LNG too expensive: First cruise providers are switching back to diesel

Aidanova (Photo: Aida Cruises / Jens Hagens).
Aidanova (Photo: Aida Cruises / Jens Hagens).

LNG too expensive: First cruise providers are switching back to diesel

Aidanova (Photo: Aida Cruises / Jens Hagens).
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For a long time, gas was considered a cheap alternative to petrol and diesel. That has changed and is leading to the first changes in the shipping sector. Instead of LNG, the shipping company Aida wants to operate the ships Nova and Cosma again with marine diesel in the future.

Numerous cruise operators have invested in liners powered by LNG instead of diesel or heavy fuel oil in recent years. A number of gas-powered ships are currently under construction. However, the fact that LNG is considerably more expensive is hard on the shipping companies. So-called marine diesel is currently about half the price of gas.

That was different, because the at least partially introduced conversion to LNG was primarily marketed under the aspect of environmental protection, but behind it were more economic considerations. Natural gas was simply significantly cheaper than marine diesel for many years. The gas prices, which have skyrocketed since the Ukraine war, now make LNG operation not only unattractive, but also obviously uncompetitive.

Railway: Diesel is often cheaper than traction current

Shipping is by no means alone with this problem. Although LNG traction vehicles play almost no role in rail transport, companies suffer from extremely high electricity costs. At the moment it is even cheaper to use diesel traction under the contact wire because the fuel costs less than traction current. It is therefore not surprising that private providers in particular, who have both diesel and electric trains, are increasingly using their combustion engines. There are also some so-called "dual-mode" locomotives on the market. These are diesel-electric locomotives that can draw the required power either from an overhead line or from a generator driven by a diesel engine. It is precisely these vehicles that are currently frequently on the road with active combustion engines, despite the contact wire.

The procedure is often denied by the railway companies. Excuses are usually made, such as that the train has a non-electrified section on its route or that an electric multiple unit has failed. If you take a closer look at the routing of the rail vehicles, this may be true in individual cases, but it can be observed that even older diesel locomotives that have been parked for a long time have been reactivated and are sometimes pulled in front of long-distance trains. However: In the freight sector, "diesel under the contact wire" is even more common, since the main competitor is the truck, which can operate more cheaply than the freight train, despite the high fuel costs. It is probably due to economic considerations that attempts are being made to reduce costs with the help of diesel traction.

LNG price has increased sixfold

In the shipping sector, the price of marine diesel has increased approximately 2,5 times in the last two years. On the other hand, you have to pay six times as much for a natural gas tank filling. Costs have risen massively in other areas as well, because food for passengers and even port fees have in some cases become much more expensive. In addition, the shipping companies in the cruise sector are engaged in fierce competition and are therefore unable to pass on the price increases in full to their customers.

Because: Even with many passengers, money is less easy and everyone has a certain “pain limit” that they are willing to pay for a cruise. If this is exceeded, one is quickly open to offers from the competition, or spends one's vacation elsewhere or stays at home. It is therefore not surprising that Aida is trying to reduce operating costs by switching to marine diesel. Similar to aviation, fuel is the largest variable cost block for cruises.

Aida is not an isolated case

It should also be noted that the affected ships Nova and Cosma were delivered with dual-mode propulsion from the start. In concrete terms, this means that they can be operated with either LNG or diesel. At the time of purchase, this was necessary because LNG cannot be refueled everywhere in the world as it is simply not available in many ports. For Aida Cruises, the decision not to have bought any pure LNG ships is proving to be an advantage.

The German shipping company Aida is not alone, however, because Fjordline will also operate the LNG liners with diesel in the future. The Bergensfjord and the Stavangerfjord are affected. In contrast to the Nova and Cosma, these do not yet have a dual-mode drive, but were delivered as pure LNG ships. That will change, because by spring 2023 the Norwegian company will have converted to dual fuel, so that you can drive with marine diesel and thus reduce costs.

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Editor of this article:

Amely Mizzi is Executive Assistant at Aviation Direct Malta in San Pawl il-Baħar. She previously worked in the Aircraft and Vessel Financing division at a banking group. She is considered a linguistic talent and speaks seven languages ​​fluently. She prefers to spend her free time in Austria on the ski slopes and in summer on Mediterranean beaches, practically on her doorstep in Gozo.
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About the editor

Amely Mizzi is Executive Assistant at Aviation Direct Malta in San Pawl il-Baħar. She previously worked in the Aircraft and Vessel Financing division at a banking group. She is considered a linguistic talent and speaks seven languages ​​fluently. She prefers to spend her free time in Austria on the ski slopes and in summer on Mediterranean beaches, practically on her doorstep in Gozo.
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