOs. Since engines powered by LNG are just as responsive, much cleaner, need significantly less maintenance, more efficient, and powerful with respect to their Diesel counterparts according to Kongsberg, they make for a very attractive alternative to the current norm. However, many shipowners and industry observers are skeptical that the maritime industry will be able to accomplish the IMO’s goal on time. These skeptics cite the early development stages of new propulsion systems currently in development. 

CMA CGM SA, one of the world’s largest container ship operators, bet big on LNG by recently placing an order for 22 LNG-powered ships, nine of which being megaships that will be among the largest cargo vessels roaming the seas. “We are fully convinced that LNG will be a key factor in our business,” said vice president Xavier Leclercq at CMA CGM, “Our clients, the big ones, like Amazon, Walmart, Nike, IKEA, they are asking us for solutions in decarbonizing. We want to be that solution.” CMA CGM is not alone in this movement either; major carriers such as Japan’s NYK Line and Mitsui O.S.K. Lines, Norway- and Singapore-based BW Group, New York-listed Teekay Group, and others are also operating ships powered by LNG. Although LNG alone will not be enough to take ship operators towards the nearly carbon-free goals of the IMO, the DNV GL, a Norwegian-based ship classification firm, estimates that the use of LNG has the potential to reduce CO2 emissions by around 20%.


The economics of fuel is another significant role in favor of the change. Although building LNG-powered vessels costs roughly 15% more than their conventional MGO counterparts, fueling costs are up to 20% cheaper and could become even more cost effective as natural gas production continues to grow. “It pays after the investment to build such ships,” Mr. Leclercq said, “I see LNG as the best available solution over the next 20 years.” Also due to the abundance of natural gas from hydraulic fracking, LNG is becoming the increasingly economical choice for shipping companies to use as fuel. On top of this, LNG emits much less CO2, sulfur oxides, and nitrogen oxides than MGO. Apart from the methane leaks (also referred to as methane slip) from ships, natural gas production, and infrastructure, LNG is better for the environment. However, the leaks are much worse for the atmosphere – outweighing the benefits from the lower CO2emissions.

The idea of utilizing natural gas is under intense scrutiny by climate activists due to methane slip, which is 80 times more potent than CO2. According to a study conducted by the International Council on Clean Transport (ICCT), due to the fact that it is mostly methane, LNG is a potent GHG that traps 86 times more heat in the atmosphere than an equivalent amount of carbon dioxide over a 20-year period. It must be noted that this report encompasses the upstream emissions from leakages during extraction, processing, and transport, or namely the entire lifecycle of the gas, though the numbers speak for themselves. “If even a small amount of methane escapes anywhere along the process of extracting it from the earth and burning it in an engine, using LNG could emit more life-cycle GHGs than conventional fuels,” – ICCT. 

According to the study, over a 100-year time frame, the maximum lifecycle GHG from LNG is 15% less than conventional Marine Gas Oil (MGO), but this is only from the most high-tech engines running on LNG. The same study on a 20-year timeline (considered more relevant to the current climate goals of the International Maritime Organization) sees 4% more total lifecycle GHG from LNG compared to that of MGO. The authors of the study had this to say about the results of their research: “Given this, we conclude that using LNG does not deliver the emissions reductions required by the IMO’s initial GHG strategy, and that using it could actually worsen shipping’s climate impacts.” They furthered their conclusion by stating that investing in energy-saving tech, zero-emission fuels, and other new technologies would be more effective in seeking air quality and climate benefits:

“If we are serious about meeting the Paris [climate] agreement, temperature goals and decarbonizing the international shipping industry as part of that, then a switch to LNG as a marine fuel is counterproductive,” 

Bryan Comer, ICCT researcher and a co-author of the ICCT study

A study funded by the environmental group found that 3.7% of methane passed unburned through the most common LNG engine used in the shipping industry and onto the atmosphere. This 3.7% is significantly higher than the 2.3% of methane leaks found across the rest of the natural gas sector (encompassing those from gas wells, pipelines, storage facilities, and other infrastructure). However, recent regulations from the IMO explicitly expressed more stringent regulations on sulfur and nitrogen oxides due to the pollutants’ direct effect on the health of the crew, passengers, and port communities of the shipping industry –inexplicitly favoring the use of LNGs over MGOs by focusing on the physical health of the immediate community of the industry rather than the wellbeing of the earth’s atmosphere.

Despite the fact that LNGs made up less than 3% of ship fuel consumption from 2013-2015, estimates predict that the usage of the up-and-coming fuel could grow quickly. “It could grow into a really significant issue so it’s really something we have to get a handle on right now,” said Director of international climate for the Environmental Defense Fund Aoife O’Leary, “If you are asking countries and shippers to do an infrastructure investment twice, that obviously is going to be much more difficult and you are going to get a lot more opposition.” Experts say that the industry and the IMO should take action against LNGs while they still can in an attempt to shift the focus of innovation from changing the pollutants emitted (MGOs to LNGs) towards zero-emission solutions such as batteries, wind-assisted propulsion, and hydrogen fuel cells. Evidently, switching to these alternatives could bring the shipping industry closer to the IMO’s and the Paris Climate Accord’s goals and quicker.

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