The LNG Bunkering Market is estimated to be valued at US$ 1084.62 Mn in 2023 and is expected to exhibit a CAGR of 11.% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
LNG bunkering refers to the provision of liquefied natural gas as fuel for ships and vessels. LNG provides a viable and more environment friendly alternative to conventional marine fuels such as heavy fuel oil and marine gasoil. Shipping companies are increasingly adopting LNG bunkering due to stringent emission norms by IMO and other regulatory bodies. LNG bunkering infrastructure and vessels provide cleaner, safer and cost effective fuel to ships engaged in international and domestic trading.
Increasing environmental regulations on marine emissions: Stringent emission regulations introduced by International Maritime Organization (IMO) such as IMO 2020 are driving the adoption of LNG as a marine fuel worldwide. The IMO 2020 norms significantly reduced the sulfur content in marine fuels from 3.5% to 0.5%, promoting use of cleaner fuels such as LNG.
Rising demand for LNG from the shipping industry: Growing maritime trade and expanded Panama canal have increased the demand for large carrier vessels in international shipping. Shipping companies are largely replacing or new building their fleets with LNG-fueled ships to remain compliant with emission norms. This will subsequently drive the demand for LNG bunkering infrastructure and vessels over the forecast period.
The growing concerns regarding emissions from conventional fuels and stringent environmental regulations will continue to drive the adoption of LNG bunkering across major ports and countries worldwide during the forecast period.
The global LNG bunkering market is dominated by the ship-to-ship (STS) sub-segment. This sub-segment held over 70% market share in 2022 as it offers safe and cost-effective bunkering solution. It avoids any risk involved with shore-side bunkering and infrastructure development costs. STS bunkering is widely adopted for large vessels that require high volumes of LNG.
Political: Governments of many countries are offering tax benefits and subsidies to promote adoption of LNG as a cleaner marine fuel to reduce emissions. Some nations have made it mandatory for vessels to switch to cleaner fuels while berthing or sailing in certain areas.
Economic: Lower global natural gas prices and an abundant supply is driving adoption of LNG as a bunker fuel. It saves 30-50% fuel costs for ship operators compared to conventional fuels.
Social: Rising awareness about the need to reduce air and water pollution is encouraging shipping companies to opt for greener fuels. Use of LNG significantly cuts sulphur and particulate emissions.
Technological: New engines, tanks and bunkering infrastructure developed by major players have enhanced safety, efficiency and capacity of LNG bunkering solutions. Advanced STS and truck-to-ship technologies are gaining popularity.
The global LNG Bunkering Market Share is expected to witness high growth, exhibiting CAGR of 11% over the forecast period, due to stringent emissions norms by International Maritime Organization (IMO) and growing focus on developing natural gas-based economy. The Asia Pacific region is expected to dominate the market, accounting for over 35% share by 2030 due to rapid maritime trade growth and proactive measures taken by governments in countries like China, Japan and South Korea to boost LNG adoption.
The Asia Pacific region is emerging as the fastest growing market for LNG bunkering. Countries like China, Japan and South Korea have a large fleet of coastal and inland vessels that rely heavily on LNG as a marine fuel. For instance, China aims to build over 100 LNG bunker vessels by 2030 under its national strategy to become carbon-neutral by 2060.
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. Key players are focusing on capacity expansions and partnerships with ports and terminal operators to establish infrastructure for large-scale bunkering.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it