Ahead of Argus Asia B24 Forum, Manifold Times interviewed Mahua Chakravarty, Head of Marine Fuels Pricing (Asia) of independent global energy and commodity market intelligence provider Argus Media; she explains the growing prominence of B24 bunker fuel in the marine sector and believes it is imperative for the bunkering sector to deepen its knowledge on it:

MT: Why is it important for the bunkering sector to know more about the B24 bunker fuel market?

B24 has emerged as the first alternative marine fuel that allows ship-owners and charterers a drop-in fuel option, and make greenhouse gas (GHG) savings, for their voyages into EU and territorial waters.

It has proved to be the most practical solution for ship-owners that eliminates costly retrofitting charges. The easy availability of used cooking oil methyl ester (UCOME) as a blendstock from China and southeast Asia, also adds to its overall attractiveness as an alternative fuel.

B24 consumption in the port of Singapore recorded multi-fold jumps to touch 518,000t in 2023 as ship-owners fuelled for trials in preparation for the implementation of EU-led mandates like the EU Emissions Trading Scheme (ETS) and the Carbon Intensity Index (CII) rating. In 2024, B24 demand has continued to grow with 377,800t of consumption seen up to August, according to statistics from the Maritime and Port Authority of Singapore (MPA).

As we advance into 2025, the need to understand how B24 matures in terms of market fundamentals, pricing and dynamics will be a key indicator for the marine sector. Being the first generation of new marine fuels, B24 has shown the way that biofuel blends can provide a solution for ship-owners/charterers to meet compliance mandates set by the EU and IMO.

MT: Why has Argus developed its own B24 Singapore price index? What's so special about it and why should the industry adopt it as a benchmark?

Argus was the first to launch its spot B24 delivered on board (DOB) Singapore assessment in January 2023, thus introducing price discovery for this market at its point of inception. The past 1.5 years of daily price assessments of B24, using a robust market survey approach, has built Argus’ understanding of this market from the start.

We have seen the growth of liquidity and the quest among refiners, traders, ship-owners to find pricing solutions for a nascent market. We have been at the forefront of capturing spot liquidity growth and in assessing prices for this market.

This index is now considered a key price assessment by key refiners, traders, ship-owners and other stakeholders in the market.

MT: What takeaways can each segment of the bunkering sector such as bunker buyers, bunker traders, and shipowners receive from the upcoming Argus B24 forum?

The Argus B24 Asia Forum is aimed at showcasing some of these learnings by a global team that covers key markets like Singapore, China and Europe. Our global team will present their insights on the key trends driving demand for marine biodiesel globally.

As the marine sector marches onwards with the bunkering of higher biofuel blends, this forum will allow the audience to reflect on the key factors that have driven the marine biodiesel sector. It will provide insights to make better decisions about infrastructure, pricing, feedstock-related issues and what blends are likely to be prevalent in the coming year.

We will be hosting a panel discussion at this forum that will include key players driving the marine biodiesel space in Singapore and other regions.

The Argus Asia B24 Forum will be held in The Village Hotel (The Events Centre by Far East Hospitality), Sentosa, Singapore (Google Maps) on 8 October between 4.00pm to 7.00pm Singapore Time.

Participants are encouraged to register for the free event via the custom link here.

Related: Argus Media organises free admission ‘Argus Asia B24 Forum’ for bunkering sector

 

Photo credit: Argus Media
Published: 4 October 2024

Singapore-headquartered independent oil cargo and bunker trading company Nunchi Marine recently provided Manifold Times readers insight into what it takes to operate a marine fuels trading desk through an interview with Tomas Stacy, Manging Director of its Bunker Trading department:

MT: How did you get into bunker trading?

TS: Before diving into Singapore's bunker trading and physical supply industry, I was working in Shughart Technology in Scotts Valley, California. After returning to Singapore, a chance encounter with a head-hunter led me to join a local start-up in the bunker industry. This company quickly grew to become one of Singapore's largest physical suppliers, operating over 12 bunker tankers by 1990.

MT: You have been in the oil and gas industry for over 30 years. How has your extensive experience in this field influenced your approach to bunker trading?

TS: I have more than 30 years’ experience both as a physical supplier and as a trader.  I had the opportunity of working with both small and large trading houses and physical suppliers.  My experience has given me a holistic view of the entire oil and gas supply chain. This understanding enables me to anticipate market dynamics and make informed decisions. It’s also helped me build a robust network of contacts across the industry, which is invaluable in securing reliable supplies and managing market volatility.

MT: Bunker trading can be quite volatile. What strategies do you employ to manage the risks associated with this market?

TS: Petroleum products, much like any other commodity, can be unpredictable due to fluctuations in supply and demand. Sometimes, political events can shake things up even more. To navigate this, we use hedging as a key strategy in our trading approach. We also stay ahead of the curve by gathering market intelligence and news from trustworthy sources.

MT: The maritime industry is under increasing pressure to reduce its environmental impact. How is Nunchi Marine addressing sustainability in bunker trading?

TS: The environmental impact of ship pollution has sparked a long-standing debate among environmental groups worldwide. Europe has implemented Emission Control Areas (ECAs), and parts of Asia are following suit. Ships now need to use low and very low sulphur fuels for their engines and generators.

However, some larger and older vessels, particularly bulk carriers and container ships, still use high sulphur fuels with scrubbers. This isn't a long-term solution, as 3.5% sulphur in the fuel still leads to emissions.

As a responsible company, we are committed to pivoting towards greener fuels and look forward to a future where ocean-going vessels adopt biodiesel, methanol, and LNG fuels. Although these aren't entirely clean, they represent a step towards more sustainable shipping.

MT: What do you see as the biggest opportunities and challenges for the bunker trading industry in the next few years?

TS: Opportunities exist for physical suppliers if they're willing to upgrade their bunker fleet to IMO II tankers, which boast superior preventive measures for transporting hazardous materials. However, challenges remain, including the costly switch to green fuels like biofuels and methanol, which will inevitably raise shipping costs and affect businesses and consumers worldwide.

Another challenge is the growing preference among shipowners and international traders for collaborating with licensed suppliers. Unfortunately, some licensed holders do not operate their own bunker tankers, creating complexities in supply chain management and potentially limiting the flexibility and responsiveness of the service.

Some shipowners and buyers think they're buying fuel directly from licensed suppliers, but in reality, many of these suppliers use large or medium-sized trading companies for their logistics and paperwork. Some licensed suppliers rely heavily on these traders for their fuel stock and customer base. It's easier for suppliers to work with a few big traders rather than dealing with many individual shipowners, which can be complicated. This setup benefits local and international traders, like Nunchi Marine.

 

Photo credit: Manifold Times
Published: 1 October 2024

Singapore-based bunkering publication Manifold Times recently interviewed Mr. P.K. Mishra, Managing Director of Indian Register of Shipping (IRClass), on alternative bunker fuels including challenges they pose on classification societies and expertise IRClass offers to overcome them.

He also touched on the viability of nuclear for commercial maritime:

MT:  Can you describe the new challenges IMO2030/2050 bring for classification societies, specifically in approving the new breed of vessels using alternative bunker fuels?

The IMO climate goals bring several challenges for classification societies, particularly in approving vessels using alternative fuels. One of the main challenges is ensuring the safety, reliability, and environmental compliance of these fuels, such as hydrogen, ammonia and methanol. Each alternative fuel has unique properties and hazards, requiring updated safety protocols, risk assessments, and design standards.

Classification societies are working towards developing new rules and guidelines for the construction, operation, and maintenance of vessels utilising such alternate fuels.

Another challenge is ensuring global uniformity and consistency in safety standards while addressing regional regulatory differences, which requires extensive collaboration with stakeholders, including shipowners, shipyards, equipment manufacturers, and regulatory bodies.

Sustainability is another aspect – though taken up at IMO level, the classification society has to provide the correct input/understanding to the ship owners and ship operators with regards to its compliance/usage on board and also about the benefits on CII and other incentives as will be decided at IMO.

MT: What are the expertise and solutions IRCLASS offers to overcome these challenges, and how do they differ from the competition?

Indian Register of Shipping brings a wealth of expertise in addressing the challenges posed by the new fuel ecosystem. Our approach is characterized by a deep understanding of both traditional and emerging technologies, while addressing specific needs.

We provide comprehensive services that include risk assessment, feasibility studies, and technical guidance for the integration of alternative fuels into vessel design and operations. Our unique differentiation lies in our commitment to innovation and our proactive approach to developing guidelines and rules for new technologies. IRS invests extensively in research and development to stay ahead of industry trends and regulatory requirements.

Additionally, our global presence combined with local expertise allows us to offer customized support, ensuring compliance with both international and regional regulations. This dual advantage of global reach and local presence, along with our strong industry partnerships, sets us apart from our competitors.

MT: In your opinion, which alternative bunker fuel offers the best solution for shipowners in meeting future IMO2030/2050 and FuelEU/EU ETS requirements? What are its pros and cons?

There isn't a one-size-fits-all answer when it comes to the best alternative fuel for meeting decarbonisation goals. However, each fuel option has its own advantages and disadvantages:

• LNG (Liquefied Natural Gas) is currently the most mature and widely available alternative fuel, with an existing bunkering infrastructure. It offers a significant reduction in CO2 emissions and virtually eliminates sulphur oxides (SOx) and particulate matter.
  However, LNG still emits methane (a potent greenhouse gas) during extraction and transport, which poses environmental concerns. It is also a fossil fuel, which may limit its long-term viability under future decarbonization goals and therefore may be considered as a transitionary fuel.
• Hydrogen has the potential for zero-emission shipping when produced from renewable sources. It is versatile and can be used in fuel cells or internal combustion engines.
  The storage and handling of hydrogen pose significant challenges due to its low energy density and high flammability. The production of green hydrogen is also currently energy-intensive and costly.
• Ammonia does not emit CO2 when burned, making it a promising zero-carbon fuel. It is easier to store and transport than hydrogen and has a well-established production and distribution network. Ammonia is however toxic and poses serious safety risks if not handled properly. The combustion process needs to be optimized to minimize nitrous oxide emissions.
• Methanol is easy to handle, biodegradable, and has a lower carbon footprint compared to conventional fuels. It can be produced from renewable sources like biomass and captured CO2. Methanol has a lower energy density than traditional fuels, which could affect ship range. It also still emits CO2, although at a reduced rate.

At this point in time when no green fuel is under production at scale and available, it is difficult to guess which future fuels will survive, or which of ammonia, hydrogen, methanol, LNG, LPG or additives-rich biofuels might dominate. Rather than one fuel, the industry will select different fuels for different types of ship, and it is important not to eliminate any of the current options too early as an industry.

MT: Taking into consideration future environmental regulations, what variables should a bunker tanker owner/operator, based in different regions around the world, take into consideration when choosing newbuilding criteria?

When choosing newbuilding criteria, bunker tanker owners/operators should consider several key variables in light of future environmental regulations:

Fuel Type and Flexibility: The choice of primary and secondary fuels is critical. Owners/operators should consider fuels that are compliant with current and anticipated future regulations, including IMO2030/2050 and regional requirements like the EU's FuelEU and ETS. Flexibility to switch between fuels could provide a competitive advantage.

Design and Technology: The vessel's design should incorporate energy-efficient technologies, such as hull optimization, advanced propulsion systems, and waste heat recovery systems. Hybrid or dual-fuel engines may provide flexibility and compliance advantages.

Operational Region: Regional regulations and fuel availability will play a significant role. Understanding the environmental regulations of the operating regions and the availability of compliant fuels and bunkering infrastructure is essential.

Lifecycle Costs: Consider the total cost of ownership, including capital expenditure (CapEx) and operating expenditure (OpEx). Investments in more sustainable technologies may have higher upfront costs but could result in lower operational costs over time due to fuel efficiency and reduced emissions penalties.

Safety and Compliance: Ensuring the vessel meets all international and regional safety and environmental regulations is paramount. This includes having the necessary certifications and adopting best practices for environmental performance.

MT: Taking into consideration future environmental regulations, what variables should a shipowner operating in different maritime sectors take into consideration when choosing newbuilding criteria?

Different maritime sectors (e.g., bulk carriers, container ships, tankers) have unique operational profiles, which impact fuel consumption and emissions. Shipowners should select designs and technologies that best align with their specific operational needs and regulatory requirements.

Fuel Type and Future-Proofing: Selecting the right fuel is critical, considering not only current but also anticipated future regulations. Ships that can operate on multiple fuel types may have a competitive advantage, providing flexibility as fuel availability and prices change.

Energy Efficiency Measures: Implementing energy-efficient technologies, such as advanced hull designs, air lubrication systems, and energy recovery devices, will help reduce fuel consumption and emissions, contributing to compliance with future regulations.

Technology and Innovation: Incorporating advanced digital tools for fuel optimization, emissions monitoring, and predictive maintenance can enhance operational efficiency and regulatory compliance.

Environmental Impact: Consideration of the vessel's overall environmental footprint, including emissions, noise pollution, and waste management, is increasingly important. Compliance with stricter environmental standards may require additional investment in technologies that reduce emissions and improve sustainability.

Cost Impact: The costing and future availability of fuel depending upon the vessel’s operating profile plays a major role in selecting a new building project.

MT: Would nuclear power ever be considered a viable solution to power commercial maritime trade? What are its technological challenges to become a mainstream energy source for powering sea-going vessels, and how could they be resolved?

Nuclear power has the potential to be a viable solution for powering commercial maritime trade due to its high energy density, zero emissions during operation, and ability to provide continuous power over long durations without refuelling.

However, there are several technological, regulatory, and societal challenges that need to be addressed for nuclear power to become a mainstream energy source for sea-going vessels. Resolving these challenges would require significant advancements in nuclear technology, robust international collaboration on safety and regulatory frameworks, and addressing public and political concerns about the use of nuclear power in commercial shipping.

The challenges also involve economic viability compared to conventional ships, infrastructure deficit such as for port infrastructure required for nuclear ships.

 

Photo credit: Indian Register of Shipping
Published: 23 September, 2024