NLNG calls for policies to boost decarbonisation in LNG shipping

NLNG has called for policies and regulations to be tailored to the uniquiness and challenges of the LNG shipping industry to drive decarbonisation and prepare for a net-zero future.

Speaking during a panel session on LNG Shipbuilding and Transportation at the 29th World Gas Conference (WGC2025) in Beijing, China, NLNG’s Deputy Managing Director, Olakunle Osobu, stressed that policies should also incentivise innovation across the vessel lifecycle while supporting unproven but promising technologies.

Osobu, who was represented by the Manager of NLNG’s Commercial Contract Management, Tolu Longe, said: “Unlike shipping, where the IMO provides global oversight, other sectors face fragmented national regulations.

“More cohesive policies could accelerate decarbonisation, particularly in emerging areas like onboard carbon capture. Modular capture systems exist, but without regulatory and economic frameworks, they remain commercially unviable.

“Financing remains a major hurdle. The financial sector has been slow to align with decarbonisation goals, often prioritising traditional credit metrics over climate impact.

“This disparity is especially pronounced in regions like Africa, where access to subsidies or low-cost financing is limited. Partnerships with institutions like Afrexim Bank and the IFC can help bridge the gap, but broader industry support is needed.”

He stressed for innovation in decarbonisating the LNG shipping industry to reduce costs, noting that artificial intelligence and data analytics offer key efficiencies.

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Osobu added: “The shipping industry is undergoing a pivotal transformation driven by decarbonisation and the shift toward greener fuels.

“Fleets must adapt – whether through dual-fuel systems, cleaner fuels like LNG, or emerging alternatives such as ammonia and hydrogen. Yet this transition presents a dilemma for shipowners.

“Retrofitting vessels or investing in new ones requires significant capital, but current regulations do not translate into premium pricing for cleaner shipping.

“Consumers remain unwilling to pay more, forcing shipowners to absorb the costs. Meanwhile, financiers have been slow to respond to these market shifts. As a result, lower charter rates may persist for years.”

Osobu, according to a statement issued by NLNG on Monday, May 26, 2025, noted that the IMO’s net-zero mandate requires shipowners to reduce GHG emissions intensity by 2% by 2028.

He emphasised that meeting this target through dry-dock retrofits alone would be prohibitively expensive and time-consuming, adding that scalable solutions that can be implemented during operations are critical.

He stated that smart systems can optimise fuel consumption by adjusting engine performance, vessel speed, and routing based on real-time factors like weather and congestion.

This, he added, enables just-in-time arrivals, minimizing idle time at ports.

Osobu further noted that AI can enhance safety through advanced navigation systems, reducing collision risks – a growing concern as vessel sizes increase.

The Star