SEA-LNG, the industrial coalition formed to promote the advancement of LNG, released an analysis of the new shipbuilding orders as an opportunity to focus on the growth of LNG-powered ships. The group is highlighting 2021 as the prime year for new LNG dual-fuel ship orders, saying that deep-sea sectors of the maritime industry are increasingly ordering dual-fuel newbuildings as a short-term solution and to protect their investments.
“The deep-sea shipping industry understands that while LNG is not the end game, it is the best place to start to get to net zero. It offers a very clear and actionable plan that starts today, ”said Peter Keller, CEO of SEA-LNG. “We know the need is real and waiting is no longer an option. The accelerated acceptance of new buildings that are powered by LNG shows the trust in this path through its bio and synthetic cousins. “
SEA-LNG analyzed the latest report from Clarkson Research Services detailing the orders for newbuildings in 2021. They calculated that “LNG-powered ship orders approach 30 percent of gross tonnage to order, which is a significant portion of the total shipping capacity when these ships are delivered”. . “
The non-profit coalition presented an aggressive interpretation of the data, but thereby underscored the growing trend towards larger dual-fuel ships. DNV reported in its latest update of the Maritime Forecast to 2050, which was presented in August, that around 12 percent of the newbuildings currently ordered will have alternative fuel systems or dual fuel capabilities. They found that the number has almost doubled in the past two years, suggesting increasing momentum. Specifically based on the number of ships (compared to the size used by SEA-LNG), DNV has set orders for LNG-powered ships at around six percent for 2021. DNV’s Alternative Fuels Insight Platform says 221 LNG-powered ships are currently in service, with an additional 359 in service now on order.
Segments of the maritime industry are among the most aggressive in switching to LNG. DNV emphasized that dual-fuel LNG is the most advanced of the options currently available for the offshore segments, while inland and ports can also use batteries.
The segments of shipping that are increasingly relying on LNG options include the operators of Pure Car and Truck Carriers (PCTC). Many of the major shipping companies have announced new LNG-powered designs, with SEA-LNG reporting that over 90 percent of the new ships that will hit the market in the coming years will be LNG dual-fuel.
SEA-LNG is also showing rapid growth in both the container ship and tanker segments. They reported that their analysis of the data shows a five-fold increase in orders for LNG-enabled container ships since January 2020, while tankers and bulk carriers have also followed suit, increasing seven-fold and doubling over the 18-month period.
“The transition to bio-LNG and ultimately to synthetic LNG will enable the industry to achieve the goals of the IMO 2050,” says SEA-LNG. “This process uses the established LNG infrastructure without investing in new and costly infrastructures around the world for untested fuels.”
Looking at the long-term prospects in its market analysis report, DNV highlighted that there is limited methanol usage at the moment, the first hydrogen demonstration projects have started and ammonia demonstrations will persist for the future, DNV expects it to be four to eight years the key technologies for the transition to these next generation fuels will be available. DNV also stressed that shipowners need to adapt their strategies and choose the best options for decarbonization, including LNG and others, based on their individual situation and the use of their ships.
LNG is expected to continue growing in the near future as shipowners seek strategies to comply with regulations and protect their investments.