IEA: LNG bunkering demand set to triple by 2024

LNG use in marine transport is set to triple from 2020 levels to nearly 7 bcm by 2024, according to a new report by the International Energy Agency.

Boosted by the International Maritime Organization’s global sulphur cap, LNG bunker fuel demand has increased fivefold since 2016 and reached more than 2 bcm in 2020, Paris-based IEA said in its latest quarterly Gas Market Report.

As of January 2021, LNG-fueled ships made up about 8% of all vessels on order by one
estimate, and the fleet of LNG-propelled vessels (excluding LNG carriers) could expand by nearly 160% between 2020 and 2024, the report said.

“The inability of LNG to meet the IMO’s long-term GHG reduction targets, however, casts doubt about the sustainability of LNG demand growth in the shipping sector beyond our forecast horizon,” IEA said.

In addition, LNG consumption for domestic shipping would double during the 2020-24 period, led primarily by China, and – to a lesser extent – Europe, it said.

China dominates LNG-powered road transport

China, which had nearly 600,000 LNG-fueled trucks and buses in 2020, the largest such fleet in the world, dominates LNG consumption in the road transport sector, the report said.

In the 2020-24 period, China’s use of LNG in road transport could expand by more than
40%, driven by local incentives such as diesel bans and subsidies, and by lower fuel costs compared to diesel trucks, the report said.

In 2020, India also eased rules for setting up LNG filling stations and introduced a plan to build 1,000 of them along the country’s main highway corridors.

However, the pace of the rollout “beyond the 50 initial LNG stations remains uncertain,” IEA said.

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