LNG - THE TRANSITION TO HIGHER EMISSIONS

A new study estimates that the EU has, to date, spent $250 million on Liquefied Natural Gas (LNG) projects in the marine sector, providing partnership funding to private interests that support a total of $500 million investment.

potentially increasing emissions from shipping

The study, by UMAS, finds that this half-billion dollars spend will, at best, have no significant climate benefits and could potentially increase greenhouse gas emissions from shipping. LNG is incapable of helping shipping achieve the emissions reductions required under the recently adopted International Maritime Organisation (IMO) strategy on reducing GHG emissions from ships.

Sulphur compliant but ...

LNG is an option for complying with the 2020 sulphur cap but by focussing on short-term improvements to air pollution and replacing heavy fuel oil with LNG it locks-in non-sustainable - in both commercial and environmental terms - fossil-fuel infrastructure for decades to come.

A switch to LNG could increase GHG emissions from shipping when upstream emissions are included in the measurements. LNG infrastructure leaks methane, a much more potent GHG than CO2, making the overall climate impact of LNG worse.

GHG emission cuts only possible with non-fossil fuels

Reducing total annual emissions from shipping in-line with the initial IMO strategy objective - at least 50% GHG reduction by 2050 on 2008 levels - and the Paris Agreement temperature goals, is only possible with a switch to increased use of non-fossil fuel sources from 2030 at the latest and with rapid growth thereafter. Options include a mix of wind and solar, hydrogen, ammonia, battery electrification, all of which need significant investment to be able to get to market within the next 12 years.  

Sustainable biofuels – providing they can be sourced in a highly competitive market where all other segments are seeking low-carbon fuels - could play a part in the future fuel mix. As blends with HFO they might help to extend the timescale for the introduction of primary renewable energy and synthetic fuels like hydrogen and ammonia. 

LNG as transitional fuel ...well maybe not

Many proponents argue that LNG is a transitional fuel and a natural precursor to biogas (biomethane) produced from waste. However, deep questions remain over the availability of such bioenergy to meet all of shipping’s needs, and uncertainties that it will be cheaply available. The ‘LNG as a transition fuel’ argument seriously risks future pathways to decarbonization, creating a single path dependency and technology lock-in.

Encourages out-of-sector investment

If the current investment in LNG as a marine fuel continues then reducing total annual emissions from shipping in-line with the initial IMO strategy objective could only be possible through GHG reductions being made by offsetting – that is buying carbon credits from other sectors who are reducing emissions. This means finance flows out of the shipping sector, funds that might have been better spent creating in-sector real GHG reductions and improving the industry’s own commercial resilience. By relying non-shipping carbon markets the industry is dependent on the linkages providing sufficient access to low cost out-of-sector emissions reductions, something which is currently highly uncertain.