A new study by UCL Energy Institute researchers has determined that the world’s growing fleet of ships that can run on LNG could potentially be at risk of asset value losses of $850 billion by 2030.

In this week’s ship.energy podcast, Mark Williams talks to the report’s co-authors, Marie Fricaudet, a PhD student at the University College London (UCL) and Tristan Smith, Associate Professor at UCL Energy Institute.

The report, ‘Exploring methods for understanding stranded value. Case study on LNG-capable ships’, alsofound that the write-down of the full $850 billion value at risk would not be not realised if LNG-capable vessels were retrofitted to run on scalable zero emission fuels (hydrogen and hydrogen-derived fuels such as ammonia). Under these circumstances, the potential loss is estimated at approximately 15-25% of their value (£113 billion-£185 billion if the LNG-capable fleet grows strongly this decade).

In the discussion, Fricaudet and Smith run through the main findings of the study and offer their perspectives on which fuel will be the long-term winner for shipping.

Marie Fricaudet is a PhD student at UCL. She holds an MSc in Public Policy from the University Sciences Po Paris and the London School of Economics and Political Sciences (LSE). She is lead author of the report ‘Exploring methods for understanding stranded value. Case study on LNG-capable ships’ and the academic article ‘Understanding the Scale of the Stranded Assets Risk in the Shipping Industry’ (pre-print version). 

Her interests and areas of expertise include financial climate risks, shipping decarbonisation and stranded assets risk in shipping.

Tristan Smith is Associate Professor at UCL Energy Institute, where he has worked for 12 years, and Director of University Maritime Advisory Services, where he leads a group of students focused on studying the global shipping industry. Together they combine expertise across engineering, economics, programming and optimisation, operations research, policy, business and finance. 

Dr Smith has a Masters’ degree in Engineering from the University of Cambridge, an MSc and a PhD in Naval Architecture from UCL.