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DIESEL-ELECTRIC LNG CARRIERS ENCOUNTER CHALLENGES AMID EU EMISSIONS REGULATIONS
DETAIL INFORMATION
WoodMac states that the intricate aspects of climate policy are set to divide the LNG carrier fleet into those who have and those who do not. Aging steam turbines and diesel-electric ships encounter rising compliance expenses due to emissions, whereas contemporary ME-GI dual fuel vessels (exhibiting low methane slip) are set to prevail as regulations become more stringent.
There are four distinct frameworks for efficiency and emissions policies in shipping between the EU and the IMO (along with one uncertain future framework): the EU ETS, FuelEU Maritime, and the IMO's CII and EEXI. The EU ETS has the most direct effect on LNG carrier operators since they release methane, which was incorporated into ETS penalty coverage at the beginning of this year. Methane slip is currently charged at $75 for each tonne of carbon equivalent on EU journeys (which includes EU parts of international voyages, as specified in the regulation).
According to Wood Mac, dual fuel diesel-electric ships will be profoundly impacted as the regulations become more stringent. FuelEU Maritime is being implemented gradually, introducing extra penalties and stricter fuel-reduction goals - at the significantly increased cost of EUR645 per tonne.