certain quarters within the industry,
1 mainly due to economic unfeasibility, LNG is
nowhere near becoming the norm at present, in so far as its use as fuel for ships is
concerned. But developments at the International Maritime Organization (IMO) are
on-going with regard to reduction of sulphur content in ships’ fuels and particulate
matter (PM) together with curbing greenhouse gas emissions, mainly carbon dioxide
(CO2). These have a strong tangential relationship to LNG.
Be that as it may, LNG, whether carried as cargo or fuel on board ships, is prone
to imposing risks to human health and safety. This potential eventuality calls for a
preventive and mitigative international legal framework both from a public law
regulatory perspective as well as to address private law civil liability concerns and
associated commensurate compensation schemes for victims of such damage. Notably, however, the legal regimes dealing with LNG carried on board as cargo as
opposed to fuel are developed separately, and while the regulatory side of the
framework is rather complete in that both LNG carried as cargo and as bunkers
are covered, there is a gap in the private law domain. More specifically, while there
exists an international legal regime dealing with liability and compensation issues
relating to LNG carried as cargo, an exclusive and specific legal regime in respect of
shipboard LNG used as fuel is at present absent, which in the view of the present
authors, is a conspicuous deficiency and lacuna in the law.
The principal objective of this chapter is two-fold; one, to provide a brief
overview of current and contemporary developments in the field of regulatory law
pertaining to shipboard LNG carried as cargo or used as fuel, and the other, to review
the relevant convention regime on civil liability and compensation in relation to
carriage of hazardous and noxious substances to determine how it may apply to LNG
as a pollutant in the event of a casualty causing pollution damage when it is carried as
cargo or fuel.
In the following text, the regulatory law element of shipboard LNG is addressed
in Sect. 2 where the two international Codes dealing directly with transporting LNG
as cargo and using LNG as a fuel are discussed. Following that, the private law
regime governing the issues relating to liability and compensation in connection with
shipboard LNG is examined in Sect. 3. Sect. 4 provides a brief discussion on
Greenhouse Gas (GHG) emissions and LNG implications, and the chapter ends
with some concluding remarks which highlight the fact that it is noted somewhat
disappointingly that current statistics and relevant information point to the less than
enthusiastic posture of shipowners to switch to using LNG as fuel in the foreseeable
future.
1 See for example, Shell Marine Report in Marine Professional of 28 June, 2019 where it is reported
that “LNG as a marine fuel is expanding globally with bunker locations growing and LNG fuelled
ship segments broadening”; and that key supply locations are being developed to serve LNG fuel to
customers.
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J. Xu and P. K. Mukherjee
1 mainly due to economic unfeasibility, LNG is
nowhere near becoming the norm at present, in so far as its use as fuel for ships is
concerned. But developments at the International Maritime Organization (IMO) are
on-going with regard to reduction of sulphur content in ships’ fuels and particulate
matter (PM) together with curbing greenhouse gas emissions, mainly carbon dioxide
(CO2). These have a strong tangential relationship to LNG.
Be that as it may, LNG, whether carried as cargo or fuel on board ships, is prone
to imposing risks to human health and safety. This potential eventuality calls for a
preventive and mitigative international legal framework both from a public law
regulatory perspective as well as to address private law civil liability concerns and
associated commensurate compensation schemes for victims of such damage. Notably, however, the legal regimes dealing with LNG carried on board as cargo as
opposed to fuel are developed separately, and while the regulatory side of the
framework is rather complete in that both LNG carried as cargo and as bunkers
are covered, there is a gap in the private law domain. More specifically, while there
exists an international legal regime dealing with liability and compensation issues
relating to LNG carried as cargo, an exclusive and specific legal regime in respect of
shipboard LNG used as fuel is at present absent, which in the view of the present
authors, is a conspicuous deficiency and lacuna in the law.
The principal objective of this chapter is two-fold; one, to provide a brief
overview of current and contemporary developments in the field of regulatory law
pertaining to shipboard LNG carried as cargo or used as fuel, and the other, to review
the relevant convention regime on civil liability and compensation in relation to
carriage of hazardous and noxious substances to determine how it may apply to LNG
as a pollutant in the event of a casualty causing pollution damage when it is carried as
cargo or fuel.
In the following text, the regulatory law element of shipboard LNG is addressed
in Sect. 2 where the two international Codes dealing directly with transporting LNG
as cargo and using LNG as a fuel are discussed. Following that, the private law
regime governing the issues relating to liability and compensation in connection with
shipboard LNG is examined in Sect. 3. Sect. 4 provides a brief discussion on
Greenhouse Gas (GHG) emissions and LNG implications, and the chapter ends
with some concluding remarks which highlight the fact that it is noted somewhat
disappointingly that current statistics and relevant information point to the less than
enthusiastic posture of shipowners to switch to using LNG as fuel in the foreseeable
future.
1 See for example, Shell Marine Report in Marine Professional of 28 June, 2019 where it is reported
that “LNG as a marine fuel is expanding globally with bunker locations growing and LNG fuelled
ship segments broadening”; and that key supply locations are being developed to serve LNG fuel to
customers.
692
J. Xu and P. K. Mukherjee