APPEC 2026: LNG and methane pathway a ‘pragmatic’ decarbonisation route for shipping, states Shell

Liquefied natural gas (LNG) is a resilient, scalable “methane pathway” using existing systems for shipping to decarbonise, Chua Han Wee, Strategic Customer Director, Shell Marine told delegates at APPEC 2026 on Thursday (10 September).

Though the material is supported by expanding infrastructure and improving methane management, adoption is primarily regulation-led, with high-cost environments dampening alternative investment.

In his presentation Looking Ahead: The Methane Pathway for Shipping’s Energy Transition Mr Chua highlighted the global LNG market has expanded by nearly 60% over the last decade, with regasification infrastructure growing in parallel across various geographies.

He noted LNG today represents the largest alternative-fuelled fleet, with the dual-fuel LNG fleet growing by 8% in the first eight months of 2026.

Despite current geopolitical disruptions in the Middle East causing spot price volatility, he argued the LNG market is mature and resilient, capable of rebalancing through levers like storage drawdowns, fuel switching, and demand management.

Looking forward, he pointed to record levels of liquefaction projects taking Final Investment Decision (FID) in 2025 and 2026, with approximately 200 million tons of new LNG supply expected to come online from the early 2030s, which may outstrip demand growth and improve fuel availability.

The following main points were covered in the presentation:

‘Methane Pathway’ and Progressive Emissions Reduction

Mr Chua presented the “methane pathway” as a pragmatic, scalable decarbonisation route that utilises the same storage, handling, and engine infrastructure for different LNG fuel types (LNG → bio-LNG → synthetic LNG). This pathway allows for progressive emissions reduction utilising LNG material:

• LNG: Provides immediate greenhouse gas (GHG) reductions on a well-to-wake basis compared to conventional fuel oil, while also improving air quality by reducing soot, NOx, and particulate matter.
• Bio-LNG*: Already available as a marine fuel today, it can reduce GHG emissions by 33% to 200% depending on the feedstock and processing.
• Synthetic LNG*: Synthetic LNG: Currently in the pre-commercial stage, it is expected to reduce GHG emissions by 53% to 91%.

Progress in Methane Abatement Across LNG Industry

The LNG industry is meanwhile making tangible progress in managing methane emissions across the value chain:

• Upstream: Members of the Oil and Gas Climate Initiative (OGCI) have reduced methane emissions intensity by over 50% since 2016, with Shell averaging 0.05% in 2023.
• Shipping: Over 90% of LNG-fuelled vessels currently on order are fitted with engines designed for low methane slip (less than 0.8%).
• Technology: Shell is currently conducting a year-long trial of a Methane Abatement Catalyst (MAC) on an LNG bunkering vessel in Singapore to remove unburned methane from engine exhaust.

Regulatory Enablers Needed for Scale

To support the methane pathway, identified several critical regulatory enablers need to be addressed at the International Maritime Organization (IMO) level:

• Updated Default Factors: Conservative default values (such as the current 18.5 gCO₂/MJ in FuelEU Maritime) need to progress toward more representative, asset-level data; a study by Rystad Energy using asset-level data suggest a lower value of 14.0 gCO₂/MJ from Norway and the Republic of Korea.
• Recognition of Avoided Emissions: The formal recognition of avoided emissions from bio- and synthetic pathways within a lifecycle assessment framework, similar to existing models in the EU Renewable Energy Directive and US Low Carbon Fuel Standards.
• Mass Balancing: Acceptance of “mass balancing” as a chain of custody model across interconnected gas infrastructure, which is already recognised by the EU.

“We advocate at the IMO for LNG default factors to reflect the latest assessments, as these provide more representative emissions estimates,” said Mr Chua.

“The current LNG default factor under FuelEU Maritime is 18.5 gCO₂/MJ. Norway and the Republic of Korea have proposed to GESAMP a lower LNG default factor of 14.0 gCO₂/MJ, based on analysis by Rystad Energy.

“Unlike regional-average approaches, the Rystad study uses asset-level data that reflects the LNG facilities supplying the marine bunker market, providing a more representative estimate of emissions performance.”

*Disclaimer: All GHG reduction figures mentioned in the presentation are calculated using fuel default values from FuelEU Maritime regulation (EU) 2023/1805. These are compared to Very Low Sulphur Fuel Oil (VLSFO), the differences in greenhouse gas (GHG) reductions on a well-to-wake basis for each fuel are due to variations in the materials used, how the fuel is made, and how emissions are measured.

Photo credit: Manifold Times
Published: 16 September 2026