Shipowners need incentives to embrace LNG

Governments will likely need to provide lucrative economic incentives to shipowners, ports and refiners before the maritime sector fully embraces liquefied natural gas (LNG) as a new, cleaner-burning bunker fuel, industry officials said. With crude oil surging towards US$100 and pressure building for the shipping industry to drastically reduce its emissions, supporters of LNG have promoted the energy resource as the best option to fuel seaborne trade. “In the next 10 to 30 years, LNG will be the best alternative from a financial and environmental point of view,” said Remi Eriksen, chief operating officer for Norway’s maritime risk management firm Det Norske Veritas (DNV). “But to have full scale LNG use, with 50% of vessels using it, you need some government intervention.” Only 23 non-LNG transport vessels, mostly ferries, currently use LNG as fuel. All of them operate in Norway, although two more were expected to be built in Australia. That number could skyrocket in the next few years with the U.S. and European governments implementing strict bunker fuel regulations for ships traveling along its coastlines. Vessels operating in so-called emission controlled areas (ECAs) will be restricted to using fuel that contain 0.1% sulfur by 2015, down from the current global average of 2.7%. (January 17, 2011)