A new analysis by Norway-based energy research firm Rystad Energy indicates that the global availability of bio-liquefied natural gas (bio-LNG) is unlikely to keep pace with the anticipated demand from the shipping industry. This raises concerns about bio-LNG’s effectiveness as a widespread solution for reducing carbon emissions in maritime transport, reports gasworld.
Rystad forecasts that the shipping sector’s demand for bio-LNG will reach 16 million tonnes of fuel oil equivalent by 2028. However, the report points out that most biomethane, which is the gas used to produce bio-LNG, is already committed to other industries. Specifically, over 84% of biomethane is used for generating electricity, and 10% is allocated to road transport. This leaves only 6% available for other purposes, including the maritime sector.
Junlin Yu, Senior Data Analyst, Shipping at Rystad Energy, commented, “Demand for biodiesel, if unrestricted, outstrips the total supply. The situation with bio-LNG is also constrained, with challenges for both production and allocation capacity.”
While bio-LNG is considered a convenient “drop-in” fuel for ships that already use LNG and is generally more affordable than biodiesel, securing enough supply may be difficult due to competition from other sectors. Its compatibility with existing LNG fueling and engine systems has made it an attractive option for meeting short-term environmental regulations.
The Rystad report also emphasizes that only biofuels with sufficiently low lifecycle greenhouse gas emissions will meet the new greenhouse gas fuel intensity (GFI) regulations set by the International Maritime Organization. This puts additional pressure on shipowners to ensure a reliable and compliant supply of fuel.
Yu added, “To navigate the changing regulatory landscape, shipowners must act quickly, securing dependable biofuel supplies and aligning with GFI targets. In the race for cleaner shipping, success hinges not just on choosing the right fuel, but on securing it ahead of competitors.”
The report highlights a broader challenge with biofuels, which includes not only bio-LNG but also methanol, ethanol, and biodiesel made from hydrotreated vegetable oil. If left unchecked, the shipping industry’s demand for biodiesel alone could exceed 140 million tonnes by 2028. However, sustainable production of biodiesel is estimated to be capped at just 40 million tonnes when environmental risks and sustainability limitations are taken into account.
Studies suggest that bio-LNG could potentially meet up to 3% of the total energy demand for shipping fuels by 2030 and up to 13% by 2050. There’s also further potential if it’s used as a blend with traditional fossil LNG. These projections heavily rely on specific government support and the increased production of sustainable biomethane.
One such policy driving this shift is the EU’s FuelEU Maritime initiative, which becomes effective this year. This regulation aims to progressively reduce the greenhouse gas intensity of marine fuels over time.
According to research group Wood Mackenzie, FuelEU Maritime could significantly boost the demand for bio-LNG, potentially reaching 12 billion cubic meters by 2050. This could translate to several million tonnes of fuel oil equivalent and form a significant portion of future marine fuel demand if achieved.
Wood Mackenzie also observes that bioenergy is emerging as the leading “drop-in” solution for decarbonizing sectors that are difficult to electrify, such as shipping and heavy transport.
However, the firm cautions that while bio-LNG can benefit from existing LNG infrastructure, it needs to rapidly increase its production, reduce costs, and overcome policy and supply challenges to effectively compete with other low-carbon fuels.
