THE environmental advantages of using liquid natural gas as a shipping fuel are undisputed, but costs are high and there is doubt whether it makes business.
These findings were contained in the preliminary results of a European Commission study that examines the European Union's policies aimed at reducing emissions from shipping and finding alternative energy sources given growing constraints on the use of heavy fuels.
A 2012 directive on sulphur content in marine fuels allowed the use of LNG as an alternative to comply with more stringent emission standards.
According to the findings, the major motivation for stakeholders to engage in LNG as a shipping fuel is to be compliant with Emission Controlled Area (ECA) zone requirements and the related positive environmental effects, reported American Shipper.
For many shipping companies LNG does not yet offer a profitable business model due to higher equipment costs for engines and tanks that are not offset by savings in fuel or operating expenses. Another barrier to implementation is the lack of existing bunkering infrastructure for LNG.
"This study gives us a solid overview of the opportunities and remaining challenges for the use of LNG for shipping," said maritime transport logistics unit chief at the European Commission, Sandro Santamato.
"More importantly, the outcome helps us to feed a public debate on LNG for shipping and provides arguments for a stakeholder debate at local level."
The study, due to become available in June, is being conducted by the European Commission's Directorate-General for Mobility and Transport, PwC and DNV-GL.
Source : HKSG.