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The rise of LNG-powered vessels in container shipping

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LNG Industry,

With nearly three years since the implementation of IMO2020, aimed at reducing sulfur in ship fuels for cleaner air, container shipping operators have embarked on a journey of innovation. They have adopted low-sulfur fuels, scrubbers, and explored new engines and fuels. Alternative fuels are the preferred choice, driven by a desire for cleaner, more sustainable options to reduce emissions, bolster profitability, and enhance their reputation.

LNG as a marine power source has a relatively long history in major container liner companies, notably since 2012 when it found use in short-sea shipping by US-based TOTE Maritime. This analysis delves into the historical progression of LNG-powered container ships, identifying at least 10 major players who have made headlines in this domain.

The image below is to capture the extent of each company's presence in industrial media until 2017, and then through October 2023. The height of each company's avatar is directly linked to the number of distinct article exposures, facilitating an easy review. Different scales have been employed for clarity.

Prior to 2017, LNG as an alternative container ship fuel was primarily a regional phenomenon, adopted primarily by American operators seeking compliance with stringent clean-air regulations from the US Environmental Protection Agency. Notable names during 2013 – 2017 included TOTE (with Sea Star), Crowley, and Matson (with Horizon Lines), with the discussion centring on 3100 TEU vessels serving US-mainland to South American routes.

The pivotal year of 2017 witnessed a sea change. French liner CMA CGM made history by becoming the first giant to utilise LNG to power large container vessels in response to IMO2020, maintaining its leadership role to this day. Hyundai Merchant Marine (HMM) demonstrated early commitment with an order for eight 14 000-TEU LNG-powered ships in 2018, while Germany Hapaglloyd joined as a strong supporter in 2019, subsequently placing a substantial newbuild order for LNG-ready giant container ships in 2021. Mediterranean Shipping Company (MSC) began exploring LNG in its fleet in 2021, and Israel’s ZIM, primarily chartering its vessels, contracted 10 LNG-ready ships. In 2022, Pacific International Lines (PIL) ordered new ships equipped with dual-fuel engines that can run on LNG or low-sulfur fuel oil, while the most recent development in 2023 is Yang Ming's announcement of an order for five 15 000-TEU dual-fuel LNG vessels.

A prevailing industry practice is to maintain a diversified fleet with a mix of solutions, limiting the share of LNG-powered ships within the overall fleet. Many other major container liners have adopted a wait-and-see approach, remaining open to diverse solutions addressing emissions, including Maersk's pursuit of alternative fuels like ammonia and methanol, followed by ONE (merged from Japanese K-Line, MOL and NYK) and Evergreen. MSC has embraced scrubbers, while others, particularly COSCO, continue with the direct approach of using low-sulfur fuel oil (LSFO).

LNG as a ship fuel has faced criticism, citing concerns about emissions, costs, availability, energy density, pricing, and long-term sustainability. Despite these reservations and scepticism about greenwashing, it remains a favoured choice among shipping companies. While the long-term efficacy of LNG as a marine fuel is yet to be determined, it is currently gaining increasing attention and traction as an interim solution for regulatory compliance and environmental responsibility.

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