Rotterdam turns to LNG for cleaner shipping

AMSTERDAM (Reuters): Rotterdam, Europe’s biggest port, plans cleaner gas-fuelled ships, cutting the use of sulphur-heavy marine fuel oil.

The port expects to have a total of 100 ships at its docks running on liquefied natural gas (LNG) by 2015, a senior official involved said.

The Dutch government and industry association of companies active in the port of Rotterdam, including Royal Dutch Shell , BP, Chevron and ExxonMobil, earlier this year signed a document pledging to accelerate the use of LNG as a transport fuel.

The plan will focus on infrastructure for LNG use in the ports of Rotterdam, Amsterdam, and Vlissingen as well as in the Rhine river region. New European Union anti-pollution laws will require a sharp reduction in sulphur content in shipping fuels from 2015.

The first investment is expected to take place in 2013, the agreement said, without giving any specific figure.

“By 2015, we plan to have 50 sea ships and 50 inland ships running on LNG as well as 500 trucks,” said Jeannette Baljeu, Rotterdam’s deputy mayor in charge of the port and transport issues.

She said her team was talking to shipping associations to evaluate the need for subsidies.

Norway’s Det Norske Veritas in a study said that some 1,000 new LNG-fuelled ships will be delivered worldwide by 2020.

Ports across Europe are working to provide infrastructure to secure LNG supplies. Antwerp and Hamburg, Europe’s second- and third-largest ports, are conducting feasibility studies on commercial LNG bunkering to meet growing demand from the shipping industry.

Initial studies show that the use of LNG instead of diesel engines can reduce CO2 emissions by 25 percent per ship and cut sulphur emissions by as much as 80 percent.

Given the slow pace at which the shipping industry is moving to cut greenhouse gas emissions, the European Union’s executive body said this week it will introduce its own system next year to accelerate reform.

International shipping accounts for about 3 percent of the world’s emissions of carbon dioxide, but if left unregulated it could account for 18 percent by 2050, according to the International Maritime Organisation (IMO).

A new LNG break bulk terminal - built by Dutch gas operator Gasunie and Vopak, the world’s largest independent storage tank operator - is due to be completed at the end of 2014 and will supply trucks and ships in the port.

With three oil refineries and a well-developed petrochemical industry, the Rotterdam area produces 16 percent of the Netherlands’ total CO2 emissions.

Of the 33,000 sea ships and 133,000 inland ships that Rotterdam served last year, only one used LNG.

To encourage more ships to run on LNG, Rotterdam must make it easier to get permits and licences, secure more bunkering stations, and consider providing financial aid to shipping companies, said Ed de Jong, business manager of Deen Shipping which operates Rotterdam’s only LNG fuelled ship.

“The cost of switching from diesel engine to LNG-fuelled engine is between 500,000 and 800,000 euros ($1.03 million), depending on what kind of ship we are talking about,” he said, while recouping that investment can take between three and eight years.