The Rise of LNG as a Marine Fuel in the United States

Liquefied natural gas (LNG) is (re)gaining regulatory support in the United States, with the country’s Department of Energy (DOE) having removed the barriers standing in the way of using LNG as a marine fuel to power ships.

As informed, the Department of Energy’s oversight was withdrawn under the Natural Gas Act (NGA) for ship-to-ship transfers of liquefied natural gas as a bunkering fuel at the end of February 2025.

With the DOE’s jurisdiction gone, the path has now been cleared for LNG bunkering to be performed in US ports, US waters as well as international waters—a move anticipated to “streamline” operations and make bunkering of this alternative fuel “more efficient and accessible.”

The US government noted in its statement, however, that bunkering-related activity in the territorial sea of a foreign country—including foreign ports—shall still be considered an export.

Commenting on the event, Tala Goudarzi, Principal Deputy Assistant Secretary of the Office of Fossil Energy and Carbon Management, shared: “Today’s action is a significant step in reducing regulatory burdens and helping this important segment of the LNG market continue to grow”.

The order issued by DOE reverses a December 2024 order issued to JAX LNG—a small-scale coastal LNG facility located at Dames Point near Jacksonville, Florida, that dispenses this clean fuel to various ship types, such as cruise ships, car carriers, petroleum tankers, and container vessels—whereby the government asserted new oversight for the use of LNG as a marine bunkering fuel.

The wider context, however, stretches further than that. In January 2024, following former US President Joe Biden’s administration’s decision to pause pending approvals of LNG exports to non-free trade agreement nations to review their environmental and economic impacts, critics saw it as a ‘reversal’ of the DOE’s previous stance, where it reaffirmed its commitment to liquefied natural gas export approvals.

Among the opponents of the decision, some, including the Pelican Institute and Liberty Justice Center, moved to file a lawsuit, seeking to overturn the decision, but the LNG playing field remained uncertain.

The most recent decision to ease the barriers revolving around LNG bunkering activity in the US comes on the heels of President Donald Trump returning to the White House for his second term.

Having declared a national energy emergency, President Trump announced a temporary freeze on offshore wind leasing, as well as a reversal of the US LNG export permitting pause, among other initiatives he reportedly plans to implement to bolster the role of ‘Big Oil’ companies in the energy sector.

Through the Prism of LNG

Despite the oscillations and stumbling blocks, the US LNG bunkering market has been estimated to reach a value of $1.52 billion by 2032, going up at a compound annual growth rate (CAGR) of 6.8% from 2025 to 2032.

Per Reuters, despite high prices coupled with inclement weather, in February this year, the United States exported the majority of its liquefied natural gas to Europe, with data suggesting that out of 8.35 million tonnes of LNG transported, 82% of it was destined for Europe.

From a wider context, the use of LNG as a marine fuel has skyrocketed in recent years and is expected to keep on ballooning, even as more stringent emissions regulations for shipping enter force.

According to industry coalition SEA-LNG’s annual “View from the Bridge” report, the growth of LNG-fueled vessels in operation globally per year has gone up by as much as 33%, having already risen from 590 ships the coalition unveiled in an October 2024 analysis to 683 units in January 2025.

What is more, LNG dual-fuel units reportedly accounted for 70% of alternative-fueled tonnage ordered in 2024, excluding LNG carriers, which marks an upward trend from the 43% recorded in 2023.

At the same time, Norway-based classification society DNV’s Product Manager AFI and Senior Consultant Kristian Hammer revealed that February 2025 saw 34 brand-new orders for alternative-fueled ships, among which 33 are boxships set to be powered by LNG, with the remainder being for ammonia-fueled cargo ships.

As per DNV’s Alternative Fuels Insight (AFI) platform, ‘parallel growth’ has been noted in the LNG bunkering space, believed to be at the cusp of major shifts as the number of units powered by this clean fuel rises over the next few years. Namely Hammer unveiled that in February 2025, eight new LNG bunker ships were booked, translating to a 50% uptick in this vessel segment’s order book.