LNG bunkering: The sulphur cap is upon us

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On 1 January 2020, the International Maritime Organisation (IMO), the industry’s regulator, will put into effect a global 0.5% sulphur content cap on marine fuels, down from the current 3.5%. Shipowners have had three years to plan their compliance strategy. While the majority is opting for low-sulphur fuel oils, LNG will form part of the solution for some, with orders for dual-fuelled ships that can run on LNG increasing.

The dearth of global LNG bunkering infrastructure, together with high costs involved in retrofitting ships to run on LNG, continue to hold back the development of LNG as bunker fuel, but outlooks of its growth place demand for it at a far-from-negligible 35 mtpa by 2035. Its supporters insist that more stringent environmental rules for shipping in the future, alongside the growing trend of shipowners ordering ‘future-proof’ newbuilds, will result in it capturing a bigger and bigger share of the bunkering market as the 2020s progress. Others take the view that the growing focus on decarbonisation will increase interest in innovative technologies, including hydrogen, and leave LNG as a small niche.

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