The LNG bunkering market is poised to witness a CAGR of 62.5%, and is projected to reach USD 24684.7 million by 2023.
Key growth factors:
In a report released by Energias Market Research highlights the key factors driving the growth of LNG bunkering market are increase in LNG demand in order to reduce the carbon footprint in the shipping industry stringent international emission policy, the best cost-effective alternative fuel and significant rise in government initiatives supporting LNG adoption.
LNG Bunkering is the practice of providing liquefied natural gas fuel to a ship for its own consumption. The advantage that LNG as a fuel provides is the reduction in pollutant caused by the traditional method of fuelling ships. LNG is a potential solution for meeting the demand for clean fuel requirements due to the negligible amount of sulfur content, and its combustion produces low NOx compared to fuel oil and marine diesel oil.
The bunker fuel is primarily used by the marine vessels such as bulk and general cargo vessels, tankers, container ships, offshore port vessels, and ferries. The challenges that LNG bunkering market is facing the high initial infrastructure development cost and, the regulatory landscape and competition from alternative fuels.
Stringent policies in place:
It took centuries to evolve from coal-based fuel to oil-based fuel but the transformation from oil-based fuel to gas-based fuel will not take so long. IMO stringent emission policy will give impetus to develop LNG bunkering infrastructure worldwide. The industry is now set to resolve the structural and commercial barriers that have been obstructing the adoption of LNG as a marine fuel.
Alternate sources of fuel:
Though there are alternative fuels available, LNG with cleanliness, reliable supply, and affordability fit perfectly to be used as future marine fuel. The industry is working to make LNG bunker more attractive by lowering the supply chain costs. Further, some organizations such as the Society for Gas as a Marine Fuel (SGMF) and SEA\LNG – have been formed to promote LNG as the fuel for the shipping industry and to bring investments in the LNG bunkering market.
One of the sectors that will particularly gain from LNG bunkering is LNG bunkering is vessel development sector. The business in the sector will be propelled by the increased need for LNG powered vessels to be fitted with proper LNG bunkering equipment. LNG bunkering infrastructure is increasingly being developed in Asian and European countries.
Some countries like Singapore, Belgium and Norway have taken the lead in developing LNG infrastructure on their ports the other countries will soon follow. Moreover, strategic development is taking place around the globe to develop LNG bunkering market, for instance, Singapore has been collaborating with ports of Rotterdam, Zeebrugge, and Antwerp in Europe to prepare common standards and rules for LNG bunkering.
Europe is the leading LNG bunkering market. A good many ports of Europe are going through infrastructural changes to incorporate LNG bunkering facilities. Further, the European commission has announced that a huge amount of sum to come from European Union member states to develop sustainable and efficient transport infrastructure including a number of LNG bunkering projects.
Asia-Pacific is a fast developing LNG bunkering market. Growing environmental concern coupled with the deadline to comply with IMO emission policy has given a stimulus to Asian countries to develop bunkering infrastructure in the region. A country such as Japan has started truck-to-ship bunkering facility at Yokohama port and is continuously developing the port to become the regional LNG hub in the near future.
North American LNG bunkering market is to be propelled by the abundance of natural gas and shale gas production in the United States. Moreover, increasing liquefaction and regasification plants have provided the U.S. to diversify the LNG market to be used as a marine fuel. Further, to meet the increasing demand for LNG bunkering U.S., Canadian regulatory bodies, and international organizations are working to develop safety and environmental standards to ensure LNG marine fuel transfer operations are conducted safely.
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Source: Marine Link