LNG bunkering market is anticipated to grow at an exponential CAGR of 32.5% during the forecast period (2024-2031). LNG bunkering is a framework in which biomass is utilized optimally to produce multiple products and tries to be self-sustaining and not harmful to the environment. In 2022, global LNG bunkering activity experienced a decline due to the significant discounts of oil-based fuels compared to global LNG prices. Dual-fuel vessels that could switch to fuel oil opted for this alternative. However, by early 2023, LNG prices have once again become competitive with fuel oil, and the long-term prospects, marked by a rapidly expanding LNG-fueled order book and accelerated decarbonization measures, remain robust. Consequently, 2023 is widely anticipated to be a year of revival for the LNG bunkering market. With the global shipping fleet increasingly turning to LNG for decarbonization and compliance with stricter environmental regulations, the rationale for LNG bunkering remains strong.

Market Dynamics

Growth of global bunkering fleet and bunker size

According to the 2023IGU World LNG report, as of the end of April 2023, the global operational LNG bunkering and bunkering-capable small-scale vessel fleet has reached 35 units, containing both self-propelled and tug-propelled vessels and barges. An additional 14 vessels are in the order book, scheduled for delivery across the globe. The average size of these vessels is also growing, with the active fleet's average capacity reaching 7,700 cubic meters by the end of 2022, up from 6,900 cubic meters in 2021. The order book reflects an average capacity of 9,800 cubic meters.

Growing focus on sustainability has contributed to the growth of overall LNG trade globally

The increasing focus on sustainability is a significant factor driving the growth of the LNG bunkering market. With the maritime industry pursuing cleaner fuel alternatives, LNG has gained importance for its lower greenhouse gas emissions and reduced air pollutants compared to traditional marine fuels.According to the 2023IGU World LNG report, in 2022, global LNG bunkering activity declined due to the substantial discounts of oil-based fuels compared to global LNG prices, leading dual-fuel vessels to switch to fuel oil. However, in early 2023, LNG prices have once again become competitive with fuel oil, supported by the rapidly expanding LNG-fueled order book and increased decarbonization efforts. With growing demand, the LNG bunkering market is witnessing increased investment and infrastructure development, including the establishment of bunkering facilities and retrofitting of existing vessels for LNG fuel systems.The global shipping fleet's turn towards LNG for decarbonization, coupled with stricter environmental regulations, continues to strengthen the case for LNG bunkering. By the end of April 2023, the global operational LNG bunkering and bunkering-capable small-scale vessel fleet has reached 35 units, containing both self-propelled and tug-propelled vessels and barges.This shift towards sustainability indicates both regulatory compliance and the industry's efforts to reduce its environmental impact, contributing to the accelerated growth of the LNG bunkering market.

Market Segmentation

Our in-depth analysis of the global LNG bunkering market includes the following segments by end-userand type of LNG transfer:

• Based on end-user, the market is sub-segmented into tanker fleet, container fleet, bulk and general cargo fleet, ferries and OSV,and other end-users

• Based on the type of LNG transfer, the market is divided into mobile-to-ship,shore-to-ship, and ship-to-ship type of LNG transfer.

Industrial Biotechnology is Projected to Emerge as the Largest Segment

Among the end-users,the tanker fleet sub-segment is expected to grow significantly in the forecasting period. As per the information from GlobalData, 635 active LNG tankers are operating globally, out of which 100 were launched between 2020 and 2023. With growing demand, the LNG companies have further planned for 524 more tankers to double the LNG carrying capacity. This trend is further expected to accelerate primarily due to rising geopolitical tensions and volatility in LNG prices leading to growing demand for energy security. 

Regional Outlook

The global LNG bunkering market is further segmented based on geography including North America (the US, and Canada), Europe (UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia), and the Rest of the World (the Middle East & Africa, and Latin America). 

Europe is the Fastest Growing LNG Bunkering Market

• Raising geopolitical tensions mainly in the Russia-Ukraine war has forced regional economies to invest in domestic LNG infrastructure to improve energy security.

• Increasing focus on sustainable solutions has contributed significantly to the LNG bunkering market growth. 

Global LNG Bunkering Market Growth by Region 2024-2031

Asia Pacific Holds Major Market Share

The Asia-Pacific region holds the major share in the global LNG bunkering market and is expected to grow further a growing importance of environmental sustainability and adherence to stringent maritime emission regulations. Adopting LNG as a cleaner marine fuel aligns with these global environmental initiatives. Additionally, the region's expanding shipping activities, propelled by economic growth and increased trade, have generated a heightened need for cleaner and more efficient fuel options.As per the 2023IGU World LNG report,  Australia was the largest LNG exporter in 2022, shipping 80.9 million metric tons (MT) compared to 79.0 MT in 2021. The Asia-Pacific region remained the primary exporting area, recording total exports of 136.6 MT, up from 131.4 MT in 2021. The Asia-Pacificalso became a leading importing region, registering net imports of 160.9 MT, a 4.6 MT increase from 2021. 

Also, the Asia-Pacific is investing aggressively in the development of LNG infrastructure at key ports, creating a favorable environment for the growth of LNG bunkering services. Growing environmental considerations, rising maritime traffic, and infrastructure expansion position the Asia-Pacific region as a pivotal market for the increasing demand for LNG bunkering.

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the global LNG bunkering market include BP PLC, Exxon Mobile Corp., Shell Plc, and TotalEnergies SE among others.The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers, and acquisitions to stay competitive in the market. For instance, in 2022, Afyren SAS announced the launch of Afyren NEOXY, the first large LNG bunkering plant in France. In 2024, the production of bio-based carboxylic acids is expected to increase by 16,000 metric tons, saving 30,000 tons of carbon dioxide (CO2).

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the global LNG bunkering market. Based on the availability of data, information related to new product launches, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.