04 July 18 The Business Times by DAVID HUGHES
IT IS not often I find myself agreeing with campaign group Transport & Environment (T&E). But I have to say it has a point, to an extent, when it argues that natural gas is a "US$22 billion distraction for European Union (EU) shipping that won't decarbonise the sector".
T&E had commissioned an independent EU-focused study, done by the UMAS consultancy, which notes that Europe has so far spent US$500,000,000 on LNG infrastructure for refuelling ships; it also notes that LNG bunkering infrastructure for shipping in Europe will eventually cost US$22 billion and deliver, at best, a 6 per cent reduction in ship greenhouse gas (GHG) emissions by 2050, compared to the diesel it will replace.
The findings are relevant beyond Europe. LNG bunkering projects are underway around the world, including in Singapore.
The campaign group, citing research, argued: "These meagre emissions savings would likely be cancelled out by the growth of maritime trade, even before possibly higher rates of methane slip are considered."
A recent US study found methane slippage rates are 60 per cent higher than previously estimated.
The EU's 2014 Alternative Fuels Infrastructure Directive requires member states to build a comprehensive LNG infrastructure across European ports, thus paving the way for a large LNG market.
The study warns that the EU programme will make the decarbonisation of shipping an even more challenging transition for the industry.
In April, the International Maritime Organization (IMO) agreed that international shipping must decarbonise and at least halve its GHG emissions by 2050.
The study concludes that if investments in LNG infrastructure are made now, expecting a large LNG market for shipping, but the sector is subsequently required to switch to zero-emission technologies such as hydrogen, ammonia and electric propulsion in order to decarbonise, then significant LNG assets (feeders, barges and storage tankers) will likely become stranded by 2050.
Faig Abbasov, shipping officer at T&E, said: "LNG is not a bridge fuel. It's an expensive distraction that will make it harder for the EU to achieve its shipping climate goals and reduce gas imports from places like Russia.
"Europe should back future-proof technologies that would deliver the much greater emissions reductions that will be needed, including port-side charging or liquid hydrogen infrastructure. This means the EU needs to stop mandating LNG infrastructure in European ports."
Domagoj Baresic, a consultant at UMAS and a PhD researcher at the UCL Energy Institute, said: "There is an uncertain future demand for LNG as a marine fuel over the next 10 years. On the one hand, it is an option for complying with the 2020 sulphur cap, but as it cannot enable the GHG reductions that have been committed to in the IMO's initial strategy for GHG reduction, and the Paris temperature goals more generally, it is clear its role in shipping's transition to a low-carbon future can only be transient."
T&E is too dismissive of LNG as a marine fuel. It certainly is one way of meeting sulphur and nitrous oxide emissions limits for ships. And LNG bunkering infrastructure can often be an add-on to LNG facilities for land-based uses.
However, whether to switch to LNG ought to be a market-based decision.
Subsidising the construction of LNG infrastructure distorts the market. Where LNG bunkering can be developed based on a realistic expectation of sustainable returns, then there is no problem. The EU appears to be taking a much more interventionist approach than that.
Incidentally, the UK has just found its dependence on carbon dioxide (CO2), which eventually finds it way into the atmosphere, is much more deeply entrenched than most of us realise. It just so happened that most of the country's plants that produce CO2 shut down for maintenance at the same time, creating an acute shortage of the gas.
Suddenly brewers found they couldn't produce beer, abattoir operators couldn't stun livestock and bakers couldn't make dough rise. The shortage is temporary, but is a reminder that while shipping's CO2 emissions are coming under considerable scrutiny, the rest of society has got a long way to go in that respect too.