June 13, 2024

LNG Bunkering Market Poised to Grow Remarkably Owing to Increasing LNG Consumption in Shipping Industry

LNG or liquefied natural gas is a clean alternative fuel increasingly being adopted in the shipping industry. LNG allows ships to meet stringent environmental regulations by reducing emissions of sulfur oxides, particulate matter and nitrogen oxides significantly. It is also cost effective compared to other fuels like low sulfur fuels.

The global LNG bunkering market is estimated to be valued at US$ 806.2 Mn in 2024 and is expected to exhibit a CAGR of 36% over the forecast period 2024 to 2031.

Key Takeaways
Key players operating in the LNG bunkering market are Royal Dutch Shell Plc., Skangas, ENN Energy, Korea Gas Corporation, Prima LNG, Harvey Gulf International Marine LLC, Bomin Linde LNG GmbH & Co KG, Fjord Line, Crowley Maritime Corporation, and Polskie LNG.
The growing global seaborne trade activity and increasing demand for environment-friendly fuel solutions in the marine industry present lucrative opportunities for market players in the coming years. Technologies enabling small-scale LNG production and bunkering are being increasingly adopted, making LNG fuel a viable option for ships of all sizes.

Market Drivers
Stringent emissions regulations mandated by IMO and increasing adoption of emission control areas that prohibit use of high sulfur fuels are major drivers spurring adoption of LNG as a bunker fuel. Growing global LNG trade and availability of supporting infrastructure in key ports also contribute to the market growth. In addition, the cost benefits of LNG compared to other compliant fuel options encourage ship owners and operators to switch to LNG.

Current challenges in LNG Bunkering Market:
– Limited LNG bunkering infrastructure across major ports which hampers the widespread adoption of LNG as a marine fuel. Only few major ports currently have LNG bunkering facilities.
– Higher capital cost of developing LNG bunkering infrastructure
– Limited standardization in LNG bunkering which poses operations and safety challenges. Development of international standards is needed.
– Substantial investment required in LNG fueled ships is a major hurdle especially for small shipping companies.

SWOT Analysis
Strength: Emerging environmental regulations on shipping emissions are driving the demand for cleaner marine fuels like LNG. It can substantially reduce air pollutant and greenhouse gas emissions from ships.
Weakness: Higher upfront capital expenditure for developing LNG infrastructure and acquiring LNG fueled vessels. Logistical challenges associated with handling and storage of LNG.
Opportunity: Increasing focus on decarbonization of international shipping provides significant growth opportunities. Growing LNG import and export activities also provide opportunities for global LNG bunkering market.
Threats: Development of alternative zero emission fuels like hydrogen and ammonia poses future technology threats. Uncertainty associated with future carbon pricing policies.

In terms of value, Europe currently dominates the global LNG bunkering market mainly due to the stringent emission norms introduced by IMO. Countries like Norway, Netherlands, Germany are major European markets. North America is another major market led by USA where LNG bunkering facilities are expanding across ports.

Asia Pacific region is expected to witness fastest growth in the market during the forecast period. This can be attributed to rising adoption of LNG bunkering in countries like China, Japan and South Korea. Growing LNG trade activities and gas based economy is attracting investments in Asia Pacific bunkering market.