DOE Reduces Barriers for LNG Bunkering

The Department of Energy (DOE) announced an order that removes barriers for the use of liquefied natural gas (LNG) as fuel to power marine vessels. This announcement serves as a modification on a previous order under the previous administration issued to JAX LNG, a small-scale coastal LNG facility in Florida.

By issuing an Order on Rehearing, DOE is modifying an order originally issued in December 2024, clarifying that DOE is withdrawing the exercise of its jurisdiction under the Natural Gas Act (NGA) for ship-to-ship transfers of LNG for marine fuel use at a U.S. port, in U.S. waters, or in international waters. The only bunkering-related activity that will continue to be considered an export is when the receiving vessel is located in the territorial sea of a foreign country, including ports. DOE has left unchanged its authorization to JAX to export LNG via ISO container.

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

LNG bunkering has increased in recent years and is expect to continue amidst more stringent emissions regulations for shipping. According to the International Energy Agency's January 2025 Quarterly Gas Report, based on the current order book for vessels, the number of LNG-fueled ships is expected to almost double and reach over 1,200 vessels by 2028.