The report warns that the LNG fleet’s contribution to global greenhouse gas emissions is fundamentally incompatible with efforts to limit global warming to 1.5°C. Despite this, industry actors are pressing ahead with large-scale fleet expansions, risking a looming overcapacity crisis that threatens global climate ambitions and financial stability in the energy market.
Rachel Eunbi Shin, Gas Team Consultant at Solutions for Our Climate (SFOC), criticised the continued financing of liquefied natural gas (LNG) carriers by major financial institutions, describing it as a contradiction to their public climate commitments.
According to her, “There’s a clear contradiction in major banks spending billions to finance LNG carriers while simultaneously pledging to reach net zero by 2050.
“Many of these same institutions have policies against funding upstream and downstream LNG infrastructure, yet continue to back the ships that transport this fossil fuel,” she said.
She noted that with freight rates at historic lows driven by oversupply, further investment in LNG carriers is not only damaging to the climate but also economically irrational.
Her comments come in the wake of the International Maritime Organization’s (IMO) adoption of its Net-Zero Framework at MEPC 83 in April, which introduces greenhouse gas (GHG) reduction targets and fuel levies starting from 2028.
“The solution to reducing shipping emissions couldn’t be clearer,” Shin added. “Stop building ships we don’t need.”
By Dare Akogun