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German shipowners want state aid for LNG vessels

The German shipowners' association along with several shipping organizations are now calling on Germany's federal government to promote LNG as fuel for newbuildings.

Germany's shipowners' association VDR, Verband Deutscher Reeder, and numerous industry organizations are now calling for the German federal government to introduce state aid for newbuildings that run on LNG fuel, according to a statement from VDR.

The association stresses that Germany occupies a strong position in LNG technology which could be further boosted by introducing an incentive scheme for newbuildings built to either exclusively or partially sail on LNG fuel. This would also help carriers reduce sulfur and particle emissions, add the organizations in the statement.

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But it will take an incentive scheme to open the market for LNG-driven vessels, says VDR CEO Ralf Nagel.

"Without a comprehensive incentive scheme from the federal government for the construction and retrofitting of LNG-powered ships, it will not be possible to dismantle the barriers to market entry. Not a single LNG-powered ship has been commissioned without government subsidies throughout Europe to date. As a leading maritime nation, Germany ought to be taking on a pioneering role," he says.

Furthermore, the organizations also call for the government to review the rules relating to operations and safety on LNG vessels - for instance to allow vessels to tank LNG fuel while loading and unloading cargo. The organizations also note that LNG vessels, due to comprehensive safety measures, hold the lowest number of reported operating accidents.

The newbuilding price for ships that can sail on both regular bunker oil as well as LNG, duel-fuel drive, is often 25 percent higher than regular ships, due to factors including extra pipes and tanks - and it is this aspect that German carriers want help with to spur them to order new vessels.

An incentive scheme would also create new highly paid jobs in sectors working with LNG technology, both at the coasts but also in the country, when LNG as ship fuel takes off, argue the industry associations.

Analysts: Weak LNG market ahead

DNV GL: Shipping slow to embrace LNG

Lloyd's Register believes in LNG

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