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SEA-LNG: LNG pathway offers best returns under IMO Net-Zero Framework

SEA LNG’s calculations show that under the Net-Zero Framework, investments in LNG dual fuel vessels offer shipowners a significantly shorter payback period than methanol, ammonia or VLSFO.
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Industry coalition SEA-LNG on Wednesday (14 May) said it has completed its initial analysis of the IMO Net-Zero Framework following MEPC 83 by using the independent Z-Joule cost of compliance calculator to assess the commercial implications of the new regulations.

The calculations show that under the Net-Zero Framework investments in LNG dual fuel vessels offer shipowners a significantly shorter payback period than methanol, ammonia or VLSFO. LNG ships also give shipowners a commercial advantage through fuel optionality and access to widespread established infrastructure.

The complex IMO Net-Zero Framework now requires further detailed analysis and feedback from the industry, as well as coordination with EU initiatives and the specific concerns of other member states, prior to formal ratification later this year. There are also critical details surrounding the IMO Net Zero Fund and the zero and near-zero-emission fuels (ZNZ) Reward Mechanism that will not be addressed before 2027.

SEA-LNG’s research examines the investment case for a 14,000 TEU container vessel operating a trans-Pacific route from Japan to the US West Coast. It compares LNG, ammonia and methanol dual fuel vessels against a vessel fuelled by VLSFO over a 15-year investment period.

The total cost of the different fuel pathways is driven by CapEx, the carbon intensity of the fuels, and the fuel price. For both fuel price forecasts and carbon intensity values, SEA-LNG used assumptions from DNV’s analysis (MEPC 82/INF.8/Add.1) of the candidate mid-term measures discussed at MEPC 82.

Both high-pressure and low-pressure LNG dual fuel engines offer a relative payback period of between 4.5 and 5 years compared with VLSFO because of lower compliance costs due to LNG’s lower greenhouse gas fuel intensity (GFI). Methanol and ammonia fuelled vessels do not pay back over the 15-year investment horizon.

SEA-LNG also modelled the investment case for a 14,000 TEU containership operating on the Rotterdam-Singapore trade route using the same fuel price forecasts. In this case, the vessel is subject to both IMO and EU decarbonisation regulations – the latter for 50% of the voyage. Here the payback for LNG fuelled vessels was reduced to about 3.5 years mainly due to the effect of FuelEU Maritime in the early years of the analysis period.

Steve Esau, Chief Operating Officer of SEA-LNG, said: “While many details need to be decided, the IMO Net-zero Framework provides a clear basis for maritime decarbonisation and should, in principle, enable all fuel pathways – be they LNG, methanol or ammonia – to compete on a level playing field. For this to continue, it is imperative that the ZNZ Reward Mechanism is designed in a fuel agnostic and technology neutral way.”

Peter Keller, Chairman of SEA-LNG, concluded: “The industry continues to make major investments in the LNG pathway. These ships can use LNG, bio-methane and e-methane, and reduce greenhouse gas emissions and cut local pollution today. The IMO position, as well as the EU regulations, both affirm the pathway is heading in the right direction and offers a practical and realistic route to compliance, starting right now.”

This research is the first in a series of costs of compliance analyses SEA-LNG is developing using the Z-Joule calculator. 

The IMO Net-Zero Framework is the first in the world to combine mandatory emissions limits and GHG pricing across an entire industry sector.   

Approved by the Marine Environment Protection Committee during its 83rd session (MEPC 83) from 7 to 11 April 2025, the measures include a new fuel standard for ships and a global pricing mechanism for emissions.  

These measures, set to be formally adopted in October 2025 before entry into force in 2027, will become mandatory for large ocean-going ships over 5,000 gross tonnage, which emit 85% of the total CO2 emissions from international shipping.  

Note: The full SEA-LNG analysis can be read here.

Related: IMO MPEC 83 approves net-zero regulations for global shipping
Related: IMO: Outcomes of Marine Environment Protection Committee (MEPC 83)

 

Photo credit: Venti Views on Unsplash
Published: 15 May, 2025

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Bunker Fuel

Singapore: Bunker sales volume raises to year record high of 4.88 million mt in May

Bio-blended variants of marine fuel oil jumped 671.7% to 40,900 mt when compared to figures seen in May 2024.
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June 16, 2025

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SG bunker performance May 2025

Bunker fuel sales at Singapore port inched forward by 1.1% on year in May 2025, the highest volume seen in 2025, according to Maritime and Port Authority of Singapore (MPA) data.

In total, 4.88 million metric tonnes (mt) (exact 4,878,100 mt) of various marine fuel grades were delivered at the world’s largest bunkering port in April, up from 4.83 million mt (4,826,800 mt) recorded during the similar month in 2024.

Deliveries of marine fuel oil, low sulphur fuel oil, ultra low sulphur fuel oil, marine gas oil and marine diesel oil in May (against on year) recorded respectively 1.89 million mt (+8.6% from 1.74 million mt), 2.45 million mt (-7.2% from 2.64 million mt), 1,200 mt (from zero), 1,700 mt (-88% from 14,300 mt) and zero (from zero).

SG bunker port performance May 2025

Bio-blended variants of marine fuel oil, low sulphur fuel oil, ultra low sulphur fuel oil, marine gas oil and marine diesel oil in May (against on year) recorded respectively 40,900 mt (+671.7% from 5,300 mt), 95,800 mt (+97.9% from 48,400 mt), 700 mt (from zero), zero (from zero) and zero (from 300 mt). B100 biofuel bunkers, introduced in February this year, recorded 1,900 mt of deliveries in May.

LNG and methanol sales were respectively 45,000 mt (-7.8% from 48,800) and zero (from 1,600 mt). There were no recorded sales of ammonia for the month and so far in 2025.

Related: Singapore: Bunker fuel sales increase by 4% on year in April 2025
Related: Singapore: Bunker fuel sales increase by 0.5% on year in March 2025
Related: Singapore: Bunker fuel sales down by 8.1% on year in February 2025
Related: Singapore: Bunker fuel sales down by 9.1% on year in January 2025

A complete series of articles on Singapore bunker volumes reported by Manifold Times tracked since 2018 can be found via the link here.

 

Photo credit: Maritime and Port Authority of Singapore
Published: 16 June 2025

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Alternative Fuels

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

CSSC’s SDARI obtained Approval in Principle (AiP) certificates from classification societies ABS, RINA and LR for four vessel designs including a 50,000 cubic metre ammonia bunkering vessel.

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June 12, 2025

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China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

China State Shipbuilding Corporation’s (CSSC) Shanghai Merchant Ship Design and Research Institute (SDARI) recently obtained Approval in Principle (AiP) certificates from several classification societies for four vessel designs. 

Among the four is a 50,000 cubic metre (m3) ammonia bunkering vessel, which received AiP certificate from American Bureau of Shipping (ABS). 

It integrates liquid ammonia transportation and bunkering functions and can meet the long-distance transportation needs of liquefied gas goods such as liquefied petroleum gas (LPG) and liquid ammonia. 

The ship is equipped with three IMO Type A independent liquid cargo tanks, and uses zero-carbon ammonia fuel to drive the main engine and generator, meeting the IMO greenhouse gas emission reduction strategy and actively responding to the latest greenhouse gas intensity (GFI) requirements of the 83rd meeting of the IMO Marine Environment Protection Committee (MEPC 83). 

The entire ship is equipped with two independent 1,000 m3 deck liquid ammonia storage tanks, taking into account the ammonia fuel endurance requirements under multi-cargo loading and unloading, significantly improving operational economy and flexibility. 

In response to the needs of bunkering operations, it is specially equipped with a retractable bow thruster, side thruster and adjustable propellers to meet ABS’ DPS-1 notation and adapt to the complex port environment of bunkering operations. 

China’s SDARI receives AiPs for alternative-fuelled ships including ammonia bunker vessel

Meanwhile, a dual-fuel LNG/hydrogen-powered Ultramax bulker design and a 30,000 GT Roll-On/Roll-Off Passenger (ROPAX) ship designed to sail in the Mediterranean Sea received AiP certificates from RINA. 

SDARI also received AiP from Lloyd’s Register (LR) for a 113,000 dwt ammonia dual-fuel liquid cargo ship. The optimised propulsion system, specially configured with an ammonia dual-fuel power system and a wind-assisted propulsion system, is expected to save more than 10% energy, especially at low speeds. 

 

Photo credit: Shanghai Merchant Ship Design and Research Institute
Published: 12 June, 2025

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LNG Bunkering

CLPe and CNOOC achieve first SIMOPS LNG bunkering operation in Hong Kong

About 10,000 m3 of LNG was supplied to “Hanoi Express”, marking the largest single LNG bunkering operation in Hong Kong to date and the city‘s first STS LNG bunkering with simultaneous cargo handling.
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June 11, 2025

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CLPe and CNOOC achieve first SIMOPS LNG bunkering operation in Hong Kong

Hong Kong has achieved its largest single liquefied natural gas (LNG) bunkering operation to date and the city‘s first ship-to-ship LNG bunkering with simultaneous cargo handling on 5 June, according to CLPe and CNOOC Guangdong Water Transport Clean Energy Company (CNOOC) on Tuesday (10 June). 

CLPe teamed up with CNOOC to supply around 10,000 cubic metres (m3) of LNG to the container vessel Hanoi Express from the German shipping company Hapag-Lloyd during cargo handling at Kwai Tsing Container Terminals. 

The operation integrated bunkering and cargo operations in a streamlined process, enabling Hanoi Express to be filled with LNG within 24 hours while loading and unloading cargo at Kwai Tsing Container Terminals, significantly reducing its port turnaround time and operating costs.

The LNG bunkering operation was conducted by CNOOC’s Haiyang Shiyou 301, which is 184.7 metres long and 28.1 metres wide. As the first domestically built LNG bunkering vessel in the Mainland, it is equipped with both LNG transportation and bunkering capabilities and is designed primarily to supply fuel to international maritime vessels. 

Haiyang Shiyou 301 is also the largest LNG bunkering and transport vessel in the world, with a storage capacity of 30,000 cubic meters and a refuelling rate of 1,650 cubic meters per hour.

The HKSAR Government released an Action Plan on Green Maritime Fuel Bunkering last year and enacted the Shipping Legislation (Use of Fuels and Miscellaneous Amendments) Ordinance 2024 this year, promoting the city’s development into an international green maritime fuel bunkering centre.

Secretary for Transport and Logistics Ms Mable Chan, said: “The success of this operation was made possible by the joint efforts of LNG supplier CNOOC and LNG bunker seller CLPe. Conducting bunkering during cargo operations—and with the bunkering of green maritime fuel which reduces carbon emissions—truly delivers a synergistic effect where one plus one is greater than two.”  

Ms Chan predicted the simultaneous operation would encourage the bunkering sector in Hong Kong to provide more services for vessels using LNG and other green maritime fuels. This would also give international shipping lines greater confidence and convenience in choosing the Hong Kong port for bunkering, cargo handling, and related operations, she suggested. 

CLP Holdings Chief Executive Officer Mr T. K. Chiang remarked that Hong Kong’s strategic geographic location makes it an ideal international shipping centre. As one of the world’s top ten bunkering centres, the city welcomes over 5,000 ocean-going vessels every year, and the switch to low-carbon and net-zero marine fuels is a growing trend in the global shipping industry.

Guangzhou Municipal Commerce Bureau Deputy Director Mr Wu Wei-hau said enhanced cooperation between Hong Kong and Guangzhou in the development of green marine fuel would play a key role in providing more internationally competitive green shipping services in the Guangdong-Hong Kong-Macao Greater Bay Area.

In November 2024, CLPe and CNOOC announced plans for a joint venture to provide LNG bunkering services in Hong Kong, aiming to accelerate the green transformation of the shipping industry. 

Related: Hong Kong unveils action plan to become green maritime bunkering centre
Related: CLPe and CNOOC form joint venture to offer LNG bunkering in Hong Kong

 

Photo credit: CLPe and CNOOC
Published: 11 June, 2025

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