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MOL eyes 90 LNG-powered vessels by 2030 amid wider climate concerns

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MOL eyes 90 LNG-powered vessels by 2030 amid wider climate concerns

Highlights

Rotterdam bunker LNG prices higher than fuel oil prices

Critics fear LNG unsuitable for 2050 climate targets

Japanese shipping line Mitsui O.S.K. (MOL) has announced four new LNG-powered car carriers amid a push to launch 90 such vessels by 2030, despite wider industry concerns about the suitability of LNG as an environmentally-friendly fuel.

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MOL announced the agreement with Shin Kurushima Dockyard Co. Ltd. and Nihon Shipyard Co. Ltd. on Aug. 3, according to a company statement.

The company plans four 7,000 unit capacity car carriers running on LNG as their main fuel.

MOL' s total fleet capacity, including across its consolidated subsidiaries, as of June 30 was 735 vessels, the company reported in its H1 2021 results.

LNG has been touted by some industry sources as a viable option to meet International Maritime Organization climate goals for 2030, which target a 40% reduction in carbon intensity across the global fleet in comparison to 2008 levels.

However, many sources say it can only be of use as an interim fuel, in light of IMO goals for 2050, which target a 50% reduction in greenhouse gas emissions.

The World Bank is one body that has criticized the role of LNG in sustainable shipping.

S&P Global Platts assessed LNG as a bunker fuel at Rotterdam at $671.97/mt Aug. 3, equivalent to $13.15/Gigajoules, compared with $520/mt delivered or $11.92/gj for 0.5% sulfur fuel oil, the currently prevalent marine fuel.

LNG's operational costs as a bunker fuel are traditionally lower than those of fuel oil but a strong Asian market is pulling LNG from Europe and gas flows from Russia via Ukraine are low, which has supported Dutch gas prices.

LNG as a bunker fuel at Rotterdam has been pricing higher than delivered 0.5%S FO since July 26, Platts data showed.

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