Transparency Market Research has released a new market report titled LNG Bunkering Market: Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 – 2025. According to the report, the global consumption of bunker fuel stood at 70 kilo tons in 2013 and is expected to reach 22,540 kilo tons in 2025 at a CAGR of 63.6% from 2014 to 2025.
LNG is an attractive bunker fuel option for many shipping companies operating in the Emission Control Areas (ECAs). The price of LNG bunker fuel is significantly lower than any other ECA complaint fuels available in North America and Europe. However, the development of LNG bunkering infrastructure is restricted to a few countries in Northern Europe such as Norway and Sweden. LNG bunkering infrastructure has only developed in ports around the Baltic Sea, North Sea, and English Channel, as shipping companies operating in these areas face stiff sulfur regulations. An anticipated tightening of sulfur emission norms and a widening gap between natural gas prices and other conventional fuels are major drivers for the development of LNG bunkering infrastructure in these regions. Natural gas providers are gradually expected to increase investments in LNG bunkering facilities as several ship owners have taken initiatives to use LNG as a bunker fuel.
Currently, Northern Europe hosts most of the region’s LNG bunkering stations, which are specifically designed to cater to the fueling requirements of inland vessels and large ships docking at ports within ECAs. The initiatives taken by different port authorities and the financial assistance provided by the European Union has led to the development of LNG bunkering facilities around major trading centers in Europe. Low natural gas prices in North America are likely to boost the sales of LNG bunker fuel in the North American ports. In Asia Pacific, countries such as China and South Korea have invested substantially for developing LNG as a bunker fuel. However, no strict sulfur emission regulations are anticipated to be enforced before 2020 in this region. As a result, demand for LNG bunker fuel in Asia Pacific is anticipated to grow from 2020 onwards.
Marine vessels consuming LNG bunker fuel have been broadly segmented into tankers, bulk and general cargo vessels, container ships, and ferries & offshore support vessels. Presently, ferries & offshore support vessels account for the major consumption of LNG bunker fuel globally. Ferries, including passenger ships, spend maximum amount of voyage time within the ECAs. As a result, shipping companies operating these vessels are slowly shifting from conventional engines to LNG fueled vessels. Container vessels and tankers are anticipated to significantly adopt LNG as a marine fuel in the next few years. Rising container traffic in Asia Pacific and Europe is one the factors anticipated to lead to the adoption of LNG as a bunker fuel.
Source: Transparency Market Research
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