With a little less than a year before the entry into force of the 0.50% sulphur requirements, the use of Liquefied Natural Gas (LNG) in shipping is one of the most stimulating topics in the maritime industry. For about a decade now, LNG as an alternative fuel for shipping has been increasingly adopted as a strategy for environmental compliance, either sailing or at port.
With an immediate and significant impact on the reduction of Sulphur Oxides emissions (SOx), Particulate Matter (PM), and also of Nitrogen Oxides (NOx), the use of LNG as fuel in maritime transport is an attractive option for complying with the requirements of the revised MARPOL Annex VI, and, in the European context, the Sulphur Directive (2016/802/EU).
For some time, LNG vessels were mainly operating in the short sea shipping sector, such as the ferry market or platform supply vessels. However, other market segments are increasingly taking advantage of the benefits offered by LNG as marine fuel. The recent order of ultra-large LNG powered container ships and the delivery of LNG cruise ships are clear indications of the maturity of this technology and its potential for supporting the sustainability of the sector.
Europe is becoming a leader in the use of LNG in the maritime sector. The Commission has supported the LNG deployment in the maritime sector through a package of measures, covering regulatory aspects, technical issues and financial support.
In addition to the Sulphur Directive, which provided a strong incentive for the use of cleaner fuels in the maritime sector, the European Union has adopted in 2014 its Alternative Fuels Infrastructure Directive (2014/94/EU), which establishes a clear obligation for EU Member States to make LNG available in the maritime ports of the Trans-European Network of Transport by 31 December 2025 at the latest. The Directive also covers inland ports, which would need to provide LNG bunkering infrastructure by 31 December 2030 at the latest. Following the provisions of this Directive, Member States are in the process of preparing their National Policy Frameworks to establish more than 250 LNG refuelling points until 2025.
In order to support the maritime sector in meeting the requirements of the Sulphur Directive, the Commission has also established an expert group, the European Sustainable Shipping Forum (ESSF), to serve as platform for addressing technical issues faced by the Member States and the maritime industry. Since its creation in 2013, a significant part of the ESSF activities has focused on the development of LNG. It served as a platform to discuss LNG-related issues, such as safety aspects, training needs, methane slip and gas quality, as well as results from EU funded R&D Projects. The forum also offered specific recommendations, notably on the need to develop an international standard for LNG Bunkering Connectors or a proposal for a standard format for LNG delivery notes.
One of the latest ESSF's deliverables has been the publication by the European Maritime Safety Agency (EMSA) of LNG Bunkering Guidance to Port Authorities and Administrations, dealing with the development, evaluation and control of LNG bunkering activities. By providing a review of the applicable framework and of good practices for LNG bunkering, the guidance becomes an additional element in the EU strategy to support the deployment of alternative fuels for shipping.
Last but not least, the Commission has strongly supported the deployment of alternative fuels, and in particular LNG, through financial schemes. In the current multi- annual financial period (2014-2020), investments in LNG deployment projects represented nearly 12% of the entire maritime portfolio under the Connecting Europe Facility, the key EU funding instrument for infrastructure investment. In addition, the European Investment Bank has set up in 2016 the Green Shipping Guarantee Programme, to provide financial guarantee through the Connecting Europe Facility Debt Instrument and the European Fund for Strategic Investments (EFSI) for maritime green solutions. The first transaction signed under the Green Shipping Guarantee Programme dealt with the order of an LNG vessel in France.
Nevertheless, a number of challenges remain for further expanding the use of LNG in the maritime sector. These include the lack of commonly available LNG refuelling points; the relatively high investment costs for retrofitting existing ships, as well as for construction of new vessels; the overall planned fuelling capacity, which seems to be distributed unevenly across the Member States; and the problem of uncontrolled methane emissions (methane slip).
One limitation of LNG, is that while being an excellent solution for air pollution, it does not have a major impact on greenhouse gas (GHG) emissions and can only be transitory solution towards zero-carbon fuels. Nevertheless, the investment in LNG is a positive route to follow. It delivers a satisfactory solution to the upcoming challenges on air pollution and its limited CO2 savings can still help the sector in initiating the transition towards low emissions solutions.
In addition, and more importantly, alternative fuels are likely to play an important role in the basket of measures that the shipping sector will have to use to deliver its GHG reduction strategy. The accompanying measures to support the deployment of LNG could be used as a blueprint for similar actions with respect to low-carbon fuels.