LNG remains top choice for dual-fuelled vessels in shipping, says Rystad

KUALA LUMPUR (April 18): Liquefied natural gas (LNG) remains the fuel of choice for lower-carbon shipping, despite the rise in orders for vessels equipped with dual-fuel methanol and ammonia engines, according to Oslo-based Rystad Energy.

In a statement on Wednesday, the firm said while question marks remain around just how environmentally friendly LNG is as a shipping fuel, its price competitiveness, abundant supply and well-developed infrastructure give it an advantage over the alternatives.

It said this is particularly evident with LNG bunkering — fueling ships with LNG.

Rystad said more than 2,400 vessels are equipped to operate on LNG globally, with another 1,000 vessels ordered yet to be delivered.

LNG remains top choice for dual-fuelled vessels in shipping, says Rystad

The consulting firm highlighted that half of the operational LNG-fuelled vessels are LNG carriers.

It said these ships use boil-off gas as fuel, reducing their reliance on external LNG bunkering.

Rystad said even excluding LNG carriers, the fuel remains the most common choice for dual-fuel ships in the global fleet.

Car carriers have emerged as a significant driver of LNG adoption in the shipping industry, alongside container ships and LNG carriers.

Rystad said more than 75% of new car carrier orders in 2023 were for dual-fuel LNG engines.

It said many of these new ships can be adapted to use alternative clean fuels, such as ammonia or methanol, outling a commitment to long-term sustainability.

Rystad senior analyst  Junlin Yu said despite the growth in LNG-fuelled fleets and bunkering, methane slip (gaseous methane emissions) is still a significant challenge for the maritime sector.

He said methane slip occurs when unburned methane escapes into the atmosphere.

“It is a critical concern for the industry and needs to be addressed if the environmental benefits of LNG are to be fully realised.

“Methane slip can occur not only during the combustion process in ship engines but also during the bunkering process.

“This is heavily influenced by the quality of infrastructure and the efficiency of the technology employed.

“The industry must work closely with regulators and policymakers to establish strict standards and best practices for bunkering operations. Implementing effective monitoring and reporting mechanisms to track and mitigate methane emissions across the supply chain is paramount,” said Yu.