EU Cash for Marine LNG 'Has No Climate Benefits': Report

The estimated $250mn spent by the European Union to date on LNG projects in the marine sector, providing 50% partnership funding with the private sector to support a total of $500mn investment, will have “no significant climate benefits at best”, according to a new study by shipping consultancy UMAS - a partnership between University College London’s Energy Institute and Matrans, a small management services consultancy.  

It could potentially increase greenhouse gas emissions (GHGs) from shipping, the UMAS report released June 22 claims, making LNG incapable of achieving the reductions required under the recently adopted International Maritime Organisation (IMO) strategy on reducing GHG emissions from ships.

The study reveals a high-level failure in EU planning, in which short-term improvements to air pollution via replacing heavy fuel oil consumption with LNG come at the expense of locking in fossil fuel infrastructure for decades to come. When including upstream emissions and all sources of GHGs, depending on the fuel’s supply chain and use, UMAS argues that a switch to LNG can even increase GHG emissions, relative to conventional fuels in a Business As Usual scenario.

“Reducing total annual emissions from shipping in-line with the initial IMO strategy objective of at least 50% GHG reduction by 2050 on 2008 levels, and the Paris Agreement temperature goals, is only possible with a switch to increased use of non-fossil fuel sources (hydrogen, ammonia, battery electrification) from 2030 at the latest and with rapid growth thereafter,” the report says. It explores such decarbonisation strategies in its 'limited gas' and 'transition' scenarios.

The report ‘LNG as a Marine Fuel in the EU’  also takes on the argument that LNG is a transitional fuel to biogas (biomethane), saying that deep questions remain over the availability of such bioenergy to meet all of shipping’s needs at reasonable cost.

The EU adopted a declaration in June 2017 in support of the IMO strategy to reduce GHGs, insisting that its promotion of LNG as an alternative bunker fuel would help with the IMO goals.