Opinion piece by Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific & India, Maritime at DNV

How can the maritime industry globally move faster on its decarbonization journey?

Which ‘low hanging fruit’ can we draw on as we struggle to get started on the energy transition to cleaner and low carbon fuels?

Let’s consider, for a start, the important role which can be played by biofuels.

Biofuels – in the form of methane, methanol, or fuel oils – are seen as a convenient way for shipping companies to reduce their carbon emissions because of their ability to be used as a “drop-in” fuel.

As highlighted in DNV’s new whitepaper – “Biofuels in shipping” – biofuels can be mixed with similar versions of fossil fuels and used to power existing engines.

This make biofuels an extremely attractive decarbonization solution for shipowners as they negate the need for large-scale capital investments which are necessary for other decarbonization options, such as the retrofitting of engines to dual-fuel capability.

Our whitepaper acknowledges that the usage of biofuels in shipping has so far been extremely low. Before 2022, this was limited to a number of demonstrations, pilots and trials carried out onboard ships.

However, in 2022, this seemingly accelerated with reports of around 930,000 tonnes of blended biofuel being bunkered in Singapore and Rotterdam.

“Whilst this might seem like a large number, it still accounts for just 0.1% of total maritime fuel consumption of 280 million tonnes of oil equivalent (Mtoe) per year,” states my colleague Eirik Ovrum, Principal Consultant in DNV Environment Advisory and co-author of the biofuels whitepaper.

Singapore tests biofuels for shipping

In Singapore, we know there’s been work done already to put biofuels to the test for shipping.

At one of our scheduled webinars in February this year, Anglo American’s Global Head of Shipping Peter Lye agreed and told webinar participants that his company was already working with its partners to explore the use of biofuels as a means to reduce carbon intensity in its ocean freight operations.

It had successfully trialled (in mid-2021) a biodiesel blend produced in Singapore by Alpha Biofuels from used cooking oil (UCO), to power one of its charter vessels during a voyage from Singapore to South Africa.

The Global Centre for Maritime Decarbonisation (GCMD) reported, also in February this year, that it had completed trialling two supply chains of biofuel blends sourced from different origins.

The supply chain trials, which involved 19 industry partners, entailed tracing biofuels from their production sites outside Singapore, to Singapore where the fuels were blended and bunkered. Lab testing of the fuels continued until they were consumed onboard.

Despite its nascent stage, Sanjay Kuttan, Chief Technology Officer at the GCMD said “there is a lot we can do right now that can make a big difference” during DNV’s ‘Live from Singapore’ webinar.

Ship operators can take on board low-carbon biofuels for bunkering without having to make any changes to fuel tanks or engines. He emphasised that we can also cut emissions immediately by introducing smart energy efficiency measures.

Practical considerations for biofuels onboard

We in DNV make a point of drawing attention in our whitepaper to the “practical considerations for use of biofuels onboard”.

Although biofuels are regarded as relatively easy and straightforward to use, they still have the potential to damage equipment onboard a vessel if not dealt with correctly.

Due to the lack of long-lasting trials, there is a shortage of experience with biodiesels and bioliquids, and their compatibility with existing onboard machinery.

Therefore, it is important to evaluate biofuels on a case-by-case basis to make sure that the fuel specification and quality is compatible with the intended applications onboard the vessel.

Biofuels are made by converting organic matter, also known as biomass, into a fuel product. Biomass absorbs CO2 from the atmosphere during growth, which gives biofuels the potential to be carbon-neutral, even though CO2 is emitted when combusting most biofuels.

The sustainability of biofuels is dependent on the feedstock. Biomass sourced from agricultural main products is usually referred to as conventional and not sustainable. Biomass from non-food or non-feed sources is termed advanced and has the potential to be regarded as sustainable, depending on the criteria.

Decarbonizing shipping through biofuels

DNV’s whitepaper assesses the current and future global biofuel production capacity by drawing on its own database of biofuel plants currently in operation, as well as visible planned biofuel production projects. The database identifies around 5,000 biofuel production facilities worldwide and predicts how biofuel production is expected to develop through to 2050.

According to the paper, global production of advanced biofuels stands at 11 Mtoe per annum in 2023. A significant number of projects involving production from advanced biomass sources are expected to come on-stream between now and 2026, bringing total sustainable biofuel production levels up to 23 Mtoe per annum.

Whilst this represents strong growth, it still falls short of the volume of biofuels that shipping would need in order to make a big impact on decarbonization efforts.

We must ask how much of the biofuel supply can shipping obtain?

If shipping was to decarbonize fully by 2050 primarily using biofuels, in combination with energy efficiency measures, 250 Mtoe per annum of biofuels would be required.

Our whitepaper estimates that the global sustainable and economical supply of biofuels could reach 500–1,300 Mtoe per year by 2050, which means that shipping would need between 20% and 50% of this supply if it was to decarbonize primarily using biofuels.

Total global energy demand today is around 10,500 Mtoe per year and shipping accounts for around 3% of this. It is, therefore, unlikely that shipping will be able to obtain such a high share of biofuels.

Shipping is considered a hard-to-abate sector and there are many in the industry who feel like it should be prioritized for biofuel supply over other sectors like road transport, due to the difficulties in, for example, electrifying the maritime fleet.

Fierce competition in the biofuels marketplace

Nonetheless, competition for supply will be fierce, particularly from sectors like aviation and road transport, which have already established a foothold in the biofuels market.

A case in point is Singapore’s concurrent focus on sustainable aviation fuels (SAF) as it is a major airline hub, as much as it is one of the world’s biggest ports for shipping.

In May this year, the Finnish company Neste announced that its Singapore refinery expansion would double its total production capacity to 2.6 million tons annually of which up to one million tons can be sustainable aviation fuel (SAF).

The DNV whitepaper concludes that it is likely that biofuels will play an important role in shipping over the coming decades. However, limits to production capacity and competition from a range of other sectors mean that shipping cannot rely on biofuels as the only solution to reaching its decarbonization targets.

The maritime industry will, therefore, have to continue exploring other options to reach net zero.

Like it or not, biofuels are not a magic bullet and shipping needs to be multi-faceted in the ways in which it addresses decarbonization.

This means combining biofuels with more energy efficiency measures as well as developing the infrastructure for other carbon-neutral fuels.

Photo credit: DNV
Published: 5 July, 2023