The Future of LNG-Powered Shipping
LNG bunkering grows to record highs as shippers diversify fleets for the future of emissions-targeting regulations
Mobius Intel Brief:
LNG represents a small but rapidly growing share of total bunker fuel sales at major global ports, spurred by shipping firms’ efforts to diversify fleets beyond refined petroleum products ahead of emissions-penalizing policies.
While more susceptible to price volatility, shippers are optimistic about the growth in LNG supplies from major suppliers like the United States, Qatar, Australia, and Russia.
LNG bunkering has already reached records at two of the world’s biggest ports, Rotterdam and Singapore, adding long-term headwinds to petroleum demand for bunkering but bullish tailwinds to global natural gas consumption.
The Future of LNG-Powered Shipping
Global shipping firms are preparing for an onslaught of Western regulations on logistics-related emissions. However, finding economic alternatives to the industry’s dominant petroleum-derived marine fuels poses a considerable hurdle.
While a far cry from environmentalists’ desired outcome, logistics companies are increasingly pursuing a lower-emitting but still energy-dense hydrocarbon bunker fuel:
Liquefied natural gas.
Improved emissions intensity over petroleum fuels, relative abundance, established supply chains, and ease of transport are notable differentiators for LNG’s role in the future of seaborne transportation over alternatives like biomass-based distillates or ammonia.
And vessel adoption rates are substantiating that argument.
Though substantially smaller than the petroleum-powered fleet, the global LNG-powered vessel fleet is estimated at over 2,400, with another 1,000 remaining to be delivered1 — roughly 3% of the world’s merchant armada.
Furthermore, easing costs support LNG’s role in powering a diversified logistics fleet.
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