Toyota to invest heavily in building 20 LNG-powered car carriers

2017-09-15 08:00

In preparation for environmental regulations taking effect in 2020, Toyota Motor Corporation, a Japanese automotive giant, proactively plans to order 20 environmentally friendly LNG-powered car carriers for transporting vehicles to its global markets.

According to Japanese media reports, three Japanese shipping companies engaged in automobile transportation—Nippon Yusen Kaisha, Kawasaki Kisen Kaisha, and Toyofuji Shipping, a subsidiary of the Toyota Group—plan to order 20 vessels in the coming years, with the first batch comprising 3-6 vessels. The total estimated cost for all vessels is approximately 200 billion yen (approximately US\$1.83 billion). This order is still in its initial stages, and a specific timeline has not yet been provided.

Reports suggest that Kawasaki Heavy Industries, Mitsubishi Heavy Industries, Imabari Shipbuilding, and JMU Shipyard have been identified as potential shipbuilders.

Toyota currently operates 60 vessels monthly for seaborne automobile transportation. Over 20 of these are 7,000-car capacity carriers, primarily used on North American routes. These vessels currently use high-viscosity marine fuel oil with a high sulfur content, which is expected to be replaced by LNG-powered car carriers.

Data from the Toyofuji Shipping website, a subsidiary of the Toyota Group, shows that the company currently operates 23 vessels, with 6 used for domestic automobile transportation and 17 for international automobile transportation. Furthermore, in August of this year, a naming ceremony was held for a 3,000-car capacity car carrier, the "Trans Harmony." This vessel will be completed in December of this year, delivered in January of next year, and will operate on Asian routes.

To reduce sulfur oxide emissions, the International Maritime Organization decided last year to reduce the sulfur content limit for marine fuel to one-seventh of the current level starting in 2020. Toyota's preparations may encourage other automakers to take similar action.

It is understood that approximately 100 LNG-powered vessels are currently operating worldwide, mostly in Europe and North America. However, these vessels are limited to short-distance ferries and passenger ships . Most car carriers and other merchant ships have yet to respond to the upcoming regulations.

Compared to conventional vessels, LNG-powered vessels cost over 1 billion yen more to build, and these vessels also require infrastructure investment, including LNG tanks and related equipment. High costs have hindered the widespread adoption of next-generation vessels.

Previously, Nippon Steel and Sumitomo Metal Corporation planned to install emission cleaning systems on vessels transporting steelmaking materials starting in 2019. However, apart from Toyota, other automakers have not yet announced how they will address the new regulations.

At the same time, stricter maritime regulations have driven the development of Japan's LNG fuel supply network. At the end of 2016, the Japanese central government, Yokohama City, Nippon Yusen Kaisha, and other companies announced plans to invest approximately 6 billion yen by around 2020 to develop Yokohama Port as an international LNG refueling station between Asia and North America. Recently, to promote LNG refueling in Asia, relevant Japanese authorities and the Maritime and Port Authority of Singapore (MPA) decided to establish a research working group to conduct a feasibility study on LNG refueling for car carriers between Japan and Singapore. This working group will include Japan's three major shipping companies: Kawasaki Kisen Kaisha, Nippon Yusen Kaisha, and Mitsui O.S.K. Lines. The research will focus on technical details such as fuel tank capacity and refueling to assess the feasibility of operating LNG-fueled car carriers between Japan and Singapore.

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