LNG prices have slumped, and the prospect of an oversupply in the coming years is accelerating the adoption of trucks and ships powered by this fuel in China, the world’s largest importer, marking a significant shift from oil.
In April, one out of every three new heavy-duty trucks sold in China ran on LNG, a notable increase from one in eight the previous year. Similarly, the maritime sector is seeing a surge in LNG use, with sales in Singapore’s shipping hub rising tenfold compared to a year earlier.
Liquefied Natural Gas has long been considered an alternative to oil for long-distance transport. Its appeal has grown due to a sustained period of low prices following a peak in 2022. 
However, Liquefied Natural Gas is becoming increasingly viable in these sectors. Ira Joseph, a senior research associate at Columbia University’s Center on Global Energy Policy, notes that LNG is a “perfect fit” for trucking due to its competitive pricing compared to diesel.
Unlike the power sector, where coal and renewables often prevail, LNG offers a direct substitution for more expensive diesel.The adoption of LNG and EVs is projected to replace about 10% to 12% of China’s diesel and gasoline consumption this year, according to the China National Petroleum Corp.’s Economics & Technology Research Institute.
This marks the beginning of a long-term trend, with LNG truck sales rising every month since early 2022. By the end of last year, LNG-powered trucks constituted about 7% of China’s heavy-duty fleet.
The attractiveness of natural gas lies in its better fuel efficiency, greener emissions, and increased policy support in specific Chinese provinces compared to diesel, according to Shiqing Xia, a consultant at Wood Mackenzie Ltd.
This resurgence in LNG trucking is more sustainable than previous efforts in the late 2010s, primarily due to its lower cost compared to diesel and the absence of a cartel like OPEC+ to manage gas prices.
LNG’s cost competitiveness is also evident in shipping, where international regulations and government policies are pushing for reduced emissions. LNG now accounts for around 3% of the global marine fuels market, with gas tankers and container ships leading the way.
Despite its current advantages, several factors could hinder the growth of LNG. Environmental concerns, regulatory changes, and potential price spikes due to unexpected demand or supply disruptions could impact its adoption.
Moreover, some shipowners might opt for even cleaner alternatives like ammonia, bypassing LNG altogether.
Nevertheless, Michal Meidan from the Oxford Institute for Energy Studies believes that LNG trucking will remain a significant option, driven by government policies aimed at reducing pollution and diesel dependency, though its popularity may fluctuate with prices.
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