Maersk rules out LNG as transition fuel

The world's largest bunker fuel consumer, AP Moller-Maersk, does not envisage using LNG as a transition fuel while non-fossil fuel options are developed.

Maersk has no plans to use LNG to fuel its ships, chief executive Soren Skou said during the Danish shipping giant's third-quarter earnings call.

"We do not believe that LNG is going to play a big role for us," Skou said. "It is still a fossil fuel, and we would rather go from what we do today to a CO2-neutral type of fuel, but that will be years out in the future, I suspect," he added.

Maersk has been experimenting with other alternative fuels, such as methanol and ammonia.

LNG is seen as a transition fuel for shipping while alternatives that do not produce greenhouse gas (GHG) emissions are developed. LNG releases less CO2 than other fossil fuels but does emit methane, known as methane slip, which is a significantly more damaging GHG than CO2.

There are 175 LNG-powered ships around the world, mostly operating in Australasia, according to shipping classification society DNV GL. Another 232 ships are on order.

The uncertainty over which fuels will be used in the future means that Maersk has no plans to order new ships, Skou said.

"We are very much aware of the technology risks of ordering ships at this point. We would ideally like to figure out what the future fuels will be and then start building ships that will fit that type of fuel," he said.

Shipping data firm Marine Benchmark has warned that an ageing global fleet will make reducing GHG emissions from shipping more difficult.

By George Collard