SEA-LNG notes that while the approximately 2,200 LNG-fuelled vessels and LNG carriers represent only ‘two minutes into the hour’ of the global fleet of approximately 60,000 deep sea vessels, it remains an adolescent fuel that is maturing significantly faster than other alternatives.
However, SEA-LNG noted that the LNG pathway still needs more investment, especially in landside facilities for liquefaction near ports, bio and synthetic methane production and bunkering capacity worldwide. Peter Keller, the Chairman of SEA-LNG, stated that there were approximately 60,000 deep sea ships on the water and, at that time, there were around 600 LNG-capable ships afloat, with an additional 600 on order.
“There are another 1,000 LNG cargo carriers and bunker vessels of varying sizes. While that’s a small percentage of the global fleet, as the clock ticks towards shipping’s emissions reduction targets, the LNG pathway is maturing far faster than other alternative fuels, ” Peter Keller, Chairman of SEA-LNG said.
Keller continued by comparing LNG to a teenager, noting that, when compared to traditional fuels, LNG is still experiencing growing pains, challenges, and victories typical of adolescence. However, he emphasized that LNG is maturing over time as the market grows, new build orders increase, and the LNG pathway, along with biomethane and eventually e-methane produced from renewable hydrogen, gains global acceptance. He explained that shipping stakeholders are investing in LNG because it offers a low-risk, incremental pathway for decarbonization, starting immediately. He also remarked that other alternative fuels are like toddlers in comparison, and in terms of safety, some are like newborns.
This year has witnessed unprecedented investment in the maturing and scaling of LNG from ship owners. LNG is starting to dominate as the preferred future fuel pathway. However, the bunker market, while growing substantially, is lagging and concerns persist regarding the ability to supply the rapidly growing fleet of LNG-fueled vessels.
Keller noted that with high-profile owners now choosing the LNG pathway, they anticipated that this trend would continue and accelerate through 2025 and beyond. He explained that as various alternative fuel pathways mature, there is a growing realization that, despite previous aspirations, some pathways—such as the LNG pathway—are more practical and realistic than others.
While investment in newbuild LNG-fueled ships remains strong, he emphasized the need to see similar investment in bunker vessels, supply, and liquefaction infrastructure. As the LNG pathway matures and the use of liquefied biomethane and eventually e-methane increases, he stressed that the delivery of fuel to vessels must be assured and the investment gap closed.
Another critical need in the maturing process during a period of increased regulation of carbon emissions is the adoption of standardized chain of custody models on a worldwide basis. Chain of custody models are becoming increasingly important to maritime decarbonization as they provide mechanisms to verify that the fuels used are low carbon. Such verification creates investor confidence in new fuel supply chains and accelerates the transition to low-carbon fuels, enabling early adoption in conditions of limited supply.
They will create a market for green fuels by connecting buyers to fuel producers away from bunker ports, enabling faster scaling and providing flexibility to shipping companies at lower cost.
As LNG and the pathway to net zero ascends to adulthood in the coming years, the rewards that our environment reaps will be significant and realistic – given how well we have matured and how conscious we were of what needed to be accomplished, Keller concluded.