Paper PS6-2

AN ENVIRONMENTAL SEA CHANGE IN LNG SHIPPING

Ms. Julie A. Nelson
Director, Chartering and Fleet Optimization
BG Group, Houston TX, USA
julie.nelson@bg-group.com

ABSTRACT
As environmental regulations become ever more stringent, LNG shipowners are increasingly
using enhanced operational techniques and new technology to reduce the impact of their ships on
the environment while, in some cases, reducing the vessels operating costs. The paper will
discuss the operational techniques and new technologies that LNG shipowners are considering
and/or implementing to meet these environmental regulations; discuss the current and proposed
future national/regional and international environmental regulations and guidelines that are
impacting LNG shipping; and give an overview of how LNG shipping has changed because of the
increased focus on the environment. A detailed discussion of ship design characteristics will
include hull form, propeller design and interaction with the hull, main propulsion system design,
underwater coating technologies, reliquefaction plants, and emissions control systems that impact
both fuel efficiency and emissions. Regulations involving restrictions and limitations of emissions
of green house gases (CO2), nitrous oxides (NOx), chlorofluorocarbons (CFC's), methane, and
sulphur dioxides and current and proposed special restrictive areas such as sulphur dioxide
emission control areas (ECA zones) will be presented. Discussion of how LNG shipowners are
reducing or eliminating ozone depleting substances, and better managing discharges of ballast
water to prevent, minimize and control overall impact on the environment will also be presented.

Paper PS6-2

INTRODUCTION
As environmental regulations become ever more stringent, LNG shipowners are increasingly
using enhanced operational techniques and new technology to reduce the impact of their ships on
the environment while, in some cases, reducing the vessels operating costs. The underlying
framework of environmental requirements is provided by the international community through the
International Maritime Organization although other players such as the EU and US have also
acted independently. These complex international regulations are based on freedom of the seas
to move cargoes worldwide but also recognize the worlds need to protect the environment. In the
gas industry, both LPG and LNG owners have proactively introduced self regulation through
codes and recommendations. To comply with the myriad of regulations, both international and
self imposed, shipowners have implemented design improvements in the areas of hull form and
propeller design, main propulsion system design, underwater coating technologies, reliquefaction
plants, and emission control systems to improve both fuel efficiency, maintain cargoes and
reduce emissions. Shipowners also use operational techniques that reduce overall fuel costs
while improving emissions. Despite these improved designs and operational efficiencies, the
international community is still contemplating new policies to encourage even more emission
reductions through the use of new policy measures, including market based instruments or new
taxes. Developing a proper and appropriate framework is of critical importance to the industry for
the future.

INTERNATIONAL FRAMEWORK OF ENVIRONMENTAL SHIPPING

REGULATIONS
The primary body for developing an international regulatory framework for shipping is the
International Maritime Organization (IMO), a specialized agency of the United Nations. The IMOs
work encompasses safety, the environment, legal matters, international technical cooperation,
maritime security and even efficiency of shipping. For environmental issues, the International
Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978
relating thereto (MARPOL 73/78) is the controlling convention. This Convention covers a wide
range of accidental and operational pollution including oil, sewage and garbage pollution and air
emissions and it has been amended almost yearly since 1984. Six technical Annexes enhance
the Convention by providing regulations for particularly important environmental issues: Annex I Prevention of pollution by oil; Annex II - Control of pollution by noxious liquid substances; Annex
III - Prevention of pollution by harmful substances in packaged form; Annex IV - Prevention of
pollution by sewage from ships, Annex V- Prevention of pollution by garbage from ships; and,
Annex VI: Prevention of Air Pollution from Ships. While Annex VI regarding air emissions is
currently highly pertinent, as the world begins to focus on greenhouse gas emissions, Annex I
changed the face of the shipping industry when it required double hulls on all newly built tankers
with phase in dates for existing ships. As the majority of LNG ships have been built since the
implementation of MARPOL, this Convention and its important annexes creates the framework for
sound environmental practices on LNG ships.
Preventing pollution through good operational practices and improving technology, however,
is not the only concern for LNG ships regarding IMOs environmental regulations. The Hong Kong
IMO Convention on Safe and Environmentally Sound Ship Recycling guides an LNG shipowner to
identify potentially hazardous material onboard ships early in the ship design and construction
process. Taking eventual disposal of the vessel into account during the design and minimizing the
amount of potentially hazardous material onboard ships can help minimize hazardous waste
generation throughout the operating life of the ship. While this Convention was only adopted in
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May 2009, many LNG shipowners have already followed the general intent of this convention on
a voluntary basis with the assistance of their ship classification societies. During the development
of this convention, a working concept called "Green Passport" was implemented by the shipping
industry through the classification societies. The Green Passport notation for ships1 accompanies
the ship throughout its working life and contains an inventory of all materials potentially hazardous
to human health or the environment used in the construction of a ship. The Green Passport is
awarded by the classification society (or by a shipyard at the construction stage) to the Owner of
the vessel, allowing subsequent changes in materials or equipment to be recorded. Successive
owners of the ship maintain the accuracy of the Green Passport and incorporate into it all relevant
design and equipment changes, with the final owner delivering it, with the vessel, to the recycling
yard. The Green Passport concept was adopted into the final ship recycling Convention by the
requirement of an Inventory of Hazardous Materials (IHM)2 and the Convention requires that the
recycling facilities be responsible for the proper management and disposal of the materials listed
in the IHM.
Green Passports have also become an integral part of obtaining ISO 14000 accreditation
(including ISO 14001:2004 and ISO 14004:2004), as it is one means of evidencing measurable
and achievable enhancement of a companys environmental standards. The ISO 14000 family
enables a shipowner to demonstrate that it is operating its ships in an environmentally sustainable
manner through comprehensive environmental management systems (EMS). ISO 14001:2004
requires a shipowner to identify and control the environmental impact of its activities, implement
continuous improvement mechanisms and use a systematic approach to setting environmental
objectives and targets.
In addition to assisting shipowners during ship design, construction and operations, the major
ship classification societies have created environmental protection protocols for shipowners.
American Bureau of Shipping (ABS), for example, has developed a voluntary Guide for the
Environmental Protection Notation for Vessels to promote environmentally focused design,
construction and operation of ships. To receive this notation, the ship must not only demonstrate
compliance with international environmental regulations and conventions and other ABS rules or
guides that encourage enhanced protection of the environment but also comply with more
stringent criteria for sea and air discharges. An environmental plus notation requires additional
certifications and approvals. Lloyds Register has a similar protocol. To verify exhaust emissions,
Germanischer Lloyd has developed an Exhaust Emission Certificate,3 which includes
measurement and relative certification procedures.
Sulphur And Nitrous Oxide Emissions. Despite the engagement of the IMO and
classification societies providing the foundation for improving the environmental footprint of
shipping, the European Union (EU) and the State of California have implemented more stringent
emissions regulations. California introduced requirements for low sulphur fuels in 2009 within 24
miles of the coastline.4 The European Union implemented low sulphur regulations at the start of
2010, bringing forward the timeline whereby LNG ships must be capable of using lower sulphur
1

See Guide for the Class Notation Green Passport, May 2008, American Bureau of Shipping,
http://www.abs.org. See also Lloyds Register,
http://www.lr.org/Industries/Marine/Services/Consultancy/Green+Passport.htm.
2
See http://www.imo.org, Resolution MEPC.179(59) adopted on 17 July 2009, Guidelines for the
Development of the Inventory of Hazardous Materials.
3
http://www.gl-group.com/en/snb/ship_safety_environment.php
4

http://www.arb.ca.gov/regact/2008/fuelogv08/fuelogv08.htm
3

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fuel.5 While the requirement only applies when the ship is at berth, LNG shipowners are
currently striving to find the appropriate mechanism for compliance, as steam LNG ships were not
designed for the bunker fuels that would satisfy the EU directive.
The United States, jointly with Canada,6 applied for (which was approved in principle by the
IMO on July 17, 2009), an Emission Control Area (ECA) designation, for reduction and control of
air emissions, including nitrogen oxides, sulphur oxides and particulate matter from shipping,
extending 200nm off the national coastlines (excepting parts of Alaska). This designation could
enter into force as early as January 2012, thereby requiring more stringent reduction of air
emissions from LNG ships than that required by the IMO global shipping regulations for
international waters (non-ECA zones). Ships entering the ECA zone will be required to switch
over to lower sulphur fuel, however, employing exhaust gas cleaning devices which remove
sulphur are also acceptable to meet the standard. Currently only the Baltic and North Seas have
ECA designations, but it is expected that the Mediterranean Sea and Tokyo Bay ECA zones will
follow in 2014 and 2015, respectively. Singapore, Hong Kong, Australia, the Black Sea, Mexico,
and the remainder of Alaska will likely also request ECA designations in the future.
Table 1. Ship and Engine Fuel requirements

Year

USA, State of California, within

24nm of coastline

July 2009

Fuel Sulphur Limits

NOx

Auxiliary diesel engines: marine

gas oil (MGO), 1.5%, marine
diesel oil (MDO), 0.5%
Main engines and auxiliary
boilers: MGO 1.5%, MDO 0.5%

2012

Auxiliary diesel engines: MGO

0.1%, MDO, 0.1%
Main engines and auxiliary
boilers: MGO 0.1%, MDO 0.1%

European Union (at berth

requirements, including main
and auxiliary boilers)

2010

1,000ppm (0.1%)

EU Directive 2005/33/EC requires maximum sulphur content of fuel oil used by ships at berth
in EU ports to be 0.1%, which is not globally required by the IMO until 2015.
6
France also joined the ECA proposal on behalf of its island territories of Saint-Pierre and
Miquelon (which form an archipelago off the coast of Newfoundland). See
http://www.epa.gov/otaq/regs/nonroad/marine/ci/420f09015.htm for a copy of the EPA proposal.
4

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Emission Control Areas (ECA)

MARPOL Annex
requirements

VI

global

Through
July 2010

15,000ppm (1.5%)

2010

10,000ppm (1.0%)

2015

1,000ppm (0.1%)

2016

Tier 3 aftertreatment

2011

Tier 2
engine
controls

Through
January
2012

45,000ppm (4.5%)

2012

35,000ppm (3.5%)

2020

5,000ppm (0.5%), subject to

review in 2018

Industry groups such as the Society for International Gas Tanker and Terminal Operators
(SIGTTO) and Oil Companies International Marine Forum (OCIMF)7 as well as other international
bodies, such as the World Bank8 and national Export-Import (EXIM) banks prescribe guidelines
for the shipping industry for the environment, health and safety. In 2008, OCIMF published
guidelines for Energy Efficiency and Fuel Management to encourage voluntary reductions in CO2
emissions9, while SIGTTO has been actively participating in informing the EU of the potential
challenges of LNG ships to comply with the 2010 at berth fuel sulphur limit regulations as
currently written, due to their lack of clarity on using gas to meet the majority of fuel requirements.
The World Bank prescribes environmental guidelines minimizing the use of volatile organic
compounds (VOCs), hazardous waste management, ballast water release, antifouling paint
restrictions, avoidance of ozone depleting substances and air emissions reductions (from
7

Implementation of environmental monitoring program developed by industry groups,

www.ocimf.com
8
World Bank Group Environmental Health and Safety (EHS) guidelines for Shipping
(http://www.ifc.org/ifcext/sustainability.nsf/AttachmentsByTitle/gui_EHSGuidelines2007_Shipping/
$FILE/Final+-+Shipping.pdf)
and General EHS documents
(http://www.ifc.org/ifcext/sustainability.nsf/Content/EnvironmentalGuidelines)
9
http://www.ocimf.com/view_document.cfm?id=1147
5

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installation of shore based power units to suggesting the use of land-based emission units to treat
and collect vessel emissions while in port). The environmental guidelines are applied when one or
more World Bank members are involved in a project and provide performance levels and
measures considered achievable in the shipping industry. The Export-Import Bank of the United
States (EXIM US) has general non-shipping specific guidelines for the environment.10
Greenhouse Gas Emissions: After SOx and NOx emission reduction schemes, the next air
emissions issue facing the shipping industry reducing greenhouse gas (GHG) has already
begun. The 1997 Kyoto Protocol to the 1992 UN Framework Convention on Climate Change
delegated the limitation and reduction of greenhouse gases from shipping to the IMO.11 The
Marine Environment Protection Committee (MEPC), the IMOs senior technical body on marine
pollution related matters, conducted two GHG studies in 2000 (using figures from 1996) and
2009. These studies recognized that while shipping is generally an energy efficient mode of
transportation, a significant potential to reducing GHG through operational and technical means
has been identified12 and also discussed potential market based instruments that could
encourage cost-effective solutions. The second study estimated that ships engaged in
international trade in 2007 contributed about 2.7 per cent of the worlds anthropogenic CO2
emissions and that in the absence of global policies to control GHG emissions from international
shipping, by 2050 emissions may grow by a factor of 2 to 3 (compared to emissions in 2007) as a
result of the growth in shipping.13
The IMO, through the MEPC, is looking at the various policy initiatives that could be deployed
to encourage reduction in GHG and to control GHG emissions to develop its own GHG scheme,
as well as guidelines for operational and technical improvements. The policy initiatives include a
fuel tax, mandatory efficiency standards to improve energy efficiency, cargo-based scheduling
with assignment to national inventories and a hybrid system. The European Union is looking at
cap and trade policies and threatened the IMO that it will implement a plan if the IMO fails to
implement a GHG reduction plan in short order. The Director General Environment for the
European Commission stated that the EU has a preference for global measures but should the
IMO fail to act, the EU Commission will consult with industry in 2010 to reach agreement by
years end. The measures would be adopted by 2011 and entered into force by 2013. The
Director General stated that shipping should contribute to an emissions reduction target of 20%
below 1990 levels by 2020.14 A discussion of the various alternatives follows.
During their July 2009 meeting, the MEPC agreed to disseminate interim and voluntary
technical and operational measures to reduce international shipping GHG emissions and agreed
a work plan to discuss market-based instruments to provide incentives for the shipping industry at
later meetings. Agreed trial measures listed below will be discussed at the Committee's sixtieth
session (MEPC 60) in March 2010, for refinement and consideration for scope of application and
enactment. The measures include:

10

http://www.exim.gov/products/policies/environment/envproc.cfm#intro
http://unfccc.int/resource/docs/convkp/kpeng.pdf, see Article 2.2
12
http://www.imo.org/includes/blastDataOnly.asp/data_id%3D26046/4-7.pdf
13
http://www.imo.org/includes/blastDataOnly.asp/data_id%3D26484/4-7-Corr-1.pdf
14
Presentation by Mark Major, DG Environment for the European Commission, The political view
from Europe at SEAat Trading Seminar, International Maritime Organization, London, 2nd April
2009
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1. interim guidelines on the method of calculation, and voluntary verification, of the

Energy Efficiency Design Index15 for new ships, which is intended to stimulate
innovation and technical development of all the elements influencing the energy
efficiency of a ship from its design phase; and
2. guidance on the development of a Ship Energy Efficiency Management Plan, for new
and existing ships, which incorporates best practices for the fuel efficient operation of
ships; as well as guidelines for voluntary use of the Ship Energy Efficiency
Operational Indicator for new and existing ships, which enables operators to measure
the fuel efficiency of a ship.
Ballast Water And Invasive Species. The introduction of invasive species into national
waters is considered to be a major threat to the health and survival of all coast ecosystems16
and is one of the four greatest threats to the worlds oceans.17 The International Convention for
the Control and Management of Ships Ballast Water & Sediments was adopted in 2004 to prevent
and eventually eradicate the transfer of harmful aquatic species through ships ballast water. The
Convention requires shipowners to have approved Ballast Water Management Plans (BWMP)
which incorporate either ballast water exchange standards or treatment procedures. A Ballast
Water Record book is required to record when ballast water is taken onboard, treated or
exchanged and then discharged into the sea or a reception facility (or accidentally discharged).
All ships that carry ballast water must install a treatment system by 2016. In the United States, a
self-policing program was established in 1998 for ballast water management reports. The
shipping industrys rate of compliance was so poor that the voluntary program later became
mandatory. The program requires vessels to maintain a ballast water management plan and
submit Ballast Water Reporting forms through a National Ballast Information Clearing House.18
To assist shipping companies in developing BWMPs, the International Association of Independent
Tanker Owners (INTERTANKO) and the International Chamber of Shipping (ICS) have published
model Ballast Water Management Plans.19

ENVIRONMENTAL IMPROVEMENTS BY DESIGN

Ship design improvements are important to improve efficiency and reduce emissions. Hull
forms, main propulsion system design, propeller design and interaction with the hull, underwater
coating technologies, reliquefaction plants, and emission control systems are some of the new
technologies that have been and are being incorporated into newbuild LNG ships. With the
worlds LNG fleet (and global shipping fleet) coming off an ambitious ship building cycle, it is likely
that any subsequent new technologies may take longer to integrate into the fleet or will need to be
retrofitted into the existing LNG ships.
The IMO is working on development of a Mandatory Energy Efficiency Design Index (EEDI)
limit for new shipping to encourage development to improve energy efficiency by providing a
formula by which energy efficiency per unit of cargo can be objectively measured. The MEPC has
15

*IMO Circ. 471 Interim Guidelines for Voluntary Ship CO2 Emission Indexing (Operational
Energy Efficiency Index)
16
NOAA Economics, Invasive Species topic overview,
http://www.economics.noaa.gov/?goal=ecosystems&file=events/invasive&view=overview
17
http://globallast.imo.org/
18
See http://invasions.si.edu/nbic/
19
www.intertanko.com and http://www.marisec.org/co2
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finalized a Circular on the Interim Guideline for Voluntary Verification of Energy Efficiency Design
Index20 to seek evidentiary outcomes through use of the baseline formula. Interim Guidelines on
the Method of Calculation of the EEDI for New Ships21 have also been developed so that the
Committee can test the applicability of the EEDI formula for all shipping types and then refine the
formula, if necessary. EEDI Guidelines can assist shipowners, shipbuilders and manufacturers
and other interested parties in understanding the voluntary EEDI verification.
Hull Forms. Shipyards are now looking at LNG vessel hull forms in more detail trying to
optimise designs to improve efficiency. This has been particularly important as vessel sizes have
increased from the traditional 130,000m3 to 138,000m3 range up to 260,000m3. Due to the
restrictions on draft, overall length and depth, that are applicable for many terminals, the
designers have adopted twin shaft designs for these larger sized vessels. This approach has
even been adopted by some designers for ship sizes in the 160,000m3 range. For these smaller
ship sizes, 160,000m3 to 170,000m3, the designers have to balance the advantages of having a
twin shaft arrangement with lower fuel consumption, versus the increased capital expenditure
(capex) and technology complexity of having twin shafts. To put this in perspective, a 170,000m3
twin skeg DFDE has a very similar fuel consumption to that of a single shaft 155,000m3 DFDE. It
should be noted, however, that these changes to twin shaft arrangements have been possible as
a result of the alternative propulsion systems which are now available and are discussed below.
Propulsion Systems. Historically the LNG industry has been conservative, looking for a very
high degree of reliability required by the liner routes that were the norm. Until recently, reliable
alternatives to steam propulsion that dealt with the natural boil off were unavailable and the
inefficiency of steam was accommodated due to the fact that dealing with the natural boil-off and
having a very reliable propulsion system was key. However, new multiple fuel internal combustion
engines and energy saving technologies in ship propulsion are now available and have become a
key driver in newbuild LNG ships. Since the composition of exhaust gases emissions are directly
related to the impurities in the fuel that they use, efficiency is the determining factor when
choosing a more environmentally friendly propulsion system.
Dual and tri-fuel diesel electric ships (DFDEs/TFDEs) using medium speed diesel engines are
the new market standard over conventional steam turbines, despite the reliability and longevity of
steam plants. The primary disadvantage of steam propulsion is high fuel consumption because of
relatively low thermal efficiency of 28%-29%. As fuel prices increase, the steam plants benefits of
fuel flexibility, ease of maintenance and reliability are overshadowed by the cost of high fuel
consumption. Electric propulsion on the DFDEs has a higher initial capital cost but can achieve an
overall plant efficiency of 43-46%, thus creating the potential for both incremental fuel savings
and concurrent reduction in CO2 emissions. Environmentally, the DFDE/TFDE also has
advantages over steam propulsion whenever the steam ship must supplement burning natural
gas as fuel with HFO.
Typically, a 145,000m3 steam propelled LNG ship burns about 160 mt fuel oil equivalent22,
emitting about 498 tonnes of CO2 into the atmosphere per day at 18-19 kts speed. In contrast, a
165,000m3 dual fuel diesel electric LNG ship at the same speed burns about 126 mt fuel oil

20

MEPC.1/Circ.682 http://www.imo.org/includes/blastDataOnly.asp/data_id%3D26529/682.pdf
MEPC.1/Circ.681 http://www.imo.org/includes/blastDataOnly.asp/data_id%3D26528/681.pdf
22
Conversion factor (m3 LNG to Fuel oil equivalent): 0.51
21

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equivalent, emitting about 392 tonnes of CO223, resulting in emissions savings of about 30,000
tonnes of CO2 each year.24
High efficiency steam turbines (also known as ultra steam turbines or steam reheat plants)
reduce fuel consumption by about 15% when compared to conventional steam turbine
technology. In this technology, the steam used in the turbine is re-heated to improve its efficiency
in the later stages, and driving steam condition is improved (as temperature and steam pressure
are increased). Thus when combined with the overall reliability and decreased maintenance of
steam propulsion, this type of ship may still be a good option for newbuild LNG vessels.
Slow speed diesel technology is more efficient than the DFDEs and high efficiency steam
turbines with an overall thermal efficiency approaching 48%. Utilizing newer cylinder lubrication
techniques, the slow speed engines are now capable of a wider range of speeds. In order to
maintain the cargo tank pressure in a safe condition, a reliquefaction plant (discussed later)
should be installed. This is a separate concept from maintaining tank pressure by utilizing the boil
off gas for main propulsion. In many ways this concept is viewed as a benefit as the vessels main
propulsion system is now separate from the vessels need for gas pressure management of the
cargo tanks. Adding the capability to slow speed diesel technology to burn natural gas25 is the last
step for implementation of slow speed technology on LNG carriers. This will allow the vessel
propulsion system to take advantage of segregated propulsion and gas management with the
ability to utilize gas for propulsion when it is commercially advantageous. As discussed
previously, the use of gas for engine fuel reduces harmful emissions. This type of vessel is likely
to be the next generation of LNG ship.
Propeller And Wake Design Improvements. For a 138,000m3 LNG ship approximately 27
MW of power is needed at the propeller to maintain operating speed of 19.5 kts. Fixed pitch
propellers are the norm in LNG shipping; however, dual skeg hull designs having two propellers
are beginning to be incorporated on DFDE/TFDE ships, as described above. As the ships have
increased in size (yet are still limited by draft restrictions), the designers have spent more time
looking at ways to improve propeller design, aft end vibration and wake flow around the stern
area. This has included changes to propellers / blades, the fitting of additional wake improvement
devices on the rudder, propeller boss and stern tube casting, as well as additional vortex
generators / flow deflectors on the aft end of the ship, including around overboard discharges, to
give a better wake flow into the aft end. These improvements can lead to more energy efficient,
reliable and manoeuvrable ships, reducing fuel consumption by up to one-third. While propeller
selection and aft end design normally occurs at the design stage, new developments in wake flow
devices may make retrofitting a good possibility to decrease fuel consumption, thereby
decreasing overall ship emissions.
In the future we may see further development in this area with ideas such as podded drives and
overlapping propellers, just two of many examples being suggested by designers that could be
used to further reduce fuel consumption, thus reducing the environmental impact of the
propulsion system. As these designs and options are evaluated, shipowners must find the right
balance among considerations of increased technology complexity, additional capex cost, and the

23

HFO CO2 Emissions Factor: 3.114 mt/mt

Assuming 80% of year (292 days) underway.
25
Excerpt of article, Innovative LNG Carrier Concept by Janne Kosomaa, Product and Application
Development, Wartsila, http://www.oceanenergynews.com/story.aspx?sid=11389
24

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effect on maintenance life cycle costs versus the potential improvements that the vessel may see
in performance.
Underwater Coating Technologies. A key link in the chain to driving ship efficiency is the
friction between the hull surface and water. Many marine coatings manufacturers are developing
or marketing lower friction energy-efficient coatings that could both reduce ship operational costs
and a ships environmental footprint. Additionally, the International Convention on the Control of
Harmful Anti-Fouling Systems on Ships, 2001, entered into force in September 2008, requires
ships to either replace, or over-coat, any existing organotin-based anti fouling systems. A number
of LNG ships have incorporated biocide-free silicone paint as the preferred method to coat their
ship hulls, citing fuel savings of 2-9% over traditional coatings. Unfortunately, however, a
definitive industry answer to the benefits of these coatings is not available. While all agree that
the coatings are less toxic to the environment both in their application by reducing VOCs and
during their in service period by not leaching biocides or potentially toxic materials into the ocean
environment, due to their very expensive material and application cost, there is still some
reluctance within the LNG industry to claim true fuel savings or efficiencies from the use of these
products. Claims of longer drydocking cycles, smaller paint volumes and lower life-cycle costs are
benefits of the newer hull coating technologies, as well as corresponding speed increases. These
positives are offset by negative claims of poor anti-fouling performance at lower vessel speeds or
when idle and high incidents of coating damage from rubbing and abrasion.
Reliquefaction plants. As described above, a recent development in the LNG shipping
sector has been the move away from steam driven vessels to the use of more efficient internal
combustion engines as the main means of propulsion. Historically LNG ships had steam boilers
because it was much easier with this steam propulsion to accommodate the natural LNG
vaporization (boil off) produced by the LNG cargo. With diesel electric engines, there are now
more options to accommodate the boil-off: burn the gas in a Gas Combustion Unit (GCU) with no
benefit to the vessel or the cargo owner, burn the gas in the engine benefitting the vessel or
reliquefying the gas to LNG and re-injecting it into the cargo tanks, benefitting the cargo owner
(reliquefaction).
The slow speed diesel engines on the Qatari vessels cannot burn methane in their engines
and due to the large quantity of natural boil off (176 tons26 of LNG/day), a reliquefaction plant is
present to maintain tank pressure and preserve the tank levels. The cargo containment systems
and the propulsion systems are completely separated. Efficiency gains are made with the use of
the slow speed diesel engines and delivering the maximum quantity LNG possible. However,
optionality is lost by not being able to burn methane in the engines when gas prices are lower
than HFO prices. In addition, the use of HFO as the primary fuel in the slow speed diesel engines
results in an increase in harmful emissions when compared to using gas for fuel.
With the introduction of dual-fuel/tri-fuel diesel electric engines it is possible to burn methane
in the engines, which would normally negate the need for reliquefaction of the boil-off. However,
with the higher fuel efficiency of the engines and the increased cargo capacity (resulting in
increased boil off), excess natural boil off occurs at speeds less than 19.5 knots. Burning the
excess gas in the GCU is uneconomical and results in increased CO2 emissions. With LNG
trading patterns moving away from point-to-point trades toward highly flexible worldwide trades,
scheduling inefficiencies can result in decreased speeds either on the ballast or laden legs
depending on the load or discharge ports. The ability to adjust the speed of the vessel, yet
26

266,000m3*98.5%*0.15%=393.015m3*0.448=176
10

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accommodate the excess boil-off created at lower speeds, is a major driver for fitting reliquefaction units on the larger LNG carriers with DFDE propulsion.
Savings from the addition of a reliquefaction plant onboard a DFDE ship also results on the
ballast leg when the ship needs to arrive with the cargo tanks ready to load (i.e. cold). Normally
an amount of LNG is carried (called heel) taking into account the natural boil off rate of the ship
and the length of the ballast voyage. Quantities of 5000m3 retained (when HFO is more
economical than LNG) are not uncommon for longer voyages. The benefit of a re-liquefaction unit
is that only ~500m3 of LNG needs to be retained as heel in order to keep the tanks cold, thus
increasing the amount of LNG available for delivery. Additional benefits are gained from the
reliquefaction plant when slower speeds are intentionally required and excess boil off is produced.
Instances when this occurs include canal transits or reduced speed due to adverse weather. The
exponential nature of the vessel fuel/speed curve has forced charterers and shipowners to
actively manage the speed of vessels and thus fuel consumption to reflect the economic
environment. Slow steaming is a tool used to reduce fuel costs and also to absorb excess
tonnage. Managing the boil off more effectively with the reliquefaction plant makes these
economic considerations a more achievable option.
The future of reliquefaction units is still uncertain as it is likely not an appropriate technology
for all LNG ships. Only when a vessel reaches a size where the natural boil off approaches the
fuel quantity required to maintain service speed is it preferable to have a reliquefaction unit as
reducing the boil off gas is a direct efficiency improvement. Additionally, the main benefit from a
reliquefaction plant is for the cargo owner, not the shipowner (who charters his vessel out with
fuel costs paid by the charterer). There is no incentive for a shipowner to invest in an expensive
reliquefaction plant if there is no concurrent return on the shipowners investment (through some
sort of efficiency sharing or performance incentives). Therefore, it is most likely that reliquefaction
units will only be fitted on the larger LNGCs which are ordered for long term charter or owned
and operated by the IOC or NOCs.
Other Design Criteria
Size. New build LNG vessel size has grown rapidly from a standard 125,000m3 capacity
up to a maximum 266,000m3. The larger cargo capacity together with the higher
propulsion efficiency allows these vessels to be competitive on long distance voyages
despite their initial higher capital costs, as these ships usually have a lower unit
transportation cost per voyage. Larger capacity usually means more efficient
transportation which can lead to reduced CO2 and other emissions on a per unit of cargo
delivered basis. The efficiency benefits of larger vessel size are offset by the reduction in
port flexibility. Most LNG loading and receiving terminals in existence today are not
designed to accept the largest LNG vessels in operation.
Elimination Of Ozone Depleting Substances. Newbuild LNG ships now generally
exclude the use of ozone depleting substances such as Halons (fire extinguishing
equipment), chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs) (used
in refrigerators, freezers, air conditioners and cargo containment/pipe insulation foam
blowing agents) and hydrobromofluorocarbons (HBFCs) (used in fire extinguishing
systems). Fire fighting specifications on new ships have been upgraded using
combinations of high expansion foam, water mist (Hi-fog) systems and other safer and
cleaner fire extinguishing agents to eliminate the need for environmentally damaging
substances. Deliberate emissions of ozone depleting substances are prohibited by
11

Paper PS6-2

MARPOL Annex VI, Reg 12 as well as the installation and use of ozone depleting
substances on newbuild ships.
Volatile Organic Compounds (VOCs). Reduction of VOCs during the ship design
process, shipbuilding process and during the outfitting of a ships accommodation spaces
are important environmental measures that should not be overlooked. IMOs MEPC 59
guidelines for the development of shipboard VOC management plans for crude oil
tankers, designed to minimize VOC emissions during loading of cargo, sea passage,
discharge of cargo and crude oil washing, go into effect 1 July 2010 and also apply to gas
ships for non-methane VOCs. Plans to prevent or minimize VOC emissions during ship
construction and post-delivery might easily be developed as an outgrowth of a ships
Inventory of Hazardous Materials but are not currently required for LNG ships.
Energy Efficiency In Design: Shipowners should also consider energy efficiency,
especially electrical loads during the initial design phase. As discussed below, there are
currently companies who audit existing ships to see where energy savings can be made.
In the future, we will see more audits of this type during the initial design of LNG ships.
Design improvements from this type of audit would likely include selection of particular
equipment or vendors based on energy efficiency ratings, the use of energy saving lights,
motion and time switches for lighting circuits, improvements to thermal insulation to
reduce heating, air conditioning etc.
Miscellaneous Areas
Wind. Windage impact on the accommodation and superstructure are now being
considered on the overall drag of the ship. We may still be a long way off from seeing the
ship looking like a modern racing car, but ideas are slowly coming to fruition on how to
reduce the drag, with at least one LNG owner having added some additional windage
deflectors to their current design to increase performance.
Reduction Of Heat Ingress Into The Containment System. Research into limiting heat
ingress into the containment system has generated new design ideas. As mentioned
above, vessels natural boil off may exceed fuel requirements, with excess either being
consumed in the GCU or reliquiefied and returned to the tanks. Designers are now
looking at ways of passively reducing this problem by limiting the amount of heat into the
containment system and reducing the boil off rate. This was not an issue when steam
was the main propulsion system and natural boil off alone was not near enough to
provide charter speed. Areas that are being looked at include:
o

Deck paint and possible insulation to reduce the effects of sunlight on heating the
cargo tanks. Reflective / light coloured decks rather than more traditional dark
colours.

Increasing insulation thickness surrounding the cargo tanks.

Possible introduction of a different inert gas (traditionally nitrogen) for the

containment insulation spaces, using a gas that will have a reduced thermal
conductivity as compared to nitrogen and hence reduce boil off.

Increased insulation thickness for the LNG transfer piping on deck and better
insulation on the return lines from the reliquefaction unit.
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Paper PS6-2

Ballast Water Treatment: Ballast water exchange at sea currently provides the only
approved available measure to reduce the transfer of harmful invasive species; however, it
presents issues for ship stability and safety and it isnt 100% effective. Organisms can remain
adhered to the sides of the tank and it is difficult to remove all residual water and sediment.
Redesigning ballast water tanks with sloping bottoms and flushing or washing systems may help
make this method become more effective. Alternative methods under development to eliminate
aquatic species transfer include: mechanical treatment methods (such as filtration and
separation), physical treatment (sterilization by ozone, UV light, electric currents or heat),
chemical treatment (adding biocides to kill organisms) or combinations of the above.
Ballast water filtration can occur before ballast water enters the ship. This allows native
species to remain in their native habitats; however, this method requires specialized equipment,
may not remove all microorganisms and some designs also require very large filters, or frequent
back flushing, due to clogging by sediment as well as species. UV light has been demonstrated to
be effective on microorganisms, but is less effective on organisms suspended in water. Thus
hybrid solutions combining more than one method of treatment are the most effective. There are
currently eight type approved ballast water treatment systems27 that have received final IMO
approval that make use of active substances as of September 2009. (Active substances means
that the systems use chemicals or create a chemical-like substance during the process of
treatment.). Two ballast water management systems that do not use active substances have
been certified by their respective Administrations.28
Meeting Lower Sulphur Fuel Directives. In the wake of recent EU regulation reducing fuel
sulphur limits while ships are at berth, the LNG industry identified several solutions for LNGC
vessel compliance. These solutions were 100% gas burning while in port, boiler modifications to
burn low sulphur marine gas oil (LSMGO), utilization of scrubber technology and utilization of an
equivalency approach (which may or may not be acceptable by relevant authorities). Each of
these approaches, though, has benefits and drawbacks. Fortunately, the EU commission has
recognized that operational issues remain for the retrofit of shipboard technologies to meet the
new sulphur standard. If a ship is not in compliance, an EU member state can look to evidence of
an approved retrofit plan with a designated completion date when assessing penalties for noncompliance.29

Steam propulsion LNG vessels are not designed to use gas as the primary vessel
fuel. When gas is used as a primary fuel at berth the vessel produces zero or very
low sulphur emissions. But this approach may not allow the vessels to operate in a
safe manner while manoeuvring or transiting in restricted waters in areas that will
demand lower sulphur requirements (such as ECA zones) without a major
modification to the fuel gas supply system. Burning gas as a primary fuel is also not
viable when the ship needs to be gas free to enter a shipyard for maintenance within
the ECA zone, when low tank pressure exists so that gas cannot be removed from
the tanks or when the vessel has no remaining LNG onboard (heeled out).

27

http://www.imo.org/includes/blastDataOnly.asp/data_id%3D26596/tableupdatedinSeptember20
09.pdf
28
NEI Treatment System VOS-2500-101 by the Office of the Maritime Administration, Marshall
Islands and the Hyde Guardian System by Lloyds Register as delegated by the Administration of
the United Kingdom.
29
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2009:348:0073:0074:EN:PDF
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Paper PS6-2

Boiler modifications to burn LSMGO. There are limited suppliers that can provide this
type of boiler modification, and the solution requires the purchase of expensive high
grade distillate. If an LNG vessel has separate tanks to store the high grade distillate,
the capacity of the storage tanks may not be sufficient to transit the larger ECA
zones. Additionally, the use of high grade distillates in varying loads have inherent
safety concerns, as gassing issues have previously caused boiler explosions. This
modification will not address future NOx or CO2 issues.

Scrubber technology is a viable potential option but has not yet been demonstrated
within the LNG shipping industry. There are scrubbing solutions on the market30 that
continue to allow the vessel to burn HGO and have been successfully applied to
diesel propulsion vessels to address SOx emissions requirements. However, these
available scrubbers at present will not address any future CO2 and NOx emission
regulations. The LNG shipping industry is still looking for a willing shipowner to be the
first user of this technology. The IMO and the EU are encouraging the use of
scrubber technology and have allowed for permitted trials; however, the EU requires
continuous emission monitoring during the trial period. The LNG ship may also apply
to the port state for an 18-month grace period from compliance with the EU Directive
to tune the systems and prove compliance. This technology could also address future
NOx and CO2 requirements depending on the scrubber solution.

Equivalency solution. Burning a mixture of HFO and BOG could produce sulphur
emissions equal to 0.1% sulphur distillate fuel emissions. This approach, however,
may not be compliant with the EU Directive for reduced sulphur fuel limits at berth.
This method will likely be used by some LNG shipowners for compliance as this
approach would only require minimum modifications. A correct mixture of HFO and
gas would produce sulphur emissions equal to or lower than that which would be
emitted when burning a 0.1% sulphur distillate fuel over the same period.

ENVIRONMENTAL IMPROVEMENTS BY OPERATION

Voyage Optimization. By carefully planning ship voyages, shipowners can optimize routes and
achieve efficiencies with improved emissions profiles. While the IMO has provided guidelines for
voyage planning, the ship operator can use the following techniques to create cost efficient
voyages with significant emissions reductions.

Speed, weather and schedule optimization When there is time in a voyage schedule,
the vessel can adjust vessel speed for the route, weather and currents. Schedule
modification may also allow speeds to be at the most efficient and adjusted thereby
minimizing the time that the vessel has to sail at full speed;

Optimized ship handling including trim adjustments, proper ballasting and use of
automated heading and steering controls can allow the ship to be more fuel efficient;

30

See Advanced Cleanup Technologies, Inc., www.advancedcleanup.com/, Hamworthy

Kristallon www.krystallon.com, Aalborg Industries, www.aalborg-industries,com, Marine Exhaust
Solutions EcoSilencer, www.ecosilencer.ca, and Ecospec, www.ecospec.com. This list is not all
inclusive but represent some of the available scrubber technologies available.
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Paper PS6-2

Proper hull maintenance including application of new coating systems, regular

inspections and propeller cleanings. The smoother the hull and propeller, the more fuel
efficient the ship will be;

Regular propulsion system maintenance to ensure that the ship can perform efficiently;

Better fleet planning to reduce the number and length of ballast voyages;

Review of energy management systems onboard and efficiency practices introduced

onboard the LNG ship. There are several companies31 that perform energy audits on
commercial ships, identifying and assessing operating practices and maintenance plans
that will achieve savings in fuel and reduction in ship emissions;

Reducing trading and sailing areas Movement to a regional LNG trade could reduce
overall global ship emissions by reducing the length and possibly the number32 of ballast
voyages; and

Energy conservation awareness training programs onboard ships that encourage savings
reductions through implementation of shipboard efficiency practices.

Emissions Reduction Policy Alternatives

In order to incentivize additional emissions reductions over the long term, the IMO (through
the MEPC) and the international community at large have discussed various policy alternatives,
including market based instruments, mandatory efficiency standards (both design and operations)
and fuel tax levies (including the establishment of an international GHG fund). In July 2009,
MEPC 59 agreed a future work plan for discussion of these policy alternatives, with the caveat
that any relevant outcomes from the UN Climate Change conference held in Copenhagen in
December 2009 would have to be included.
Market Based Instruments. With implementation of a maritime emissions trading scheme,
GHG itself cannot be traded, however, permits to pollute would be the operative currency. A
tonne of CO (or another designated emission) would be given a value, a carbon credit, which
can be traded. An LNG shipowner (or charterer) would have an allotment of credits (a cap)
based on the ship type, age and other factors. If a particular ship exceeded its cap, the shipowner
(or charterer) would have to buy more credits in order to keep operating. Operating below the cap
would leave excess credits that would be tradable on a market.
If an emissions trading scheme was developed, it would need to be global so that shipowners
will not shop for better flags of convenience based on the flag states stance on emissions
trading. The primary issues for creating a workable emissions trading scheme would be to
develop the average annual emissions output for each type of vessel, choose the benchmarking
date (by which all future emissions reductions would be calculated) and create the mechanism for
the sharing of credits between Owners, Charterers and possibly ship managers. Currently the EU
is considering the inclusion of ships and ports in emissions trading schemes. The United States
31

Two companies that provide energy audit services are Alaris Companies
www.alariscompanies.com, and Lloyds Register,
http://www.lr.org/Industries/Marine/Services/Consultancy/Ship+energy+services.htm
32
While LNG ships typically carry cargo only one way, some charterers have optimized cargo
movements by working with other charterers to deliver each others cargoes. This allows each
charterer to reduce the length of the voyage and decrease costs.
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Paper PS6-2

may act but the scale of any potential action is yet undetermined. Australia and New Zealand are
also contemplating emissions trading schemes for shipping. There is some concern that the IMO
will not react quickly enough and allow regional schemes to be implemented before agreement on
a global solution is reached.
Mandatory Efficiency Standards For New LNG Ships. As described above, the IMO,
through the MEPC, has created an Energy Efficiency Design Index33 for shipping. The effect,
however, is limited as it only applies to new shipping and it only incentivises design
improvements, not operational improvements. Before this index could be used to reduce the
impact of shipping on global climate change, further work needs to be done to develop how the
ships CO2 performance should be measured and what baseline would need to be set so as to
encourage lower emissions. These issues are not unlike the issues that would need to be
resolved to create an emissions trading scheme. Requirements for efficiency could be created for
shipbuilders and designers to mandate improvements in fuel efficiency or other performance
standards.
For existing shipping, the IMO could develop mandates for Owners or Operators
(charterers) to improve operational environmental measures. However, it is likely that such
operational mandates will likely only occur through broad emissions targets thereby allowing
Owners flexibility in deciding how their ships would meet the targets. MEPC 59 recently agreed
(in July 2009) not to make the development of a ship energy management plan mandatory for
shipowners.
Fuel Tax. A tax on fuel oil consumed by ships could be used to incentivize reductions in
shipping emissions. Tax receipts could be used to fund environmentally friendly projects in
developing countries.34 The tax would make fuel more expensive, but it would also encourage
shipping companies to conserve its use, since fewer tonnes consumed means less tax paid. If too
high, the levy on fuel tax would potentially create a modal shift from shipping to other, more
polluting (per tonne/mile) forms of transport. Also there is no direct net reduction of CO2, as
emissions are not actually reduced. Furthermore tax receipts could potentially be diverted from
the intended use toward environmental projects. An International GHG fund from bunker charges
or by direct contribution by ships is supported broadly by MEPC members.
A fuel tax may also have added benefits of reducing speed, as profit maximization could
determine the optimal speed for a given fuel price and CO2 reductions are prevalent at reduced
speeds.35 The IMO could set route-specific speed limits or choose a market-based cap and let
price signals work to control vessel speeds. This potential solution, however, may not work for all
segments of shipping and may not be appropriate for LNG ships. For instance, reducing the
speed of global LNG shipping will eventually require an increased number of ships to transport
the same amount of cargo. As all ships are designed for an optimum service speed (most efficient
speed and above minimum safe speed), a mandatory speed reduction (speed limit) will mean that
33

*IMO Circ. 471 Interim Guidelines for Voluntary Ship CO2 Emission Indexing (Operational
Energy Efficiency Index)
34
This principle, enshrined in the Kyoto Protocol, is referred to as Common but Differentiated
Responsibilities (CDR).
35
Impacts of Speed Reductions on Vessel-Based Emissions for International Shipping by James
J. Corbett, Haifeng Wang University of Delaware and James J. Winebrake Rochester Institute
of Technology. Paper 09-3742, in Session 270 Climate Change and Maritime Transportation,
Presented at 88th Annual Meeting of the Transportation Research Board, Shoreham, Blue Room,
Washington DC, 12Jan09.
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Paper PS6-2

some ships are operating efficiently and some are operating way outside their most efficient zone.
In many cases this will increase emissions.

CONCLUSION WHAT NEXT?

The LNG shipping industry can play an important role right now in achieving overall emissions
reductions through new designs and improved operations. Since most LNG ships in service today
are steam turbine propulsion, a stack exhaust gas scrubber solution to effectively remove SOx
(with additional technology to reduce CO2 and NOx) could be the best method of achieving a
major improvement in emissions reductions. Scrubbers could be added to a new vessels design
or retrofitted onto existing vessels and the vessels would retain their flexibility to continuing
trading and delivering LNG safely, reliably, and efficiently in the global market. Operationally, LNG
shipping has a unique advantage over other types of shipping by their flexible potential to reduce
SOx and CO2 emissions by burning primarily gas for fuel (reducing SOx emissions to near zero
and reducing CO2 by 15% when compared to HFO, due to lower carbon content of methane).
This is currently achievable on both steam propulsion and DFDE ships.
The LNG shipping industry, however, is a conservative industry and its high cost ships are
built for a long service life (30-40 years). As the large majority of ships are relatively new in the
market, the industry will be slow to change and adopt new efficiency improvement hardware
(major equipment) unless forced to do so by regulation or by the demand of Charterers.
While a considerable number of international environmental regulations for shipping have
been adopted, it is very likely that more regulations are on the horizon, including regulations for
NOx and CO2. Beyond these regulations to regulate specific air emissions, however, future
subject areas for additional regulation are harder to predict. Possibilities include noise emissions
regulations, alternative fuel policies (including biofuel or fuel cell technology), cold ironing for all
ships (using shore power at berth) or even restricted speed zones. What seems unlikely now may
become possible and economical in the future. The LNG shipping industry is no longer point to
point deliveries from the particular load and discharge ports; it is an international business. Thus,
LNG ships must continue to change with evolving local, regional and worldwide environmental
regulations.

17