The rise of small-scale LNG in Europe
As IMO and other regulatory bodies develop increasingly environmentally conscious regulations, small-scale LNG is on the rise, bringing clean fuel to countries across Europe.
A wave of changes is coming to the maritime industry, as new regulations designed to limit the environmental impact of marine transport come into force.
Starting January 2020, IMO’s Global Sulphur Cap will ban the use of fuel oil with sulfur content over 0.50% , and Emission Control Areas (ECAs) are in place in many regions. To comply with regulations, ship owners and operators worldwide are turning to cleaner fuel sources, including liquefied natural gas (LNG).
Moving towards small-scale LNG
Traditionally, LNG terminals constitute large-scale projects, with the goal of providing access to clean energy to fleets, onshore transportation and households. However, the past few years have seen increased development of small-scale LNG across Europe and throughout the world.
Why the recent shift?
Beyond helping shipowners comply with national and international regulations, small-scale LNG provides three major advantages. First, large-scale LNG terminals often require extensive infrastructure, which can be impractical for regions with underdeveloped infrastructure, or areas where laying pipelines is geographically impossible (e.g. island nations).
Second, the cost of constructing large-scale LNG terminals can be prohibitively expensive, surpassing billions of euros. Finally, small-scale LNG terminals are more accessible than their larger counterparts, allowing them to meet market demand in underserved areas.
The future of small-scale LNG
Looking forward, LNG remains a good solution for complying with environmental regulations, and with prices stabilizing, it may become competitive with other fuels. In Europe, 5 LNG bunkering vessels are already in operation, 3 of which are BV-classed. The number of bunkering vessels will more than likely double in the next 2-3 years to keep up with demand.
Still, LNG remains a ways off from being a catch-all solution for clean marine fuel. CAPEX costs remain high for owners looking to convert in-service vessels or order newbuilds. Accessibility and distribution are also questions ship owners and operators must tackle, as the number of small-scale bunkering hubs and LNG terminals is only just beginning to grow.
To help steer shipowners safely through uncharted territory, Bureau Veritas is lending its expertise in small-scale LNG to clients throughout Europe.
With 38% of the small-scale LNG market and recent deliveries like Anthony Veder’s LNG-powered, ice-class Coralius and Coral EnergICE vessels, Bureau Veritas is ideally positioned to help clients become leaders in the LNG bunkering market. As new contracts for small-scale bunkering ships spring up from France to China, Bureau Veritas is working with clients at the forefront of the market to develop LNG as fuel to the greatest possible extent.
Photo credit ©Sirius Shipping