SEA-LNG hits back against World Bank report on shipping fuels

LNG bunkering association SEA-LNG has criticised a recent report by the World Bank that concluded that ammonia and hydrogen were the most promising zero-carbon fuels on the market while LNG would play only a limited role in decarbonisation. Urging the take-up of LNG now, SEA-LNG said it was a mistake to wait until these fuels become affordable.

The World Bank also called for countries to avoid providing more support policies for LNG as a bunker fuel and consider removing existing ones.

"The research finds that LNG is likely to be used in niche applications like on pre-existing routes or in specific vessel types only," the World Bank said. "For a transitional role, liquefied biomethane and liquefied synthetic methane are the only zero-carbon bunker fuels that could reuse existing LNG infrastructure, but neither of them is expected to have a significant share of the fuel market in the long term."

Furthermore, the bank said the greenhouse mitigation benefits of LNG were uncertain, and that countries and businesses that invest in LNG to meet International Maritime Organisation (IMO) emissions standards were taking on considerable risk, "including unnecessary capital expenditure, stranded assets, and technology lock-in."

SEA-LNG, which recently commissioned an independent study showing that LNG could achieve emissions reductions of up to 23% versus diesel, disputed the bank's findings, however. Waiting for future fuels like hydrogen and ammonia to become commercially viable instead of opting for LNG now "is a mistake," the association said

"SEA-LNG believes strongly that the transition to future fuels must not follow this prescriptive approach," it said. "It is far too early to decide what the real potential of various alternative fuels will be for a highly-complex, hard-to-abate, global industry."

Investing in LNG, which can already help shipowners reduce their emissions, is low risk, especially considering the options of bio-LNG and synthetic LNG that will become more greatly available at a later stage, SEA LNG said.

"By focusing on theoretical, unproven solutions, the World Bank stifles innovation in technologies that can also provide answers in the decades ahead," SEA-LNG continued. "We strongly encourage all institutions around the globe that have a place in the policy debate to set standards and targets that drive real and immediate reductions in GHG emissions, and not prescribe specific technology solutions that are untried and unproven in the real world." 

Call for action

Shipping bodies BIMCO, CLIA, International Chamber of Shipping and World Shipping Council, and other industry groups, meanwhile called on the UN this week to bring forward discussions about how the maritime industry can decarbonise. Specifically, they want world leaders to discuss market-based mechanisms to help fleets transition to new fuels and technologies that are more expensive than those used today.

The industry wants progress in talks on carbon pricing, which would give shipowners a greater incentive to switch from dirtier fuels, and has proposed the creation of a $5bn research and development fund to finance the sector's decarbonisation efforts.

"The ability to consider different candidate measures in parallel will be critical if we are to move forward with the urgency that the challenge of decarbonising shipping requires, given the urgent need to make progress on developing our levels of ambition," the shipping bodies said in a joint submission to the UN on April 21.

The plea comes ahead of the virtual Leaders Summit on Climate that will be hosted by the US on April 22 and 23. Washington has invited 40 world leaders to attend the event.