The Europe LNG bunkering market is expected to grow at a CAGR of more than 5.25% over the period of 2020 - 2025. Stringent environmental regulations imposed by local government bodies and IMO to curb emissions coupled with the abundant availability of natural gas is expected to stimulate the industry growth of the market studied. However, the lack of LNG bunkering infrastructure in some countries, and the effect of COVID-19 are likely to have a negative impact on the demand for LNG bunkering activities in the region during the forecast period.
- Ferries & OSV end-user dominate the European LNG bunkering market during the forecast period.
- The orders and deliveries of LNG-powered vessels are increasing, and the reduced natural gas prices in 2020 had marked the beginning of expanding opportunities for such vessels in the coming years.
- Norway is expected to dominate the LNG bunkering market in Europe during the forecast period.
Key Market Trends
Ferries & OSV Segment to Dominate the Market
- Ferries are vessels used to carry cargoes across the water. A passenger ferry is used as a water bus or water taxi to travel from one place to another. Various types of ferries include double-ended, hydrofoil, hovercraft, catamaran, roll-on/ roll-off, cruise ferry (RoPax), fast RoPax ferry, and others.
- These vessels majorly operate on heavy fuel oil and marine gas oil. However, government regulations regarding emission of sulfur, carbon dioxide, and other pollutants have been encouraging the use of LNG as fuel in the vessels.
- In the next five years, the LNG based ferries and OSVs are projected to increase, considering a large number of LNG fueled ferries and OSVs on order. This is likely to increase the demand for LNG bunkering services in the forecast period.
- However, with the regulations related to sulfur content in the fuel, The option of using LNG as a fuel is attractive to these types of the vessel because of the operating profile as well as for economic, regulatory, and environmental reasons.
Norway to Dominate the Market
- Norway has always been a pioneer country in the global LNG bunkering market. In 2000, the world’s first LNG-fueled vessels, the Glutra car and passenger ferry were made operational in Norway. Seventeen years later, in 2017, Hammerfest, Europe's largest dedicated LNG bunkering station with 1250 m3 storage and a pump capacity of 90 ton/hour was made operational in Norway.
- The focus on climate issues remains high in Norway with the Norwegian government setting ambitious and stern emission norms to align itself with the greenhouse gas emissions targets of the Paris agreement and within the EU emission standards.
- To counter the increasing global concerns regarding the harmful emission of pollutants from marine transportation, Norway invested early in LNG ships and was helped by the Norwegian NOx fund, which was initiated by the Norwegian government.
- Moreover, LNG exports from Norway have been increasing in the past years, with the expansion of existing LNG liquefaction facilities, which is expected to bolster the market.
- Hence, This has significantly increased the demand for LNG bunkering facilities in Norway during the forecast period.
The Europe LNG bunkering market is moderately consolidated. Some of the major players in this market include Royal Dutch Shell Plc, Total SA, Crowley Maritime Corporation, Nauticor GmbH & Co. KG, and Gazpromneft Marine Bunker LLC.
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