By 2050 the global population is going to reach 9.7 billion people. In addition, the energy consumed is expected to increase by a third. In order to meet the goals of the Paris Agreement, Mr. Achuthanandam highlights that emissions should be halved.
Currently the maritime sector is responsible for 90% of the global trade, as well as for 3% of the total GHG emissions.
The IMO is committed to reducing GHG emissions from international shipping, which has emerged as a matter of urgency. It also aspires to reduce the carbon intensity by 40% by 2030 and cut total GHG emissions by 50% by 2050.
Commenting on how to achieve this, Mr. Achuthanandam says that we need to do three things:
- Use energy more efficiently;
- Use the cleanest possible, GHG efficient fuels that we can;
- Capture and remove the CO2 emissions that cannot be avoided.
The longer we delay the harder it will be for us to meet these goals. However, these is no silver bullet, and we will need more solutions for a potential poly-fuel future
However, LNG can make a difference today, and provide a pathway for the future. As he stated, LNG is cleaner, providing air quality benefits for emissions and supports the IMO 2020 targets.
It also has lower GHG emissions, thus supporting decarbonization ambitions and can potentially support the IMO 2030 ambition as well.
What is more, it is cost competitive, both against looking at conventional fuels, as well as the other alternatives that are being explored.
Of course, an important factor according to Krishna Achuthanandam, is that it is available today, while the resource is abundant and the infrastructure is growing rapidly.
In order to feel the pulse of the audience on LNG, DNV GL’s webinar conducted a survey, asking the question ‘What do you see as the biggest barrier for choosing LNG as a marine fuel today?’
34% consider availability to be the main issue, while another 30% believes that LNG does not provide enough environmental benefits. Moreover, 25% answered that they are reluctant due to the economics of the fuel.
Providing a comment on these results, Mr. Achuthanandam mentioned that regarding the environmental benefits:
LNG is the only scalable, low-carbon fuel available today, that helps us head towards carbon neutrality in shipping. It also has no Sox emissions and reduces NOx significantly
He added that from a GHG perspective, it provides 21% well-to-wake emissions reductions compared to conventional fuels. This means that by converting one ship to LNG, it is equal to reducing 500 heavy duty tracks off the road.
LNG is cost competitive
Furthermore, LNG is also competitive to the new fuels that are being explored. Namely, Mr. Achuthanandam stated that there is plenty of LNG gas available in the world, while new projects are coming on stream all the time. In addition, traditionally the price of LNG has been below MGO and close to HFO.
Currently, global LNG capacity stands at 399 million tons per annum, which is more than the global marine fuel consumption, with the supply expected to grow by 2025. Furthermore, the number of LNG bunker vessels doubled last year to 8, which are further expected to more than double in the next five years.
How can LNG provide a pathway for IMO 2030 and 2050 ambitions
So, what benefits does LNG provide, to achieve IMO 2030 and 2050 ambitions.
Well, according to Krishna Achuthanandam, LNG-fueled engines can provide up to 21% GHG savings, against conventional fuels.
He further noted that, by using bio/sunthetic LNG blending, shipping can achieve a further reduction of 11-15%, thus getting closer to the 2030 ambition.
Regarding Bio-LNG, it is slowly picking up as decarbonization measure in the road sector, but it is still in the initial stages at the maritime sector, given the scale required.
Another option could be to use offsets as a possible pathway, according to Mr. Achuthanandam, but this would require acceptance by the IMO.
He concluded by stating that LNG is chemically identical to bio-LNG, allowing for the possibility to leverage existing infrastructure, which could be available globally in the future.
Finally, DNV GL asked the audience if they believe that LNG provides a credible pathway to decarbonization.
62% answered yes, with 24% remaining unsure about the future of the fuel, and 13% saying that LNG will not be a credible pathway to decarbonization.