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Argus Media: Fuel oil bunkering to linger despite new GHG rule

IMO revised greenhouse gas regulation for marine fuel will dent residual fuel oil demand, but the market could persist on demand from oil tanker and dry bulk vessel owners.

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The International Maritime Organisation (IMO)'s revised greenhouse gas (GHG) regulation for marine fuel will dent residual fuel oil demand, but the market could persist on demand from oil tanker and dry bulk vessel owners, and on production from decarbonised petroleum refineries.

1 August 2023

The IMO in July changed its marine fuel emissions directive from emissions from combustion (tank-to-wake) to lifecycle emissions (well-to-wake). Before that decision, ship owners were looking to mitigate emissions from fuel combustion only. Some were mulling installing sulphur oxide (SOx) and CO2-capturing scrubbers on board of their vessels, continuing to burn high-sulphur fuel oil (HSFO), and paying to dispose of the captured CO2. Following the IMO July ruling, ship owners also have to take into consideration well-to-tank emissions generated during refinery production and transportation of the fuel to a bunkering port.

IMO members agreed to reduce greenhouse gas emissions by at least 20pc, and preferably 30pc, by 2030; by at least 70pc, and preferably 80pc, by 2040; and to net zero by 2050, from 2008 base levels. If ship owners are able to dispose of their on-board captured CO2 and oil refiners can decarbonise their refineries at costs below the price of sustainable marine fuels, then residual fuel oil and marine gasoil (MGO) for bunkering demand could persist past 2040. Oil tanker and dry bulk carrier owners will likely be the two types of vessel owners to continue to burn fuel oil and MGO. They do not have the same customer and shareholder pressures to decarbonise compared with their counterparts from the container ship and cruise ship sectors.

Container shipping companies — including Maersk, Hapag-Lloyd, Ocean Network Express, CMA-CGM, Matson, and Evergreen — and cruise ship companies — including Royal Caribbean, Norwegian Cruise and Carnival — had pledged net zero emissions by 2050, even before the IMO rule change. These companies have been actively exploring the use of biofuels and are commissioning methanol-burning, methanol-ready and ammonia-ready vessels. Their investors and clients are likely to dismiss the idea of well-to-wake carbon-neutral fuel oil and MGO as a form of green washing and vote with their dollars to continue the course of sustainable fuels.

Container ships, bulk carriers and tankers were the biggest marine fuel consuming vessel categories. Internationally, containerships burned 61.7mn t residual fuel oil and MGO, while bulk carriers burned 57.9mn t and tankers burned 41.4mn t. Those volumes represent 31pc, 29pc and 21pc, respectively, of fuel oil and MGO demand, according to the latest IMO data, from 2021. Cruise ships burned 3.2mn t, or 2pc. IMO's marine fuel data collection system takes into account ships above 5,000 gross tonnes.

On a tank-to-wake basis, HSFO and very low-sulphur fuel oil (VLSFO) emit 3.114 grams of CO2 per gram of fuel (gCO2/g fuel) burned, according to IMO's guidelines on lifecycle greenhouse gas intensity of marine fuels. On a well-to-tank basis, HSFO emits 0.599 gCO2/g fuel and VLSFO emits 0.675 gCO2/g fuel, for total well-to-wake emissions of 3.713 and 3.789 gCO2/g fuel, respectively. MGO emits about 0.756 gCO2/g from well-to-tank and 3.206 gCO2/g from tank-to-wake for total of about 3.962 gCO2/g well-to-wake.

In July, carbon-free fuels such as B100 biodiesel, bio-methanol, green hydrogen and green ammonia were priced at 2, 4.4, 4.6 and 4.9 times the price of VLSFO in northwest Europe, Argus assessments showed.

By Stefka Wechsler

 

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

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Incident

Singapore: Bunker spill leads to checks on all fuel pipes at other Police Coast Guard bases

Police said fuel pipes at the other three bases at Loyang, Lim Chu Kang and Gul are also being checked with inspections expected to be wrapped up on 10 February.

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The recent oil leak incident at Police Coast Guard (PCG) Brani Regional Base has prompted checks on all fuel pipes at PCG’s three other bases for leaks, according to The Straits Times on Monday (10 February). 

Responding to queries from the local news provider, the police said all fuel pipes at Brani Regional Base were inspected on 6 February while fuel pipes at the other three bases at Loyang, Lim Chu Kang and Gul are also being checked with inspections expected to be wrapped up on 10 February. 

The police also said that a preliminary assessment on the cause of the leak might be due to micro cracks in a damaged fuel pipe as a result of repeated twisting of the pipe due to the movement of the pontoons caused by tidal changes.

On 6 February, Singapore authorities confirmed that a diesel oil leak was discovered at the Brani Regional Base on 5 February, at around 11.40am (Singapore Time). 

According to a joint statement by Singapore Police Force, Maritime and Port Authority (MPA) and National Environment Agency (NEA), about 23 metric tonnes had leaked from a damaged shore fuel hose used to refuel patrol craft at Selat Sengkir. 

The leak was eventually isolated at about 3.40pm and there were no oil slicks observed.

Related: Singapore confirms bunker spill from damaged shore fuel hose at Brani Regional Base

 

Photo credit: Manifold Times
Published: 11 February, 2025

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Biofuel

NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Firm said it has started a biofuel test run on Noshiro Maru, operated by Tohoku Electric Power, marking the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility firm.

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NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Japanese shipping firm NYK on Monday (10 February) said it has started a biofuel test run on its coal carrier Noshiro Maru, which is operated by Tohoku Electric Power on 9 February.

This is the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility company. Mitsubishi Corporation Energy in the Keihin area facilitated the supply of biofuel for the vessel.

Biofuels are made from organic resources (biomass) of biological origin, such as agricultural residues and waste cooking oil, and are considered to produce virtually zero carbon dioxide (CO₂) emissions when combusted.

“Since they can be used in heavy-oil-powered ship engines, which are common on large merchant ships, biofuels are considered a key means of reducing greenhouse gas (GHG) emissions in the transition period from heavy oil to zero-emission fuels,” NYK said. 

“Using biofuel to reduce GHG emissions during sea navigation also contributes to reducing Scope 3 GHG emissions generated by transporting customers’ cargo.”

NYK added it will continue to focus on introducing biofuels and other next-generation fuels, and will contribute to reducing GHG emissions in our customers' supply chains while promoting decarbonisation in marine transport.

 

Photo credit: NYK
Published: 11 February, 2025

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Biofuel

IBIA welcomes IMO move to draft guidance change on carriage of bio bunker fuels

IBIA welcomed agreement by IMO’s Sub Committee on PPR 12 to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships.

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The International Bunker Industry Association (IBIA) on Monday (10 February) said it submitted a document to IMO on the carriage of biofuels for supply to a ship for use as fuel oil on board that ship in November 2023.

This highlighted that as conventional bunker vessels were limited in carrying fuel oil of no more than 25% biofuel it presented a potential impediment to the global adoption of biofuels as fuel oil for ships and so to the ambition for the decarbonization of international shipping in the short term, as set out in the 2023 IMO GHG Strategy.

“IBIA therefore welcomes the agreement by IMO’s Sub Committee on Pollution Prevention and Response (PPR 12) to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships,” it said on its website. 

The guidance allows conventional bunker ships certified for carriage of oil fuels under MARPOL Annex I to transport blends of not more than 30% by volume of biofuel, as long as all residues or tank washings are discharged ashore, unless the oil discharge monitoring equipment (ODME) is approved for the biofuel blend(s) being shipped. 

“The Interim Guidance is expected to be approved by IMO’s Marine Environment Protection Committee (MEPC 83) in April,” IBIA added. 

“IBIA’s membership represents stakeholders from across the global marine fuel value chain, and being able to draw on this technically strong and credible resource will, in its role of having consultative status to the IMO, mean that IBIA will continue to bring important matters to the attention of the wider IMO membership for due consideration.”

 

Photo credit: International Bunker Industry Association
Published: 11 February, 2025

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