Industry coalition SEA-LNG published its annual View from the Bridge report, highlighting 2024 as another year of growth for the LNG pathway.
Analysing data from SEA-LNG members, the report found that global market adoption and growth reached record heights in 2024. SEA-LNG reports annual vessel growth of over 33% to 638 LNG-fuelled vessels in operation worldwide today.
The state of play for the LNG pathway
- Around 6% of the global fleet by tonnage set to be fuelled by this clean marine fuel.
- Clean air benefits are significant and important: 95% reduction in NOx, negligible SOx and PM emissions.
- Reductions of up to 23% in Well-to-Wake greenhouse gas compared with traditional marine fuels.
- LNG bunkering available in 198 ports worldwide, with 61 LNG bunker vessels in operation.
- Liquefied biomethane already commercially available as a bunker fuel in 70 ports, worldwide.
- E-methane projects being developed in North America, South America, Australia, the Middle East, and Southeast Asia. First commercial availability as a bunker fuel in Europe in 2026.
2024: The year of growth for LNG
Today, there are some 638 LNG-fuelled vessels in operation worldwide, an increase of more than one third over the past year. By the end of 2028, the order book data suggests that this number will have grown to more than 1,200, nearly doubling in three years.
Once the LNG carrier fleet is included and taking the orderbook into account, vessels capable of utilising the LNG pathway currently represent about 4% of the global deep-sea fleet by numbers or over 6% when vessel deadweight tonnage (DWT) is considered.
LNG-fuelled tonnage is dominated by the container sector, with almost 60% of total DWT in operation and on order. This is followed by the tanker sector (26%); the bulk sector (11%) and the car carrier sector (4%).
According to DNV, LNG dual-fuel vessels make up one third of the newbuild orderbook. Nearly half of all container vessels ordered in 2024 will be LNG dual-fuel, and over 90% of new orders for car carriers have been LNG dual-fuelled.
In 2024 LNG dual-fuelled vessels accounted for 70% of alternative fuelled tonnage ordered, excluding LNG Carriers, up from 43% in 2023. Additional new buildings in future years are expected to continue to favour the LNG pathway.
LNG infrastructure growth
LNG bunker fuel availability continues to grow outside the traditional bunkering hubs. Clarksons reports that LNG bunkers are currently available in some 198 ports around the world, with bunkering facilities planned for a further 78 ports.
There are now more than 60 LNG bunkering vessels in operation in Europe, North America, Brazil, China, Singapore, Malaysia, Dubai, Japan, and Korea, with numbers having increased by 22% over the past year.
As more LNG-fuelled vessels have entered into operation, bunkering volumes have grown dramatically in key bunkering hubs. In the first three quarters of 2024, LNG bunkering volumes in Rotterdam grew by 44% to almost 680,000 tonnes compared to the same period in 2023. Singapore also saw a four-fold increase over the same period to over 300,000 tonnes.
Biomethane adoption
Liquefied biomethane (otherwise referred to as LBM, or bio-LNG) is the next step along the LNG pathway to decarbonisation. Building on LNG’s emissions reduction capabilities, the use of LBM as a marine fuel can reduce GHG emissions by an average of 80% compared to marine diesel on a full well-to-wake basis.
Moreover, it has the potential to meet about 13% of the energy requirements of the global shipping industry by 2050, even when demand from other industries is taken into account. Biomethane is produced by the natural breakdown of biomaterial: unlike biomethanol, which requires an additional industrial process to convert biomethane to biomethanol.
This means biomethanol is less energy efficient than biomethane and consequently is more expensive. For biomethane to truly contribute to decarbonisation it must be made from sustainable biomass resources. These resources do not interfere with food, fodder, or fibre production.
Furthermore, the report highlights that 2024 has seen considerable progress in addressing methane slip. While a legitimate historic concern, the industry has already made significant reductions in slip and estimates suggest it will not be an issue by the end of this decade.
We continue to believe that the shipping industry is heading towards a successful multi-fuel future where LNG will always play a critical role. To deliver net zero by 2050 across the global shipping fleet, a basket of fuels is required and the LNG pathway will continue to lead the way.
…said Peter Keller, Chairman, SEA-LNG.
Additionally, SEA-LNG analysis shows FuelEU Maritime supports the LNG pathway, with LNG-fuelled vessels achieving up to 23% GHG emissions reductions and staying compliant until 2039.
The use of liquefied biomethane and e-methane can extend compliance to 2050 and beyond.
Key takeaways from the analysis are:
- Operational costs are likely to be significantly higher for fleet operators under IMO and EU decarbonisation regulations. In the case of the VLSFO vessel, regulatory compliance will increase annual operating costs by almost 50% in 2025 and by more than 200% in 2040.
- The use of LNG, methanol, and ammonia dual-fuel engine technologies can reduce compliance costs.
- LNG dual-fuel vessels provide the lowest cost option. This is driven by the fact that they have lower GHG emissions than VLSFO in its fossil form and vessels can avoid using relatively expensive MGO for ECA compliance.
- LNG is able to comply with FuelEU Maritime until 2039 in its fossil form. Green fuels, i.e., liquefied biomethane, are only needed for compliance from 2040 onwards.
- Ammonia and methanol dual-fuel vessels operate mainly on VLSFO and MGO to 2040. They will need to use blue, bio, or electro fuels to ensure compliance with FuelEU Maritime from 2025 onwards.
- LNG fuelled vessels also have the best CII rating for the same vessel speed.
