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The Boston Consulting Group (BCG) has recently published an article on the future of marine fuels and the role of LNG. The question is not whether it will be marine fuel of the future, rather if it will become the critical bunker. Something that can influence hundres of billions of dollars worth of industrial investments.
Beyond economics, environmental considerations argue against a complacent attitude toward bunker. Executives rejoicing in low crude-oil prices may be tempted to take a wait-and-see approach regarding investments in LNG and other low-sulfur fuels. But even in the near term, delaying the adoption of cleaner fuels will mean that large cargo ships will continue making an outsized contribution to carbon dioxide emissions globally. Executives who are committed to transitioning to a “green” shipping industry will stay focused on the environmental advantages of burning cleaner fuel.
Regulators—particularly the International Maritime Organization (IMO)—are pushing the industry in this direction and playing a critical role in determining the optimal time line for shifting to LNG. The growing number of IMO Emission Control Areas (ECAs) has already forced shipping companies to shift a greater share of their fuel consumption to low-sulfur fuel, which is more expensive but environmentally friendlier. And beginning this year, vessels operating in ECAs must abide by stricter sulfur-emissions regulations.
Perhaps most significant, the IMO plans to apply a global cap on sulfur emissions as of 2020. The IMO is currently reviewing the availability of cleaner fuel and may decide to postpone the date the global cap takes effect until 2025; the review will be concluded in 2018. The uncertainty about when the cap becomes effective has added to the complexity of deciding when to switch to LNG.
Full article is available here. Source: BCG Perspectives.
