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Japan's NYK to build 12 LNG-Fueled pure car, truck carriers by fiscal 2028-29

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Japan's NYK to build 12 LNG-Fueled pure car, truck carriers by fiscal 2028-29

Highlights

Replacing fuel for PCTC fleet since first LNG-fueled PCTC in Oct 2020

NYK to have 20 LNG-fueled PCTCs by fiscal 2028-29 from $1.8 bil investment

LNG gaining popularity as marine fuel in decarbonizing push

Japan's NYK said June 15 it will build 12 LNG-fueled pure car, truck carriers, or PCTCs, by fiscal year 2028-29 (April-March) under memorandum of understandings with Shin Kurushima Dockyard and Nihon Shipyard as it sees LNG as "bridge" shipping fuel in its efforts toward zero carbon emission ships.

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Under the MOUs, Shin Kurushima Dockyard and Nihon Shipyard will build for NYK six PCTCs each with a car carrying capacity of 6,800 and 7,000 units, respectively, for delivery over fiscal 2025-26 to fiscal 2028-29, NYK said.

Its consecutive building of LNG-fueled PCTCs is as part of its PCTC fleet replacement plan to achieve its environment management target, which targets to reduce CO2 emissions per ton-kilometer of transport by 50% by 2050, NYK said.

The company said the use of LNG fuel, in addition to hull modification to improve fuel economy, will contribute to a reduction of CO2 emissions by about 40% compared to ships using fuel oil.

NYK has been proceeding to replace its fuel oil-fueled PCTCs with LNG-fueled PCTCs, since its completion of the Sakura Leader as Japan's first LNG-fueled PCTC in October 2020.

The company, which plans to launch eight other LNG-fueled PCTCs by 2024, will boost its total number of LNG-fueled PCTCs to 20 by fiscal 2028-29 for a total investment of about Yen 200 billion ($1.8 billion), NYK said.

NYK also aims to introduce by around 2030 ships using more environmentally friendly marine fuels such as hydrogen and ammonia, it added.

LNG's viability

Almost 20% of the ships ordered so far this year will operate on LNG, with LNG as a marine fuel penetrating newbuilds in almost all sectors of maritime as environmental regulations in international shipping remain in focus, SEA-LNG chairman Peter Keller told S&P Global Platts recently.

"LNG is not so much a transition fuel as a fuel in transition," Keller said, adding that shipowners are already moving and will continue to move from the current fossil natural gas to first bio and then synthetic LNG.

LNG provides critical air quality benefits, meeting the 2020 air quality rules set by the International Maritime Organization.

Apart from these air quality benefits, LNG provides up to 23% reduction in GHG emissions with a clear pathway forward to IMO's decarbonization goals using bio and synthetic LNG, sources said.

According to them, waiting is not an option as LNG solutions are readily available and should be used, at least till the time zero-carbon fuels such as ammonia, hydrogen can be fully developed.

Meanwhile, a key IMO Marine Environment Protection Committee meeting was also underway from June 10-17. Key topics on the agenda include action to tackle climate change, including the adoption of short-term measures to cut carbon intensity of ships and discussion on the way forward with the next steps.