Ships powered by liquefied natural gas (LNG) are expected to account for six out of 10 new vessel orders in six years due to toughened environmental standards, a South Korean study showed.
About 60.3 percent of the world’s ship orders are projected to be for LNG-fueled vessels by 2025, according to a joint report released by Korea Development Bank and Korea Trade-Investment Promotion Agency on Monday.
The study, based on data from the global shipping and shipbuilding research firm Clarksons and the U.K. marine industry classification society Lloyd’s Register, projected that as many as 1,962 new LNG carriers would be built by 2025. It also expected demand for LNG bunkering vessels to jump more than tenfold, from 313,000 tons in 2016 to 3.2 million tons in 2030.
On condition that Korean shipbuilders would be responsible for building more than 60 percent of the world’s large LNG-fueled vessels, the study estimated the domestic market for LNG vessel equipment to expand to 12 trillion won ($10.5 billion) in 2020 from 3 trillion won in 2017. The ship equipment market mostly consists of small- and mid-size businesses.
In November 2018, the Korean government vowed to order a total of 140 LNG-fueled vessels by 2025, including two for this year, to help revive the country’s struggling shipbuilding industry.
Shipowners across the world are forced to adopt cleaner vessels starting next year to meet the strengthened marine fuel standards by the International Maritime Organization (IMO). From January 2020, the sulfur content in marine fuels would be capped to 0.5 percent from the current 3.5 percent in a move to cut the amount of harmful emissions from ocean carriers.
The new rules have pushed up LNG’s status as the marine fuel of the future. LNG delivers the same fuel efficiency as conventional oil but generates 20 percent less greenhouse gas emissions. LNG is also cheaper than oil as a power generation fuel, making it a more efficient and economic alternative, according to the report.
By Lee Seung-yoon and Kim Hyo-jin
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