Business

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.

Published

2 months ago

August 2, 2023

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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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Singapore retains titles as Best Global Seaport and Best Seaport in Asia

Port of Singapore has been named the “Best Global Seaport” for the third consecutive year and the “Best Seaport in Asia” for the 35th time at the 2023 AFLAS Awards.

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Singapore retains titles as Best Global Seaport and Best Seaport in Asia

The Maritime and Port Authority of Singapore on Friday (29 September) said the Port of Singapore has been named the “Best Global Seaport” for the third consecutive year and the “Best Seaport in Asia” for the 35th time at the 2023 Asian Freight, Logistics and Supply Chain (AFLAS) Awards.

These accolades recognise the contributions by the Port of Singapore serving as a key node in the global supply chain, and Singapore’s leadership in driving maritime decarbonisation and transformation.

The annual AFLAS Awards is organised by freight and logistics publication, Asia Cargo News, to honour leading service providers in the supply chain community for demonstrating leadership as well as consistency in service quality, innovation, customer relationship management and reliability. Winners were determined by votes cast by readers of the publication.

Mr Chee Hong Tat, Acting Minister for Transport and Senior Minister of State for Finance, said: “Singapore is honoured to be named the Best Global Seaport and Best Seaport in Asia. These awards are the result of the shared effort and strong collaboration between the Government, industry, unions and workers. We will continue to grow our port as an efficient, sustainable, and trusted node in global supply chains.”

Mr Teo Eng Dih, Chief Executive of MPA, said: “These awards are testament to the partnership and collaboration between Maritime and Port Authority of Singapore (MPA) with industry and international partners, the research and enterprise community, as well as unions. MPA remains committed to fostering an environment that encourages enterprise, innovation, and talent development.”

“We will continue to work with our partners to enhance Singapore’s connectivity, advance digitalisation efforts, and accelerate the decarbonisation of international shipping in line with the 2023 IMO strategy on reduction of GHG emissions from ships.”

Photo credit: Maritime and Port Authority of Singapore
Published: 29 September, 2023

Employment

Melvin Lum appointed as KPI OceanConnect Global Accounts Commercial Director in Singapore

Lum will take on the position of Commercial Director from Thomas Lee who was recently promoted to Head of APAC in a management restructure within KPI OceanConnect.

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September 29, 2023

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Melvin Lum appointed as KPI OceanConnect Global Account Commercial Director in Singapore

Global marine energy solutions provider KPI OceanConnect on Thursday (28 September) announced the appointment of Melvin Lum as Commercial Director for its Global Accounts team in Singapore.

Lum will take on the position of Commercial Director from Thomas Lee who was recently promoted to Head of APAC in a management restructure within KPI OceanConnect.

The Global Accounts team is an expert unit within KPI OceanConnect, specialised in providing long-term, tailored fuel strategy solutions to a portfolio of Key Accounts on a global scale. Dedicated regional teams located in London, Houston and Singapore work seamlessly across the world and around the clock to support their clients.

Lum joined KPI OceanConnect in 2021 as Senior Key Account manager and has made a significant contribution to the development of the team and optimisation of the daily operations of the unit in Singapore. Lum has vast experience across the supply chain and previously worked with TotalEnergies, Glencore and Global Energy Group prior to joining KPI OceanConnect.

Henrik Zederkof, Head of Global Accounts at KPI OceanConnect, said: "It is always a pleasure to witness the growth of our team members, and Melvin's progression is no exception. I have full confidence in Melvin's expertise, ability to lead the unit and dedication to his team. I look forward to seeing the progress of Melvin and his team, which will undoubtedly bring significant value to our numerous partners and the wider organisation.”

"Melvin will assume a pivotal role within the Global Accounts management team, leveraging his extensive experience in supply chain management and profound insight into emerging technologies. In his new role, Melvin will further enhance our team's skill set, aligning them with our ongoing objectives of supporting our partners in their green transition and digitalisation endeavours."

Melvin Lum, Commercial Director of KPI OceanConnect Global Accounts in Singapore, said: "I am very appreciative of the support and confidence from our management team as I take on this exciting new role. I am enthusiastic to work with the team as we continue to deliver an exceptional experience to our partners and stakeholders with dedication, innovation and passion."

Photo credit: KPI OceanConnect
Published: 29 September, 2023

Biofuel

TotalEnergies Marine Fuels renews ISCC EU certification for bio bunker fuel

Firm’s operations teams in Singapore and Geneva successfully renewed its ISCC EU sustainability certification for the supply of biofuel bunkers, says Louise Tricoire, Vice President.

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2 days ago

September 29, 2023

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TotalEnergies Marine Fuels renews ISCC EU certification for bio bunker fuel

Louise Tricoire, Vice President of TotalEnergies Marine Fuels recently said the firm’s operations teams in Singapore and Geneva successfully renewed its International Sustainability and Carbon Certification (ISCC) EU sustainability certification for the supply of biofuel bunkers.

“This means that TotalEnergies Marine Fuels can continue sourcing and supplying marine biofuels in accordance with EU renewable energy regulations ensuring the highest sustainability standards,” she said in a social media.

“It's the third year in a row that we have successfully renewed this certification, after a deep and comprehensive audit which showed zero non-conformity.”

She added marine biofuels have grown in demand among shipping companies that want to cut greenhouse gas emissions immediately.

“TotalEnergies Marine Fuels offers marine biofuels commercially in Singapore and we are starting in Europe. This certification enables us to accompany our customers in their decarbonisation journey with the best standard solutions available today.”

Photo credit: TotalEnergies Marine Fuels
Published: 29 September, 2023