Market Uptake of LNG Too Slow

The switch to liquefied natural gas (LNG) as fuel for ships has been slower than expected and, as such, hasn’t seen too many activities regarding investment in infrastructure, at least not as much as expected.

“For several years now, the European Commission has actively supported LNG as promising new fuel for shipping. Many solid and quality projects in ports and with shipowners have received EU financial support via the TEN-T.

However, market uptake of LNG has been too slow: a typical “chicken and egg problem”.

No bunkering facilities, therefore no investment in LNG-powered ships.

No ships needing LNG, therefore no incentive to develop LNG fuelling,” said Siim Kallas, Vice-President of the European Commission responsible for transport, while speaking at an LNG seminar in Tallinn,  Estonia.

The seminar was aimed at discussing development of LNG in the Baltic Sea ports and was organized by Baltic ports Organization (BPO) and Port of Tallinn.

The event gathered over 150 port representatives and investors to talk about  new LNG terminals in Estonia and Finland. LNG distribution in the region and the possibility to develop a small scale LNG bunkering network in the Baltic Sea region. 

“Thanks to BPO’s initiative already seven Baltic Sea ports have joined the LNG Baltic Sea program. These include Aarhus, Copenhagen-Malmö, Helsingborg, Helsinki, Stockholm and Turku ports and Port of Tallinn. This means that Baltic Sea ports are establishing an extensive network of ports with planned facilities for LNG bunkering in the region. This on its own will be a significant achievement in meeting the future clean shipping strategy in the Baltic Sea region and in EU,“ said BPO’s Secretary General Bogdan Oldakowski.

According to Kallas, Europe urgently needs more fuelling stations and also to bring rules and technical standards into line, to give certainty to the sector and unlock private investment.

Kallas’ Clean Power for transport initiative is about to be adopted by the European Parliament and EU Member States. The initiative sets a formal target for a comprehensive European network of LNG refuelling stations, by 2025 at the latest.

“Together with all relevant stakeholders we are working in the European Sustainable Shipping Forum (ESSF) in order to finalise a comprehensive and harmonised framework for LNG as a maritime transport fuel.

To me, LNG is one example of how we can successfully turn constraints into opportunities, by setting ambitious goals and ensuring constant progress via good cooperation across the sector,” Kallas said.

[mappress]

Related:

BPO Launches New LNG Bunkering Project