Thousands of ships could use LNG as fuel. Is that a good thing?
The shipping industry has placed a massive bet on liquefied natural gas as an alternative fuel — as a bridge between traditional fuel oil and whatever comes next, whether it’s methanol, ammonia, hydrogen or something else. Shipowners have spent billions of dollars fitting ships to burn LNG.
What if they’ve made an extremely expensive mistake?The outcome of shipping’s enormous investment will hinge on price: whether LNG will be cheap enough versus fuel oil, and how regulators treat natural gas’ life cycle greenhouse gas emissions in the EU Emissions Trading System (ETS) and a possible global carbon tax, which the International Maritime Organization is pushing to implement by 2027.There are already questions about the LNG-fuel option — newbuilding contracts placed this year have shifted dramatically away from LNG toward methanol. On Monday, fresh questions emerged with the publication of a headline-grabbing study that cast doubt on natural gas’ value as a transitional fuel.