World Bank Goes Anti-LNG For Shipping

The World Bank recently took its anti-LNG stance to the International Maritime Organization (IMO). Prior to November’s gathering of the Marine Environment Protection Committee (MEPC) at the UN body’s London headquarters, the World Bank has resumed its attacks on liquefied natural gas as shipping’s fuel of the future.

World Bank Goes Anti-LNG For Shipping
The World’s Largest LNG-Powered Container Ship, The CMA CGM Jacques Saade | Image Via: GettyImages

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In April, the bank astounded many in shipping with the publication of a zero-emission report in which it particularly recommended countries withdraw from investing in further LNG bunkering infrastructure.

Now the bank has made the decision to take the matter up with shipping’s governing body, sending various documents to IMO in submission for member states to deliberate at MEPC. Methane leakage is 86 times more influential than CO2 over a period of twenty years, said World Bank.

Among the documents submitted, the bank reports that it sees green ammonia and green hydrogen as the most promising options for zero-emission in shipping. The bank further added, “LNG is likely to play a limited role in the decarbonization of the maritime industry, and countries should avoid a new public policy that supports LNG as a bunker fuel, reconsider existing policy support, and continue to regulate methane emissions to put shipping on a Paris-aligned GHG emissions trajectory.”

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Going on to point up why it is concerned about the increasing number of newbuilds coming out of Asian yards with LNG capabilities, the bank added: “Methane leakage can occur at each stage of LNGʹs lifecycle (i.e. during extraction, distribution, and combustion), and represents the accidental release of a gas which is 86 times or 36 times more potent than CO2 over a 20-year or a 100-year period, respectively. Therefore, even small volumes of methane leakage can diminish any GHG and climate-related justifications for using LNG as a low-carbon substitute for oil-derived fuels.”

The bank went further to take down arguments for greener gas forms that backers of LNG have been proposing recently.

The World Bank undertook the analysis to examine a transitional role for LNG, whereby LNG infrastructure and ships could be reused from 2030 onward with compatible zero-carbon bunker fuels such as liquefied biomethane (LBM) and liquefied synthetic methane (LSM). However, evidence depicted that there are expectations of limited availability. Therefore, the lack of price competitiveness of sustainably sourced LBM and that the production of LSM is expected to be more expensive than alternatives such as hydrogen or ammonia.

Contrarily, the World Bank figures out that natural gas in its non-liquefied state may play a different and more crucial role as a feedstock in kick-starting the commercial production of zero-carbon bunker fuels. In the early stages of zero-emission, prior to getting enough renewable electricity supply to generate green hydrogen or green ammonia economically and at scale, natural gas with carbon capture and storage (CCS) could provide a viable way of reducing GHG emissions significantly on the way toward full decarbonisation, the bank has suggested.

The recent data from Clarksons marks 28.8% of today’s bumper order book is for LNG fuel capable tonnage in terms of gross tonnage.

Eager to dissolve the methane leakage argument, two LNG bunker lobby groups disclosed details earlier this year of an independent, peer-reviewed study that claims GHG reductions of up to 23% are achievable now from using LNG as a marine fuel, conditioning on the marine technology employed. This is compared with the emissions of current oil-based marine fuels measured from well-to-wake.

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This report made use of the latest primary data to assess all major types of marine engines and global sources of supply with data supplied by original equipment manufacturers taking in Caterpillar MaK, Caterpillar Solar Turbines, GE, Rolls Royce (MTU), MAN Energy Solutions, Wärtsilä, and Winterthur Gas & Diesel, as well as from ExxonMobil, Shell, and Total on the supply side. Methane emissions from the supply chains as well as methane released during the onboard combustion process– better known as methane slip– have been taken into account in the analysis.

Peter Keller, chairman of lobby group SEA-LNG, mentioned: “Often based on outdated data, methane slip has become an overused argument for those wishing to justify inaction.”

The study reports that methane slip will have been “virtually eliminated” by 2030 as technological advancements continue.

Related Read: Study: Hydrogen Is Not Really The Perfect Green Marine Fuel

The 77th gathering of MEPC is due to be held from November 8 to 12, coinciding with COP 26, a major international climate summit, which will also be taking place in the UK.

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