In 2025, the shipping industry faces the urgent reality of complying with regulations aimed at reducing greenhouse gas emissions. The International Maritime Organization (IMO) has set a deadline to cut emissions by at least 20% by 2030, with the EU’s Emissions Trading System (EU ETS) likely to see price increases. The Carbon Intensity Indicator (CII) rating has become stricter, targeting a 40% reduction in carbon intensity by 2030, and the FuelEU Maritime regulation will come into effect on January 1, 2025. Ship owners and operators are under increasing pressure and scrutiny as local, regional, and international regulations take effect.
The demand for shipping LNG pathway is rising as it offers a significant reduction in greenhouse gas emissions. LNG can reduce GHG emissions by up to 23% when used in a 2-stroke engine, surpassing the IMO’s reduction target ahead of schedule. LNG, biomethane, and e-methane provide a scalable method to meet regulatory targets, with biomethane capable of reducing emissions by up to 80% and e-methane leading to full decarbonization. The accessibility of LNG bunkers and the growth of the liquefied biomethane market indicate a promising future for these fuels.
To maintain commercial goals in the face of regulatory pressure and global competition, biomethane and e-methane offer cost advantages over other alternatives. They are compatible with existing bunkering infrastructure and proven shipboard technologies, requiring less capital expenditure. Biomethane is the most cost-effective green fuel for shipping compared to renewable green hydrogen, which dominates the costs of other e-fuels. The LNG pathway’s potential for scalable adoption is further enhanced by ongoing innovations to eliminate methane slip and reduce emissions, making it a realistic option for compliance in the industry.
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