The International Maritime Organization confirmed in 2016 the introduction of a global sulphur cap in 2020, establishing a 0.5% sulphur content limit in fuels. All shipping companies operating in international waters will be affected by this emission regulation. LNG as a maritime fuel is widely thematised in current discussions regarding alternatives to achieve compliance, as it brings in the most significant environmental benefits. However, the current LNG-use is scarce, as vessels operating with LNG accounts for ca. 0.1% of the global fleet, and are mainly located in the Baltic region. To gain significance as a marine fuel, LNG has several challenges to overcome. LNGs main hurdle is the lack of bunkering infrastructure, which discourage its adoption by shipping companies, generating the so-called chicken-and-egg problem. Although small-scale bunkering facilities are already available, mostly in Northern Europe, the required infrastructure for large vessels is not provided.
This study looks at the relevance of LNG as a maritime fuel with the focus on the forthcoming global sulphur cap, from the perspective of a small and a large shipping company, in their decision-making to achieve compliance. Thereby, major drivers and impediments considered by both shipping companies for its adoption as well as their forecast regarding the future of LNG in the shipping industry are discussed.
Table of Contents
1 INTRODUCTION
1.1 RESEARCH PROBLEM
1.2 AIM
1.3 METHODOLOGY
2 THE SULPHUR OXIDES LIMITS
2.1 REGULATION 14 OF MARPOL ANNEX VI
2.2 0.5% GLOBAL SULPHUR CAP BY 2020
2.3 IMPLICATIONS FOR THE SHIPPING INDUSTRY
3 LIQUEFIED NATURAL GAS
3.1 DEFINITION
3.2 LNG AS AN ALTERNATIVE ENERGY SOURCE FOR COMPLIANCE
3.3 GLOBAL LNG TRADE
3.4 LNG BUNKERING
3.5 ADVANTAGES AND DISADVANTAGES OF LNG FOR SHIPPING COMPANIES
4 CASE STUDIES
4.1 THE SMALL SHIPPING COMPANY
4.2 THE LARGE SHIPPING COMPANY
4.3 MAIN FINDINGS
5. CONCLUSION
5.1 SUMMARY
5.2 CRITICAL ACCLAIM
5.3 OUTLOOK
Objectives and Topics
This thesis examines the relevance of Liquefied Natural Gas (LNG) as a viable fuel alternative for the shipping industry to meet the requirements of the global 0.5% sulphur cap enforced by the International Maritime Organization (IMO) in 2020. The research aims to evaluate opportunities and barriers for LNG adoption by comparing the strategic decision-making processes of a small and a large shipping company.
- Regulatory impact of the IMO MARPOL Annex VI and the global sulphur cap.
- Technical and economic evaluation of LNG versus traditional fuel oil and scrubbers.
- Infrastructure challenges and the "chicken-and-egg" problem in global bunkering.
- Comparative case study analysis of fleet management and compliance strategies.
- Future perspectives on sustainable maritime propulsion and multi-fuel scenarios.
Excerpt from the Book
3.4 LNG bunkering
For LNG bunkering, three different methods exist: shore to ship transfer, truck to ship transfer and ship to ship transfer. In shore to ship transfer, ships are fuelled with LNG directly from a fixed bunkering location through a refuelling arm. Additionally, secondary small fixed storage units can also be used, whether onshore or floating. The LNG is stored in LNG storage tanks. The tanks can be refilled via trucks or ships, but also pipelines from the LNG terminal to the fixed port facility is an option. (Semolinos et al, 2013, p. 12, p. 13) This method requires high investments to build such bunkering facilities. Nevertheless, it is ideal for larger scale bunkering and the fuelling process is faster than with the other methods. It is also considered to have the lowest risk of contamination, due to the handling of a single LNG source. (Palmer-Huggins et al, 2016, p. 17)
Another method is the truck to ship transfer. It is currently the most common method used. This is ideal for vessels with relatively small storage capacity, as the volume of LNG by truck is low and the fuel turnaround is slower. Nevertheless, it provides operational flexibility and the costs are minor. (Palmer-Huggins et al, 2016, p. 17) LNG can also be fed to ships via a bunker ship. This method is the most flexible, as it permits the access to terminals where LNG bunkering locations are not provided. (Albrecht, 2015, p. 21) The three bunkering methods are displayed in figure 3.
Summary of Chapters
1 INTRODUCTION: Defines the research problem regarding the 2020 global sulphur cap and sets the scope of the qualitative study involving two shipping companies.
2 THE SULPHUR OXIDES LIMITS: Reviews the IMO regulations, specifically MARPOL Annex VI, and discusses the implications for the shipping industry regarding fuel compliance.
3 LIQUEFIED NATURAL GAS: Provides a technical definition of LNG, analyzes global trade patterns, assesses bunkering methods, and evaluates the pros and cons for ship-owners.
4 CASE STUDIES: Presents and compares the individual compliance strategies, challenges, and perspectives of a small and a large shipping company.
5. CONCLUSION: Summarizes the findings, highlighting the lack of infrastructure as the primary barrier and discussing the future long-term potential of LNG.
Keywords
LNG, shipping industry, fuel, bunker, global sulphur cap, compliance, challenges, maritime emissions, MARPOL, ship-owners, infrastructure, bunkering, dual-fuel, sustainability, environmental impact
Frequently Asked Questions
What is the core focus of this research?
This thesis focuses on the relevance of LNG as a compliant fuel alternative for the shipping industry in the context of the global 0.5% sulphur cap effective from 2020.
What are the primary themes discussed in the work?
The work covers regulatory compliance (MARPOL Annex VI), fuel technology, LNG infrastructure, operational economic impacts, and the strategic perspectives of different shipping company sizes.
What is the main objective of this study?
The aim is to evaluate whether LNG can gain sufficient ground as a compliant energy source by analyzing the specific fuel planning and decision-making processes of two distinct shipping companies.
Which research methodology is employed?
The study utilizes a qualitative constructivist research paradigm, focusing on a collective case study approach based on audio-recorded interviews with industry participants.
What does the main body of the text cover?
It provides an overview of existing regulatory frameworks, a detailed review of LNG as a maritime fuel, and a comparative analysis of two case studies concerning both small and large shipping entities.
Which keywords characterize this paper?
Key terms include LNG, shipping industry, global sulphur cap, compliance, bunkering, maritime emissions, and industry challenges.
How does the "chicken-and-egg" problem affect LNG adoption?
The problem refers to the deadlock where shipping companies hesitate to order LNG-fuelled vessels due to missing infrastructure, while port developers refrain from investing in bunkering facilities due to lack of demand.
Do small and large shipping companies perceive LNG risks differently?
While both acknowledge high investment costs and infrastructure gaps, smaller companies see more agility in short-scale projects, whereas larger companies view LNG as a long-term "fuel of the future" but currently deem it logistically and financially unfeasible for their large-scale, intercontinental operations.
- Citation du texte
- Andre Dassau (Auteur), 2017, The Relevance of Liquefied Natural Gas as an Alternative for the Shipping Industry to Comply with the Global SO2 Limits, Munich, GRIN Verlag, https://www.grin.com/document/379487
