Mitsui OSK Lines (MOL), the Japanese shipping company with an operating fleet of almost 100 liquefied natural gas carriers, said it would use cash flow from the energy transportation boom to invest in a huge fleet of LNG-powered vessels of all types rather than wait for any future fuels.
The company, involved in all shipping sectors from oil tankers to car carriers and containerships, said it planned to launch 90 LNG-powered vessels by 2030 and has already announced an order for four car carriers.
“Strong demand for shipping services has given us more freedom on management decisions,” said MOL President and Chief Executive Takeshi Hashimoto in an interview with the Japanese financial daily newspaper Nikkei.
“The stepped-up investment will speed Mitsui OSK's shift towards LNG-powered vessels, which emit 25 percent less carbon-dioxide than ships running on conventional fuel oil,” stated Hashimoto.
Hashimoto noted that Mitsui was also investing in “green ammonia” as a key carbon-free fuel source for the future.
However, while ammonia is expected to start powering real-world vessels in the late 2020s, import limitations may pose a challenge for Japanese shipping companies.
“We don't have enough volume to use ammonia to fuel ships,” declared Hashimoto.
Can't wait
“We can't afford to wait for somebody else to produce the material,” he added.
The company announced in May 2021 that it would resume transporting ammonia for the first time in half a decade.
MOL will consider producing and exporting ammonia derived from natural gas.
“We will look into ammonia-related mergers and acquisitions as well,” he added.
MOL is making the LNG-powered shipping investment in response to growing demands from the logistics sector to reduce carbon emissions.
Volkswagen, for example, requires shipping companies to be using LNG-powered vessels to even bid on a contract.
Japan’s Honda Motor is also urging key suppliers to reduce emissions by 4 percent every year.
Another Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) has already revealed plans to replace 100 of its 215 large and midsize bulk carriers, as well as 30 to 40 of its 117 car carriers, with LNG-powered vessels by 2030.
“We'll be able to put in a few hundred billion yen into this soon thanks to improvements in our performance,” said NYK Line President and CEO Hitoshi Nagasawa.
