---

Liquefied Natural Gas (LNG) is the key to cleaner shipping, according to DNV Executive Vice President Remi Eriksen [pictured].

Speaking at a shipping event in Shanghai, Eriksen said "Global shipping can reduce its CO2 emissions by 30 percent the next 20 years through measures that are profitable for the shipping companies. The single most effective move is to introduce LNG as fuel."

DNV has carried out a study of 59 ship segments representing the major shiptypes and sizes of international shipping, identifying 25 different measures that can contribute to reduced emissions. Each of these segments have been modelled separately with regard to operational assumptions, the reduction potential of each measure, the cost of each measure and the year when available measures are phased in.

For 17 of the 59 vessel types and sizes DNV says it is cost-effective to install gas-fuelled engines assuming a gas price equal to the price of marine diesel oil. The study, called "Pathway to Low Carbon Shipping", shows that CO2 emissions can be reduced by 30 percent by 2030 through a number of cost-saving measures, and by almost 60 percent if all the identified measures are included.

"Many believe that gas is tomorrow's fuel. We at DNV think it is already here. LNG as a fuel offers obvious environmental benefits," said Remi Eriksen. "These benefits include nearly 100 percent reduction in SOX and particle emissions, 85-90 percent reduction in NOX emissions and 15-20 percent reduction in CO2 emissions."

Abundance of LNG

"For a switch to LNG to happen certain elements need to be in place," Remi Eriksen pointed out. "The technology is there, as many manufactures are offering LNG fuelled engines already. A challenge is the loss of cargo space due to cylindrical LNG storage tanks. For newbuildings it is fairly simple to find space for the larger fuel tanks, while this may be more difficult for retrofitting on existing ship".

"There is an abundance of natural gas in the world. When we add unconventional resources - like e.g. shale gas - there is a 250-year supply at current usage. The spot price of LNG is already at one fourth to one third the price of diesel oil. LNG needs to be offered with a price linked to the spot market price rather than the prices of the marine diesel that it may replace."

Commenting on the existing LNG supply network, Eriksen said "The main challenge is the lack of LNG bunkering infrastructure. As an example, distribution of LNG as fuel for ships in Norway is done through dedicated terminals for ships in point-to-point traffic (ferries) or for ships always returning to the same port (supply vessels). Larger-scale development should be based on making LNG available at existing bunkering stations. When it comes to sourcing LNG - this must be based on economic considerations."