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Argus Media: Vessels on alternative bunker fuels hit record in 2019

13 Feb 2020

Erik Hoffman of global energy and price reporting agency Argus Media on Friday (31 January) issued a report noting the surge in alternative fuelled vessels ordered in 2019: 

Last year, 100 new LNG-powered ships were ordered. This was three times more than the average number of orders between 2016 and 2018, according to DNV GL.

LNG bunker sales at the port of Rotterdam have risen exponentially — from 100t in 2016 to 1,500t in 2017 and 9,500t in 2018, according to the port’s data. Sales had reached 22,700t in the first three quarters of 2019.

But while the Dutch LNG market is the biggest is Europe, LNG still only makes up a fraction of the total bunker fuel demand at Rotterdam. In the first three quarters of last year, 5.4mn m³ of fuel oil and 1mn m³ of marine gasoil was sold at the port.

A total of 385 LNG-powered vessels are in operation and on order globally, with another 143 vessels LNG-ready, according to DNV GL. LNG’s “long-expected tipping point seems to have been reached, but lack of infrastructure and a challenging business case” still limit its uptake as a bunker fuel, DNV GL said.

Orders for battery-powered ships were even higher than for LNG-powered ones last year. Most of these battery vessel projects were hybrid or plug-in hybrid.

A total of 390 battery-powered vessels are in operation or on order globally. While LNG can power bigger vessel types covering a large area — such as container ships, bulk carriers and oil tankers — battery-powered vessels tend to be smaller and mainly operate in northern Europe.

Other alternative bunker fuels are less widespread. There are currently 16 vessels in operation or on order running on methanol, 14 on LPG and three on hydrogen, according to DNV GL.

With the International Maritime Organisation’s (IMO) deadline for switching to bunker fuels with lower sulphur emissions just passed, the shipping industry is increasingly looking ahead to the IMO’s next emissions reduction targets.

The IMO’s strategy to cut shipping’s greenhouse gas emissions in half by 2050 includes a 40pc reduction in CO2 emissions by 2030 and a 70pc cut by 2050 compared with 2008 levels.

To achieve these reductions, vessels will need to burn less conventional bunker fuels and take up alternatives such as LNG, batteries, methanol, LPG, hydrogen fuel cells and ammonia.

Argus Media
Published: 13 February, 2020

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