Liquefied Natural Gas as Ship Fuel: A Maltese Regulatory Gap Analysis

Abstract

With water covering almost three-quarters of the Earth’s surface and by factoring in that the maritime transport industry is holding the comparative advantage in relation to all other means, activities associated with the seas and oceans of our planet are extremely vital for the normal functioning of global trade. Furthermore, evaluating the opportunities of the so-called “Blue Economy” and possibilities for further growth should be at the epicentre of future development plans. Indicative examples -apart from various endeavours of maritime transport- include other sectors, like shipbuilding and repairs, fishing activities and related processes, as well as oil and gas exploration. All these provide significant economic output and facilitate job creation.

It is true that the shipping industry contributes to the carriage of vast quantities of cargo and maintains a crucial role in global trade; however, the specific industry is also responsible for significant quantities of greenhouse gas (GHG) emissions. IMO (MEPC) in 2018 adopted an initial strategy on the reduction of GHG emissions from ships. This plan envisages a reduction of CO₂ emissions per transport work, at least 40% by 2030, pursuing efforts towards even further reduction by 2050, compared to the 2008 levels. It is imperative for shipping and related industries to investigate and introduce more environmentally friendly (“cleaner”) ways of operation. In the search for these cleaner fuels, it is the responsibility of maritime stakeholders to make available (economically viable) fuel alternatives worldwide.

In view of an increasing trend in using Liquefied Natural Gas (LNG) as a marine fuel, setting up regulations and amend national legislation to allow the provision of LNG as a ship fuel in a safe manner, is a first stage which potential service providing countries have to successfully fulfil. The current analysis is focusing on the small island state of Malta, which apart from certain international aspects introduced by the International Maritime Organisation (IMO), it has to abide by European Union’s (EU) regulations and make LNG as a marine fuel available until 2025. Its main aim is to provide ways to cover the identified regulatory gap of the Maltese legislation, relating to ports, ship fuel bunkering and the local gas market.