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2020: Each solution comes with its challenges, says Hapag-Lloyd

New fuel regulations will cost the shipping industry about $60 billion per year, it estimates.

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Maritime transportation firm Hapag-Lloyd recently wrote an article ‘How the new fuel regulations change the entire shipping industry’ describing the shipping industry’s challenges in meeting requirements for the approaching 2020 sulphur cap:

LSF2020 refers to the new “Low Sulphur Fuel” regulations, which will come into effect on 1 January 2020. These regulations are the biggest of a series of steps by the International Maritime Organisation (IMO) to reduce marine pollution (MARPOL) in response to the threat of climate change. The LSF2020 emission regulations mean ships will have to significantly reduce emissions on the high seas as well as in coastal areas. This change does not only concern Hapag-Lloyd but it challenges the entire shipping industry. The good news is however: Thanks to the regulations, the industry will become much greener.

Now, the question is how to comply with the new regulations and how much it will cost. Ship owners are effectively having to decide whether to switch to burning the more expensive low sulphur fuel, or place investment bets on Exhaust Gas Cleaning Systems (EGCS) or Liquefied Natural Gas (LNG) powered ships. There are however only limited facts and experience upon which to base these decisions, which will continue to have an impact on the profitability and competitiveness of liner shipping companies, long after the facts have become clear in hindsight.

Three main ways to go
The simplest way to comply with the new regulations is just to switch to using new, compliant 0.5 percent “Low Sulphur Fuel”. The problem: The lower the sulphur content, the higher the cost of bunker fuel. Oil industry experts estimate 0.5 percent Sulphur “Low Sulphur Fuel” will be 150 to 250 US Dollar more expensive per ton than the current 3.5 percent Sulphur “Heavy Fuel Oil”. According to estimation this will increase global average prices per TEU by around 80 to 120 US Dollar, or about 10 percent. All alternative approaches to enable ships to burn cheaper fuels, require considerable additional capital investment.

One option is to install an Exhaust Gas Cleaning System (EGCS), to remove the excess pollution from the exhaust gases – and continue to burn the cheaper 3.5 percent Sulphur “Heavy Fuel Oil”. EGCS are desulphurization systems that remove unwanted particles from industrial exhaust flows. The systems are installed inside the ship’s funnel and can work in a number of different ways. The two main kinds are “open-loop” and “closed-loop” (and “hybrid”, able to switch between open-loop and closed-loop operation). Operating in open-loop mode removes the pollution from the exhaust gases and then flushes it into the sea, instead of into the atmosphere. Operating in closed-loop mode retains the pollution in tanks on board the ship – but this is not practical for long distance journeys. The challenge: So far, these systems have not yet been used with large container ships, only with cruise liners and short sea ferries. There is also the risk that regulations will change in the coming years and will prohibit flushing the pollution into the sea at all.

Another alternative is to switch to Liquefied Natural Gas (LNG). Hapag-Lloyd currently owns 17 so called “LNG-ready” ships – these are ships with engines that can burn LNG as well as fuel oil. They just need an additional LNG fuel tank to be installed in a cargo bay, together with some additional piping and machinery. Then they are able to switch between LNG and fuel oil. The other approach is to build new ships, designed from the beginning to only burn LNG. The challenge: The capital costs to convert ships or to build them from new to burn LNG, are quite high. Moreover, since there is as yet little demand for marine LNG – a resource that is otherwise freely available onshore – there are as yet still only a small number of LNG bunker vessels available in a few ports.

Lastly, there are many limitations to how many ships can be converted to LNG or retrofitted with EGCS. It also takes time to build new ships fitted with scrubbers or designed to burn LNG. The vast majority of the global container fleet will therefore have no other choice than to switch to the new, much more expensive compliant 0.5 percent Sulphur “Low Sulphur Fuel” – or to break the law.

That shows: Each solution comes with its challenges. That is why right now there is no one right way to go. Liners have to individually decide the mix which seems best for them. However, low sulphur oil bunkering will have to start in the fourth quarter of 2019 due to the long round voyage times – which will mean higher costs for customers already by the end of next year. All in all, industry experts guess that the new fuel regulations will cost the shipping industry about 60 billion US Dollar per year.

Photo credit: Hapag-Lloyd
Published: 6 August, 2018

 

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Port & Regulatory

X-Press Feeders inks MoU with six European ports for green shipping corridors

Firm signed a MoU with Ports of Antwerp Bruges, Tallinn, Helsinki, HaminaKotka, Freeport of Riga and Klaipeda Port to develop infrastructure for provision and bunkering of alternative bunker fuels, among others.

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X-Press Feeders inks MoU with six European ports for green shipping corridors

Singapore-based global maritime container shipping company X-Press Feeders on Friday (5 April) signed of a memorandum of understanding (MoU) with six European ports: Port of Antwerp Bruges (Belgium), Port of Tallinn (Estonia), Port of Helsinki (Finland), Port of HaminaKotka (Finland), Freeport of Riga (Latvia) and Klaipeda Port (Lithuania).

This landmark agreement signifies a joint commitment to accelerate the establishment of green shipping corridors and the broader decarbonisation of the marine sector in Scandinavia and the Baltic Sea. Through this MOU, X-Press Feeders and the participating ports will pool resources and expertise to develop and implement sustainable practices for maritime operations.

Under the MOU:

  • Parties will work together to further develop infrastructure for the provision and bunkering of alternative fuels such as green methanol,
  • Encourage the development of supply chains for fuel that are zero or near to zero in terms of greenhouse gas emissions
  • Provide further training programs for port workers and seafarers with regards to the handling of alternative fuels
  • Leverage digital platforms to enhance port call optimisation
  • Parties will have regular meetings to update and discuss progress on actions for further developing green shipping corridors.

The MOU underscores the collective dedication to broader decarbonisation efforts within the maritime sector.

The collaboration between the parties will begin with the establishment of these two shipping routes:

  • Green Baltic X-PRESS (GBX): Rotterdam > Antwerp Bruges > Klaipeda > Riga > Rotterdam
  • Green Finland X-PRESS (GFX): Rotterdam > Antwerp Bruges > Helsinki > Tallinn > HaminaKotka > Rotterdam

These services are scheduled to commence in Q3 2024, marking a significant step towards more environmentally sustainable shipping services in Europe. This development is significant as these will be the very first scheduled feeder routes in Europe powered by green methanol, an alternative fuel that produces at least 60% less greenhouse gas emissions than conventional marine fuel.

X-Press Feeders’ green methanol is sourced from fuel supplier OCI Global. The green methanol is made from green hydrogen and the decomposition of organic matter, such as waste and residues. 

OCI’s green methanol is independently certified by the International Sustainability and Carbon Certification (ISCC) Association headquartered in Germany. The ISCC system promotes and verifies the sustainable production of biomass, circular and bio-based materials and renewables.

X-Press Feeders’ Chief Operating Officer, Francis Goh, said: “By working together – X-Press Feeders and the six partner ports – aim to efficiently implement green shipping corridors and lead the maritime industry in sustainability. We chose the Nordic and Baltic states as the first markets to deploy our green methanol powered vessels because we found the ports and our customers in these markets to be very receptive.”

“This MoU represents a significant milestone in our commitment to a sustainable future for the maritime industry. By collaborating with these leading European ports, we can collectively drive the adoption of green technologies that accelerate the decarbonisation of our industry.”

Vladas Motiejūnas, Harbor Master of the Port of Klaipėda, said: “In recent years, Klaipeda Port has taken significant strides towards sustainability. This year marks the commencement of construction for green hydrogen production and refuelling stations at the port, along with the implementation of shore-side power supply (OPS) stations for roll-on/roll-off ferries.”

“Furthermore, Klaipeda Port proudly enters 2024 with the Port Environmental Review System (PERS) certification, underscoring our commitment to environmental stewardship. Already, methanol bunkering operations are available at Klaipeda Port.”

“The integration of Klaipeda Port into environmentally sustainable shipping services by X-Press Feeders is a testament to our unwavering dedication to fostering a greener port.”

 

Photo credit: X-Press Feeders
Published: 8 April 2024

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LNG Bunkering

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

Bunker barge “FlexFueler001” delivered 110 mt of LNG bunker fuel to chemical tanker “Liselotte Esberger”, marking a milestone since it was the first time Titan delivered to a vessel of E&S Tankers.

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Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

LNG bunker fuel supplier Titan on Monday (19 February) said it executed a successful LNG bunkering operation for E&S Tankers, a joint venture of Essberger Tankers and Stolt Tankers as an operator of chemical tankers within Europe. 

The refuelling operation took place at the port of Antwerp on 15 January. 

“Our vessel, FlexFueler001, flawlessly delivered 110 mt of LNG to the Liselotte Esberger, marking a milestone since it is the first time we deliver to a vessel of E&S Tankers,” it said in a social media post. 

“This operation underscores our dedication to sustainable shipping practices and showcases our commitment to environmentally friendly solutions. We're proud to collaborate with E&S Tankers and look forward to furthering our shared mission.”

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

According to E&S Tankers website, the 7,135 dwt Liselotte Essberger arrived in Hamburg from a shipyard in China on 5 December 2023 and was christened the following day.  

The vessel is first of a total of four newbuildings ordered by the firm that are equipped with LNG dual-fuel engines.

Related: E&S Tankers launches second LNG dual fuel chemical tanker “John T. Essberger”

 

Photo credit: Titan and E&S Tankers
Published: 20 February, 2024

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Shipping Corridor

Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Creating green shipping corridors between South Korea, the United States and Japan’s top two busiest routes can reduce up to 41.3 million tCO2 each year, says Korean NPO Solutions for Our Climate.

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Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Korea-based non-profit organisation Solutions for Our Climate (SFOC) on Tuesday (13 February) said creating green shipping corridors between South Korea, the United States and Japan's top two busiest routes – Busan-Tokyo and Yokohama; Busan-Los Angeles and Long Beach– can reduce up to 41.3 million tCO2 each year. 

This is equivalent to annual emissions from over 9 million passenger vehicles in the United States.

“We evaluated the anticipated impact of several proposed KoreaUnited States-Japan green shipping corridors involving ports of Busan (KRPUS), Incheon (KRINC), and Gwangyang (KRKAN) —South Korea’s three major container ports,” SFOC said in the report. 

Each of the three South Korean ports will have the most significant environmental impact if connected to ports of Tokyo (JPTYO)/Yokohama (JPYOK) in Japan and ports of Los Angeles (USLAX)/Long Beach (USLGB) in the United States. 

“If container ships that travel KRPUS – JPTYO/ JPYOK and KRPUS – USLAX/USLGB are converted to zero emission ships, we can expect significant reduction in global carbon dioxide emissions, approximately 20.7 million tCO2 and 20.6 million tCO2, respectively,” it added. 

Accordingly, reducing GHG emissions in the global maritime shipping will require coordinated multilateral commitments and actions.

The green shipping corridor initiative is a global effort to align the shipping industry with the 1.5°C trajectory. It aims to:

  • Create maritime routes in which mainly zero-emission ships travel
  • Run ports with 100 percent renewable energy
  • Enforce mandatory use of on-shore power for docked vessels.

“With increasing global shipping emissions, green corridors are key to decarbonising the sector,” SFOC said. 

“Our latest report on green corridors comes on the heels of South Korea and the United States' announcement to work together to implement cross-country green shipping corridors between several of their key ports.”

 

Photo credit: Solutions for Our Climate
Published: 14 February, 2024

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