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Argus Media: ECA, ETS to drive up demand for biofuel bunkers in Mediterranean

Demand for biofuels for bunkering in Mediterranean could be driven up in 2025 due to the region becoming an ECA and vessels in EU territorial waters to pay for 70% of their CO2 emissions.

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Demand for biofuels for bunkering in the Mediterranean could be driven up in 2025 by the region becoming a sulphur oxide Emission Control Area (ECA) and vessels in EU territorial waters having to pay for 70pc of their CO2 emissions.

26 April 2023

The International Maritime Organisation (IMO) starting 1 May 2025 will require that vessels traveling in the EU Mediterranean territorial waters burn marine fuel with sulphur content capped at 0.1pc, down from 0.5pc sulphur. Starting on 1 January 2025, the EU will require that ship owners traveling EU territorial waters, including the Mediterranean, pay for 70pc of their CO2 marine fuel emissions through its emissions trading system (ETS), up from 40pc in 2024.

The Mediterranean becoming an ECA is expected to increase demand for 0.1pc sulphur marine gasoil (MGO) and reduce demand for 0.5pc sulphur residual fuel oil. The Mediterranean 0.1pc sulphur ECA will commence 10 years after northern Europe's.

On 1 January, 2015, the North Sea and the Baltic Sea ECAs, transitioned to 0.1pc sulphur marine fuels from 1.0pc sulphur fuel oil. As a result, in the port of Rotterdam, on the North Sea, the share of sales of 0.1pc sulphur MGO of total marine fuel sales rose to 16pc in 2015 from 6pc in 2014. The share of residual fuel oil of total bunker sales in Rotterdam dropped to 84pc in 2015 from 94pc in 2014.

But MGO emits nearly as much CO2 as residual fuel oil, and would not reduce ship owners' CO2 bill. Biofuels can be carbon neutral if made by sustainable biomass and are also compliant with the ECA sulphur limit. In 2025, marine shipping companies could shift to burning biofuels in the Mediterranean provided that biofuel prices do not exceed the cost of MGO combined with CO2 cost.

Argus assessed MGO at $849/t average in March in the west Mediterranean hub of Gibraltar-Algeciras-Ceuta. Argus assessed EU-traded CO2 at $96/t in March. Burning 1t of MGO emits about 3.2t of CO2. Thus, at the current snapshot of time, biofuel below $1,156/t would be considered competitively priced compared to MGO.

Companies currently offering or planning to offer biofuels for bunkering in the Mediterranean include: Cepsa, Peninsula and Repsol in Spain, Galp in Portugal and Alpha Trading, Eni and Fratelli Cosulich in Italy.

There are no statistics available for total EU Mediterranean waters marine fuel demand. The ;latest total EU bunker demand statistics — which include Mediterranean, North Sea, Baltic Sea, Black Sea and Atlantic Ocean EU waters — were at 40.3mn t for 2021. This number excludes smaller vessels of less than 5,000 gross tonnes and UK territorial waters.

By Stefka Wechsler

 

Photo credit and source: Argus Media
Published: 2 May, 2023

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LNG Bunkering

Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

Company says it is the first gas utility company in Japan to offer LNG bunker fuel at its terminal to vessels and is also exploring the potential of replacing LNG with e-methane as a marine fuel.

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Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

Osaka Gas on Monday (21 April) said it has launched its shore-to-ship LNG bunkering service, becoming the first gas utility company in Japan to offer liquefied natural gas (LNG) at its terminal to vessels.

The first delivery took place today at Osaka Gas’ Senboku LNG Terminal in Takaishi City, Osaka Prefecture, where LNG was supplied to Verde Heraldo, a bulker operated by Mitsui OSK Lines (MOL). 

Manifold Times previously reported that the bulker will sail under long-term transport contracts to supply raw materials for JFE Steel Corporation's mills. 

With the launch of the shore-to-ship service, in addition to its existing truck-to-ship LNG bunkering service—operational since 2019—Osaka Gas enhances its LNG fuel delivery capabilities to address the current scarcity of facilities in Japan that can supply LNG to vessels. 

The company’s future plans include the introduction of a ship-to-ship LNG bunkering service utilising a dedicated LNG bunkering vessel, scheduled to commence in fiscal 2026.

These supply methods aim to provide a stable and flexible LNG fuel supply to an increasing number of LNG-fuelled vessels as the maritime industry transitions away from heavy fuel oil.

This growth in LNG-fuelled vessels is driven by global decarbonisation trends and the International Maritime Organization’s target to achieve net zero greenhouse gas emissions by 2050. Through its LNG bunkering services, Osaka Gas is well-positioned to contribute to maritime industry sustainability.

Osaka Gas launches shore-to-ship LNG bunkering service at its terminal

In addition to expanding LNG fuel supply to vessels, Osaka Gas is exploring the potential of replacing LNG with e-methane as a marine fuel. 

Related: New MOL vessel to be supplied LNG bunker fuel in Japan before voyage to Australia

 

Photo credit: Osaka Gas
Published: 23 April, 2025

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Alternative Fuels

Japan: J-ENG begins co-firing of first full-scale marine engine with ammonia

Company says the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia.

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Japan: J-ENG begins co-firing of first full-scale marine engine with ammonia

Japan Engine Corporation (J-ENG) on Monday (21 April) said the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia, which will be installed in a vessel. 

J-ENG is developing the engine under the “Green Innovation Fund Project: Next-generation Ship Development” of the New Energy and Industrial Technology Development Organization (NEDO). 

Since May 2023, when J-ENG started the world's first ammonia co-firing operation of a large, low-speed, two-stroke engine in a test engine, J-ENG has obtained many results and knowledge, including stable operation at high ammonia co-firing rates and safe handling of ammonia, through various test operations over a period of about a year and a half. 

J-ENG will conduct verification operations on the full-scale engine and plans to ship the engine in October of this year. The engine will be installed on an Ammonia-fuelled Medium Gas Carrier (AFMGC) and then demonstration operations of the vessel will be carried out then.

In order to accommodate a wide variety of ammonia-fueled vessels, J-ENG is also concurrently developing an ammonia-fueled engine with a cylinder bore of 60cm, following the first engine with a 50cm cylinder bore mentioned above, for several promising follow-on projects.

Furthermore, after achieving the development and social implementation of these engines, the company has decided to construct a new plant with the support of a subsidy project by the Ministry of the Environment and the Ministry of Land, Infrastructure, Transport and Tourism through the GX Economic Transition Bonds. 

The new plant, which is scheduled for completion in 2028, will expand the production of ammonia fuel engines (in the product mix with fuel oil engines) and promote the spread and expansion of zero-emission ships.

“J-ENG, as a first mover of next-generation fuel engines, will contribute to the development of the Japanese shipping and shipbuilding industries through the early launch and expansion of these engines, and at the same time, contribute to the reduction of greenhouse gases (GHG) in international shipping and the achievement of carbon neutrality by 2050,” the company said on its website.

 

Photo credit: Japan Engine Corporation
Published: 23 April, 2025

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Methanol

Tsuneishi Shipbuilding completes first block loading of methanol-fuelled newbuildings

Company completed the first block loading of its first 5,900TEU methanol-fuelled containership and its first methanol dual-fuelled Kamsarmax bulk carrier in China and Philippines respectively.

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Tsuneishi Shipbuilding completes first block loading of methanol-fuelled newbuildings

Tsuneishi Shipbuilding on Tuesday (22 April) said its shipyard in China successfully completed the first block loading for its first 5,900TEU methanol-fuelled containership, which is the largest of this ship type built by the company, on 16 April.

In addition to the enhanced hull form and MT-FAST, the company’s innovative energy-saving technology, the integration of a large-capacity shaft generator has enabled this dual-fuel vessel to achieve both optimal loading performance and exceptional fuel economy when compared with fuel oil vessels in the same segment. 

MT-FAST is an energy-saving device that improves propulsion efficiency by approximately 4% by regulating water flow through the installation of multiple fins in front of the propeller. It was developed jointly with MTI of the NYK Group.

The vessel has been developed based on the concept of a final solution for the zero CO₂ emission vessel through the use of green methanol. Therefore, not only the main engine but also all on-board generators, HiMSEN engine which will be supplied by HD Hyundai, can be methanol-fuelled. 

This makes it possible to achieve carbon neutrality with the exception of a small amount of pilot fuel. Furthermore, the vessel is equipped with the necessary infrastructure to receive large-capacity alternative maritime power supplies. 

“In addition, the generators can be deactivated during anchorage, thereby achieving zero CO₂ emissions. We will continue to promote the further practical application of methanol-fuelled vessels with the aim of achieving carbon neutrality in the future,” the company said.

Tsuneishi Shipbuilding completes first block loading of methanol-fuelled newbuildings

Additionally, the Japan-based shipbuilder said its yard in the Philippines has successfully completed the first block loading for its first methanol dual-fuelled Kamsarmax bulk carrier on 21 April at THI Slipway No.2 . 

The vessel is scheduled to be launched in July 2025 and delivered in January 2026.

It is the first methanol-fuelled vessel in the Kamsarmax series, a long-standing series of vessels built by Tsuneishi Shipbuilding, which reached the 400-vessel milestone in July 2024.

By using methanol for propulsion, Tsuneishi Shipbuilding said the vessel reduces carbon dioxide emissions by 10%, nitrogen oxide emissions by 80% and sulphur oxide emissions by 99% during voyages compared to conventional models. 

 

Photo credit: Tsuneishi Shipbuilding
Published: 23 April, 2025

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