White paper

Assessment of fuel-cycle impact of LNG in international shipping

Life-cycle analyses
GHG emissions

Although natural gas is being used more widely for road transport, it shows particular promise for the marine transport sector, which faces pressure from more stringent engine and fuel quality standards that will demand major emission reductions to improve air quality and mitigate climate change impacts. The use of liquefied natural gas (LNG) instead of conventional residual and distillate fuels will substantially reduce emissions of oxides of nitrogen (NOx), sulfur dioxide (SO2), and particulate matter (PM), obviating the need to pay a price premium for new, low-sulfur marine fuels and to install after-treatment equipment to meet the upcoming standards.

But considerable uncertainty remains about the net effects of LNG-fueled vessels on emissions. At issue are the upstream greenhouse gas (GHG) emission impacts, including the energy required to transport, handle, and process the fuel, as well as leakage of natural gas into the atmosphere.

This paper seeks to assess the extent to which the associated upstream carbon dioxide (CO2) and methane (CH4) emissions from producing LNG offset its potential climate benefit. It presents a novel analysis of eight discrete pathways that are expected to play a role in the supply of LNG as a bunker fuel, incorporating new data from a variety of sources and offering a rigorous and transparent accounting of where and how energy requirements, CO2 emissions, CH4 exhaust, and leakage emissions contribute to LNG’s overall impact. These “well-to-propeller” pathways are diverse, so as to cover the range of fuel-cycle paths by which natural gas can be distributed and processed before powering marine vessels. The pathways include a range of imported LNG and domestically produced natural gas, differences in LNG liquefaction facilities, and varying LNG distribution and storage routes.

The analysis indicates that direct methane emissions vary between 2.7% and 5.4% throughout the entire LNG fuel cycle. One major variable affecting climate benefit is the extent to which there is methane leakage within the fuel pathways. These upstream methane leakage rates are roughly consistent with the literature for natural gas emissions that are associated with on-road transport sectors. However, approximately half of the overall fuel-cycle methane emissions in this analysis come directly from unregulated ship engine exhaust. Sensitivity analysis indicates that GHG intensity is most dependent upon engine efficiency, direct engine methane exhaust emissions, and upstream methane leak emissions.

This analysis also investigates the potential to improve upon life-cycle natural gas processes related to upstream gas leakage, bunkering, and engine technology to offer greater climate benefits from LNG. Best practices to control direct methane emissions include the use of artificial lifts to dampen methane emissions during the unloading of liquids at producing wells; low-bleed devices to reduce fugitive methane from pneumatic valve operation during gas processing and transport; improved LNG engine design and controls; and methane-targeted oxidation catalysts in the exhaust system. Adhering to such best practices would ensure a more substantial CO2 benefit from LNG use in the maritime fleet. The authors find that best practices would result in a 12%–27% GHG benefit for LNG over conventional maritime fuels.