One of the options for the shipping industry as it scrambles to meet the International Maritime Organization (IMO)’s new sulphur emission caps is to switch to cleaner fuels like methanol and LNG.
That could provide new opportunities for B.C., which has abundant natural gas, a developing LNG industry and a major port.
FortisBC would like to see B.C. develop an LNG bunkering capacity – a move that has the support of the provincial government, which has been working with the Port of Vancouver and industry to develop LNG bunkering.
That would give the Port of Vancouver an edge, since there aren’t many ports in the world that currently have LNG bunkering.
Some cruise and container ship companies are making the switch to LNG in order to meet new caps on sulphur emissions being implemented by IMO in 2020.
But the vast majority appear to be taking a wait-and-see approach, opting to simply switch from bunker fuel to diesel, since it requires no major retrofits.
The shipping industry faces a conundrum when it comes to LNG as a fuel. For one thing, it may be cheaper to switch from bunker fuel to diesel than to invest in expensive retrofits. The current lack of LNG bunkering worldwide is also a problem.
As a consequence, the Canadian Energy Research Institute (CERI) does not expect to see a significant shift to LNG in the international shipping sector, at least in the near term. A recently published study by CERI estimates that only 2% to 7% will switch to LNG.
“We don’t see a lot of the conversion going to LNG,” said CERI president Allan Fogwill. “Our estimate is, by 2025, maybe 5% of the shipping fleet will be LNG. And these will all be new.”
The other problem for the shipping industry is that in 2050 another IMO regulation goes into effect that will require the shipping industry to reduce greenhouse gas emissions by half.
Not even low-carbon LNG may be able to meet those new emission reduction targets, said Robert Lewis-Manning, president of the Chamber of Shipping of BC.
“This is where there’s a real debate in the industry,” he said. “How do you plan your fleet out to 2050 – which, in investing in capital assets, is not very far away – considering most people buy ships for 20 years and you know that LNG isn’t going to be enough to get you to those targets in 2050?
“So you see a cadre of ship owners that are going to LNG quickly, understanding that by 2050 they’re going to have to retool all these vessels, or buy new ships, for 2050 targets on a fuel that really isn’t understood yet.
“I think most people that are experienced are saying there will need to be a technological revolution to get us to those 2050 targets, and that is actually a bigger concern than the switch to compliant fuels in 2020.”
Barring a breakthrough in fusion energy, that could mean that the ocean-going vessels of the future will have to use nuclear power, hydrogen fuel cell power or zero-carbon biofuels.