LNG favors compliance with European greenhouse gas reduction targets

SEA-LNG has determined that for every 10% of bio-LNG dropped in and blended with LNG as a marine fuel, a vessel can achieve two extra years’ compliance with the Annual Efficiency Ratio curve used to secure preferable funding under the Poseidon Principles.

February 26, 2021. New analysis from SEA-LNG, the coalition for accelerating LNG as a marine fuel, has determined that for every 10% of bio-LNG dropped in and blended with LNG as a marine fuel, a vessel can achieve two extra years’ compliance with the Annual Efficiency Ratio (AER) curve used to secure preferable funding under the Poseidon Principles. This extends the average seven-year additional competitive advantage for Poseidon Principle loans achieved with LNG alone.

The analysis compares LNG plus bio-LNG from a zero-carbon, sustainable source with conventional vessel fuels such as HFO, VLSFO and MGO. Bio-LNG is fully compatible with existing LNG infrastructure and technologies and increasingly recognised as a sustainable fuel that can be ‘dropped in’ and blended with LNG. Therefore, it represents one of the most viable pathways to decarbonisation currently available to owners.

LNG fuel delivers greenhouse gas (GHG) reductions of up to 21% Well-to-Wake and up to 28% Tank-to-Wake. This means that LNG vessels perform well according to Poseidon Principles’ funding criteria, which were instigated by financial institutions to improve strategic decision-making and shape a better future for the shipping industry and society.

The Poseidon Principles measure progress towards these objectives using an AER scoring. This follows an ever-tightening decarbonisation trajectory index to 2050, requiring a vessel’s aggregate carbon emissions intensity to improve. This measure is intended to align with and incentivise the IMO’s goals of reducing the total annual GHG emissions by at least 50% by 2050.

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