LNG to fuel the maritime industry
After Carnival Corporation’s recent decision to switch to LNG as a marine fuel, we speak with Tom Strang, Senior Vice President of Maritime Affairs, about the company’s choice of alternative fuel solution to better air emission standards.
March 15, 2018
The debate around the maritime industry’s future fuel solution is getting heated as the 2020 sulphur cap regulation is nearing. Next month, the IMO reconvenes the Marine Environment Protection Committee (MEPC) for the 72nd session to discuss various issues including a comprehensive strategy in the reduction of GHG emissions in the long term.
Although the 2020 air emission cap on sulphurs is currently more pressing for the industry, it is also crucial to pay attention to long-term goal that the IMO is setting out. Shipowners have already started monitoring and reporting air emission data in accordance with the EU’s MRV (Monitoring, Reporting, Verifying) and the IMO’s DCS (Data Collection System) regulations, which will inevitably aid the decision makers at MEPC72 to outline a decarbonisation roadmap.
Maritime has many options to decarbonise, and the developments in advanced fuel solutions like hydrogen and biofuels are attractive, but at the moment, the coolest fuel choice popularised by CMA CGM is LNG (Liquefied Natural Gas).
Not everybody is a fan though; Dr. Tristan Smith from the UCL Energy Institute has called LNG a “very expensive red herring”. Still, LNG’s value as marine fuel is multifold and the potentials for the future are attractive.
In late February, Carnival Corporation announced to launch seven cruise ships fuelled by LNG, following a successful initial pilot with AIDAprima. Considering this new development, we caught up with Tom Strang, Senior Vice President of Maritime Affairs at Carnival Corporation and PLC, who oversees the LNG operations in the company.
Lili Nguyen: What are the environmental and financial benefits of LNG fuelled ships as opposed to other alternative fuel solutions like biofuels, hydrogen, or even scrubbers?
Tom Strang: LNG is an economic, clean and safe marine fuel with increasing global availability that also complies with existing and scheduled emission requirements. By building new ships that will be powered by LNG both while in port and at sea, we believe we are setting ourselves up to take advantage of these benefits and future-proofing our fleet.
There was very little economic impact for the initial capital investment compared to installing exhaust gas cleaning systems on our ships. LNG as fuel is currently more expensive than heavy fuel oil (HFO) but does offer a considerable discount to marine gas oil (MGO).
Compared to marine diesel oil, LNG offers a 95 to 100% reduction in sulphur oxides (SOx), an 85% reduction in particulate matter, an 85% reduction in nitrogen oxides and a 25% reduction in direct carbon emissions. As part of our effort to meet the regulations and achieve our own goals, there was a strong interest to select and implement fuel sourcing that would dramatically reduce our rate of emissions and footprint.
LN: In your evaluation and assessment of different fuel solutions, what were the key considerations? How does LNG meet these demands?
TS: The use of LNG meets and exceeds all current and proposed emissions regulations though 2025 and is an important mainstay of our commitment to sustainable cruise operations going forward. For existing ships and where LNG is not available, we have a programme to meet the new emissions rules using exhaust gas cleaning systems (EGCS), which clean the exhaust from engines.
Because of the new regulations adopted by the International Maritime Organisation, there is a greater push in the industry today to build ships that can utilise cleaner burning fuel, such as LNG-powered ships. The European Union is investing heavily in infrastructure that allows for the use of cleaner fuels, and so in the industry today, there is a greater incentive than before to develop LNG-powered ships. Up until this point, there have been various regulatory issues that have kept the industry from developing this technology to the extent we are today. Additionally, most areas lacked the infrastructure to make this technology feasible. However, today we see this changing, with LNG bunkering facilities and terminals being developed, particularly in Europe, which allow the industry to commit to developing this technology.
There is an increasing demand for clean emissions, both from a regulatory perspective as well as from local stakeholders, which requires cleaner fuels, of which LNG is the best compliant solution today. That, together with the new safety regulations for ships using gases as fuels, and the developing infrastructure for LNG, was a tipping point, and we decided it was the right time to begin using LNG by building the world’s first LNG-powered cruise ships. Also, because we are currently designing a new series of vessels, it is a good time to begin building LNG-powered ships – in effect providing a degree of future proofing.
LN: What are the challenges that you as a ship-owner face when it comes to the maintenance of LNG fuelled vessels?
TS: If the experience that LNG cargo carriers have had is anything to go by, we should expect that engine maintenance intervals can be extended when compared to traditionally fuelled vessels.
One area that we are actively working on with both our partners and other likeminded stakeholders is the development of procedures and processes related to future inspection regimens for gas-fuelled vessels, including dry docking and other maintenance.
LNG is new to the cruise industry and to the shipyards that we have traditionally worked with, so we are working together to be efficient.
The other main area that we are working on is the human element. To ensure that crew members are ready for the new experiences of operating gas-fuelled vessels, we have been working together with various partners and stakeholders to develop the necessary competencies and skills, as well as the training courses. This will ensure that we maintain the excellent safety record that we have today. At our state-of-the-art CSMART Academy training facility in Almere, Netherlands, we will have dedicated LNG training courses using simulation and real hands-on experiences to ensure that all crew receive the required knowledge and training for managing LNG-powered ships. In addition, and as part of our strategic relationship with Shell, we have the opportunity for our crew to get hands-on real-time experience onboard LNG cargo carriers.
LN: Is LNG a long-term solution or a short-term solution? Why?
TS: To us, LNG is an important short- and long-term solution. As organizations continue to enact safety regulations and codes demanding cleaner emissions, it is crucial for the cruise industry to adapt. We did exactly that by leading the cruise industry in pioneering exhaust gas cleaning systems in the confined spaces of cruise ships, and we are also leading the way in building LNG-powered cruise ships. And of course, new technology is being constantly developed, and we stay very close to the latest innovations. The bottom line is that even though Carnival Corporation and the cruise industry represent a very small percentage of the overall shipping industry, it is a priority to reduce air emissions and overall impact on the environment.
Additionally, we know that the transition to LNG is no simple task, and the demands – technical and otherwise – associated with its implementation make it something of a milestone both for Carnival Corporation and the wider cruise industry. Our hope is that by moving forward with LNG and helping to establish it as a trusted power source and developing the infrastructure needed to use it, we will make it more readily available and more of a viable option – not only for our fleet, but the industry as a whole.
LNG exceeds all the statutory requirements that are currently in place regarding air emissions. It addresses all of the major concerns related to local air pollution issues and goes a significant way to reducing our carbon emissions. It could also be seen as a steppingstone to using other possible low-carbon fuel solutions in the future such as BIO-LNG or hydrogen.
LN: Do you think LNG will become the maritime industry’s new future fuel, replacing HFO? Why?
TS: LNG is clearly a part of the fuel mix going forward. It offers an excellent clean air solution, is widely available and is competitively priced. In the cruise and ferry sector, it is growing in popularity, with some 18 cruise ships and 14 ferries on order that will be LNG-powered. Since CMA CGM announced their decision to order nine new ultra-large container ships that will have 18,000m3 LNG as fuel, it has been reported that there is an increased interest in LNG as fuel from that and other mainstream shipping.
With its best in class local air emissions profile, LNG is well positioned by 2020 and beyond to gain increased market share. However, it is also possible that new innovations in fuel technologies will be developed over time, and that can have an impact on the overall number of solutions that will be utilized in the future.
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