LNG Offers Up to 5-Year ROI Under IMO 2028 Framework: Sea-LNG

Sea-LNG says LNG delivers the strongest investment case for shipowners navigating new decarbonisation rules. Image Credit: Ship & Bunker

Gas lobby Sea-LNG asserts that under the IMO 2028 framework, agreed during the MEPC 83 meeting, LNG provides the best return on investment for shipowners seeking to comply with the new decarbonisation regulations.

The study, using the Z-Joule cost of compliance calculator, compares LNG dual-fuel vessels with alternatives like methanol, ammonia and VLSFO across various operational scenarios.

The findings reveal that LNG dual-fuel vessels provide the shortest payback period—between 4.5 and 5 years— compared to VLSFO due to lower compliance costs driven by LNG's reduced greenhouse gas fuel intensity (GFI), it said in an emailed statement on Wednesday. 

This is in stark contrast to methanol and ammonia-fuelled vessels, which fail to meet a positive return over a 15-year investment horizon.

LNG's cost-effectiveness is further evident on the Rotterdam-Singapore container trade route, where both IMO and EU decarbonisation regulations shorten the payback period to approximately 3.5 years.

"Here the payback for LNG fuelled vessels was reduced to about 3.5 years mainly due to the effect of FuelEU Maritime in the early years of the analysis period," it said.

SEA-LNG's research underscores LNG's commercial advantage, offering shipowners flexibility through fuel optionality and access to a well-established global infrastructure.

The group also emphasises that while many details of the IMO framework still need clarification, the current approach presents a viable and practical pathway for decarbonisation.

"The industry continues to make major investments in the LNG pathway, Peter Keller, Chairman of SEA-LNG, said.

"These ships can use LNG, bio-methane and e-methane, and reduce greenhouse gas emissions and cut local pollution today."