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Argus: ARA B100-MGO bunker fuel average weekly spread flips to discount

Spread of marine biodiesel with 100pc advanced FAME in ARA on a dob basis to conventional MGO flipped to a $70.28/t discount in the week to 15 September for the first time since January.

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The spread of marine biodiesel with 100pc advanced fatty acid methyl ester (FAME) in ARA on a dob basis to conventional marine gasoil (MGO) flipped to a $70.28/t discount in the week to 15 September for the first time since January. This factors in the value of Dutch renewable fuel units (HBEs) that can be claimed for the blending of advanced biofuels.

18 September 2023 

Conventional MGO prices have firmed in ARA, averaging $964/t in the week to 15 September, the strongest weekly level since November 2022. MGO levels firmed on the back of tightening gasoil supply in northwest Europe, resulting in distillate blendstocks getting redirected towards road-fuel diesel grades commanding a greater premium and away from MGO supply. Market participants also noted tighter availability of conventional MGO in recent trading sessions in line with tighter supply of blending components.

B100 levels, which incorporate a discount based on the double counting of advanced HBEs, slipped on lacklustre demand for the product, according to market participants, who had previously mentioned that the price of B100 weighed on bunker fuel demand compared with conventional bunker fuels and B30 marine biodiesel blends. This may now change if B100 continues to price at a discount to MGO.

Further, the EU emissions trading scheme (ETS) is scheduled to commence next year, which may provide an additional incentive for shipowners to switch to B100. Argus estimates that a B100 blend comprising 100pc advanced fame will not be subject to ETS costs, as ETS emissions will be calculated on a tank to wake basis.

Shipowners running vessels with scrubbers may still opt to burn high-sulphur fuel oil (HSFO) and pay for the CO2 costs, according to market participants. B100 commanded a premium of $36.29/t against dob HSFO when CO2 costs are factored on the week to 15 September, according to Argus calculations. But B100 also flipped to a discount of $2/t to dob HSFO with CO2 costs on 15 September for the first time since April. Further, HSFO availability has been tight in northwest Europe in recent sessions, resulting in dob HSFO levels firming to $603/t on 15 September — the highest since June 2022. Shipowners with vessels that are not fitted with scrubbers are unable to utilise HSFO or even VLSFO in Emission Control Areas (ECA), but are able to burn B100.

Photo credit and source: Argus Media
Published: 20 September, 2023

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MHI and NGK to develop membrane dehydration systems for low cost e-methanol production

Both will develop a membrane dehydration system to lower the cost of e-methanol production and to optimise efficiency of manufacturing processes for e-methanol, a next-generation clean bunker fuel.

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Mitsubishi Heavy Industries, Ltd. (MHI) and NGK INSULATORS, LTD. (NGK) on Wednesday (22 May) said they will jointly develop a membrane dehydration system to lower the cost of e-methanol production and to optimise efficiency of manufacturing processes for e-methanol, a next-generation clean marine fuel, to meet expected demand growth for clean fuels and raw materials.

e-Methanol is gaining attention as a next-generation clean fuel, primarily for marine fuel, and is expected to grow as a market globally.

Apart from developing a membrane dehydration system for e-methanol production, both parties will also build such a system for bioethanol production - a raw material for Sustainable Aviation Fuel (SAF).

The system will replace the dehydration process in the production of e-Methanol, which utilises hydrogen and CO2 as raw materials. By using a membrane separation system instead, the companies expect to significantly reduce energy consumption used in the manufacture of e-Methanol, which is capturing attention as a next-generation clean fuel.

To this project, MHI will contribute its significant global expertise delivering methanol plants and other chemical plants, in addition to its technologies for handling methanol and various other chemicals. 

NGK will contribute its deep knowledge of sub-nano ceramic membrane technology and unique film deposition technology developed in the fields of chemical processes and water purification. Notably, NGK has developed the world's largest ceramic membranes, which are known for their exceptional separation accuracy and durability. 

In the context of forecasted demand growth for both Bioethanol and e-Methanol as clean, raw materials and fuels, MHI and NGK will jointly drive forward the development of these systems achieve real-word deployment and establishment of a stable supply system.

 

Photo credit: Venti Views on Unsplash
Published: 24 May 2024

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LR: Safety and supply crucial for widespread adoption of ammonia bunker fuel

New Lloyd’s Register report highlights that the safe use of ammonia and its surrounding regulatory framework remains a critical factor for its adoption as a marine fuel.

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LR: Safety and supply crucial for widespread adoption of ammonia bunker fuel

A new Lloyd’s Register report published on Thursday (21 March) has highlighted the need for industry-wide understanding of the operational and safety challenges surrounding the use of ammonia as a bunker fuel, for its adoption as part of the maritime energy transition.

Fuel for thought: Ammonia report found that although technology for ammonia as a marine fuel is developing rapidly, gaps in the regulatory framework around its use need to be addressed, alongside resolving the challenges for the production and supply of zero or near-zero emissions ammonia.

The report has identified that by taking steps to develop a framework today, the industry can avoid delays and build on the strong technology case for ammonia adoption. 

For the safe handling and infrastructure, the maritime industry can draw on the extensive experience of transporting ammonia as a cargo throughout the 20th and 21st centuries. There are, however, still concerns around ammonia’s toxicity, crew awareness and training and its overall impact on aquatic, human and environmental health.

The study also found that among the factors to consider for ammonia adoption, social acceptance and scalability are key.

The pricing of renewable electricity, green hydrogen and carbon capture will all impact ammonia’s affordability as a marine fuel. Clean ammonia producers, who are looking to upgrade production to create blue and green ammonia, see potential in increased demand from agriculture and other sectors, as well as shipping, all putting pressure on supply.

Liam Blackmore, Principal Specialist – Decarbonisation at Lloyd’s Register, said: “Fuel for thought: Ammonia, underlines the importance of addressing regulatory gaps, technology application and production hurdles in order to ensure the seamless integration of ammonia into the marine fuel landscape as part of the maritime energy transition.”

“By proactively developing a robust framework today, it is possible to accelerate the adoption of this, whilst mitigating potential risks and hazards. LR is committed to supporting first movers in ammonia and other alternative fuels, drawing upon our extensive experience and expertise in maritime safety and regulation to help deliver innovative solutions that prioritise safety and reliability.”

LR’s is supporting ammonia pioneers in delivering designs and processes that are safe and reliable. In addition to being a founding member of the Castor Initiative, a joint development project for two deep-sea ammonia propelled tankers, LR will class Exmar’s ammonia-fuelled gas carriers currently under design development by Hyundai Mipo Dockyard.

LR has also issued approval in principle for ammonia-fuelled engine designs and technologies and has completed a risk assessment with Yara Marine Technologies and Pilbara Port Authority for ammonia supply and bunkering.

Note: The full ‘Fuel for thought: Ammonia’ report can be found here.

 

Photo credit: Lloyd’s Register
Published: 22 March 2024

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Molgas Group enters German market with first multi-truck-to-ship LNG bunkering op

Car carrier “Auto Achieve” received 100 mt of LNG bunker fuel, supplied by multiple trucks from the Molgas Group at the Port of Cuxhaven in Germany on 17 March.

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Molgas Group enters German market with first multi-truck-to-ship LNG bunkering op

Molgas Group on Wednesday (20 March) announced its entry into the German LNG bunkering market with an inaugural operation conducted in partnership with UECC, a provider of sustainable short sea RoRo transportation in Europe.

During the operation, car carrier Auto Achieve received 100 metric tonnes (mt) of LNG, supplied by multiple trucks from the Molgas Group at the Port of Cuxhaven in Germany on 17 March. 

Johannes Richter, Group Leader Marine at Molgas Group, said: “Germany is of importance for the energy transition in marine, and we are pleased to begin our operations here.’

“We are actively working on expanding our multi-truck-to-ship presence across multiple ports in the North and Baltic Sea to offer flexible supply solutions to the market in combination with our Scandinavian operations of two LNG Bunker Barges, Multi-Truck and Terminal supply.”

Daniel Gent, Energy & Sustainability Manager at UECC, said: “We are very happy to further expand our LNG bunkering network. Supporting the expansion of LNG bunkering infrastructure in Europe is a key ambition of ours and we are delighted to partner with MOLGAS in delivering the first LNG to a car carrier in the port of Cuxhaven.”

 

Photo credit: Molgas Group
Published: 21 March 2024

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