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Argus Media: Korea unveils roadmap for net zero in shipping by 2050

Third area of focus under the roadmap is for South Korea to develop eco-friendly technology and expand infrastructure for future bunker fuels, according to Tng Yong Li.

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South Korea's maritime ministry (Mof) has announced its strategy to decarbonise the shipping sector by 2050, with a focus on hastening the transition to what it terms as "eco-friendly" vessels.

The roadmap is a pre-emptive response to stricter decarbonisation regulations by the International Maritime Organization (IMO) and the international community, including Europe, Mof said on 14 February.

Mof expects the IMO in July to raise its international maritime carbon emission reduction target from 50pc to 100pc by 2050, in addition to more economic regulatory measures such as a carbon levy system. The 80th session of the Marine Environment Protection Committee will be held over 3-7 July, and is expected to adopt the revised IMO Strategy for Reduction of GHG Emissions from Ships, according to the IMO.

Mof sees "significant ripple effects" stemming from the tighter regulations on the shipping industry, since charging a certain amount for each tonne of carbon emitted will directly raise transportation costs for shipping firms. This will consequently make it "inevitable" for firms to switch to carbon-neutral fuels in order to stay competitive.

The Mof has consequently laid out its four-point strategy to achieve carbon neutrality in the shipping sector by 2050, in what it describes as a first in Asia.

Going green with support

The country will first convert ships owned by national shipping companies into ships that use eco-friendly fuels.

The roadmap has earmarked 867 outward-bound domestic vessels weighing 5,000 gross tonnes or more, which are subject to international regulations such as those set by the IMO, for conversion to eco-friendly ships. South Korea also aims to convert 118 eco-friendly ships by 2030, including the preferential conversion of 60pc of its liner service in Europe and the Americas, in response to the EU's regional regulations and introduction of its own carbon levy system.

South Korea aims to eventually replace all outward-bound domestic vessels with 100pc eco-friendly ships by 2050.

When building new ships, South Korea is planning to have dual-fuel engines that can utilise eco-friendly fuels such as e-methanol and LNG by 2030, and also aims to promote ammonia and hydrogen vessels.

These goals are in line with the previous "2030 Green Ship-K Promotion Strategy" that South Korea outlined in December 2020. The 2030 plan aimed to convert 15pc of South Korean-flagged ships, or 528 vessels out of 3,542, into greener ones. The government and public corporations are also required to build green vessels when replacing their old vessels.

Upon the successful implementation of the 2030 strategy, Mof forecasts that greenhouse gas (GHG) emissions in 2050 will be at 5.93mn t or half of the 11.81mn t in 2017. In the nearer term, Mof sees its strategy reducing particulate matter by 3,314t and GHG emissions by 4mn t by around 2030.

Secondly, the government will also provide support to encourage timely investment in the transition to eco-friendly fleets. The cost increase for domestic shipping lines is estimated at about 1.8 trillion South Korean won ($1.38bn) by 2030, as construction expenses rise because of the installation of expensive engines and fuel tanks for conversion to eco-friendly fuel ships. 

This is up by about 31pc compared to the cost of constructing conventional ships. Support from the government, public institutions, and the financial sector will be expanded so shipping firms "do not hesitate" to invest in building or converting eco-friendly ships, Mof said.

Public funds worth up to W4.5 trillion will be raised to provide loans through the financial sector, in addition to interest rate cuts for loans when building and operating eco-friendly ships. Measures to stimulate private ship investment will be prepared by the end of this year, such as issuing green bonds to support financing for shipbuilding.

A new fund worth up to W1 trillion will also be established to support eco-friendly vessel conversion in small- and medium-sized shipping companies.

Making way for future fuels

The third area of focus under the roadmap is for South Korea to develop eco-friendly technology and expand infrastructure for future fuels.

South Korea's trade and industry ministry (Motie) and Mof will jointly promote the development of technologies for eco-friendly vessels in a project over 2022-31, with an investment of W254bn. The two ministries will also study integrated biofuel technology over 2023-24 to secure future fuel production technologies for ships, and will also consider the expansion of floating carbon-free fuel infrastructure.

The country will also expand port facilities to prepare for fuels such as e-methanol, ammonia, and hydrogen. Legislation through the entire supply chain from production to storage to the sale and supply of bunker fuel will also be reviewed and improved.

Lastly, South Korea will establish carbon-free shipping routes and foster international co-operation. The country and the US launched a feasibility study in January to build a green shipping corridor between South Korea's Busan and the US, according to Mof. Domestic shipowner Hyundai Merchant Marine recently ordered nine methanol-fuelled vessels, with potential plans to use the aforementioned shipping corridor.

Public and private sector investment in eco-friendly shipbuilding is expected to hit W8 trillion by 2030 and W71 trillion by 2050, according to Mof.

South Korea expects this transition to be "a new national growth engine in the era of carbon neutrality", generating an economic value of W17 trillion by 2030, and W158 trillion by 2050.

By Tng Yong Li

 

Photo credit and source: Argus Media
Published: 23 February, 2023

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Alternative Fuels

SMW 2024: Yinson GreenTech partners with EPS on electric vessel trials

YGT’s marine electrification business, marinEV, and EPS will perform trials involving the first cargo delivery with an electric vessel and the first crew transfer with an electric vessel in Singapore.

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SMW 2024: Yinson GreenTech and EPS forge alliance on electric vessel trials

Yinson GreenTech (YGT), a leading green technology solutions provider, has signed a Letter of Intent (LOI) with Eastern Pacific Shipping (EPS), a global leader in maritime transportation, during Singapore Maritime Week 2024, both parties said in a joint statement on Thursday (18 April). 

This collaboration, spearheaded by YGT’s marine electrification business, marinEV, marks a significant step towards cleaner and more sustainable maritime operations in Singapore, with the following key milestones on the horizon:

Electric vessel deployments

  • First cargo delivery with an electric vessel in the Port of Singapore: marinEV and EPS aim to be at the forefront of maritime history by jointly facilitating the first cargo delivery using an electric vessel within the Port of Singapore. This aligns with both companies’ commitment to environmental responsibility and demonstrates their dedication to creating a net zero world.
  • First crew transfer with an electric vessel in Singapore: Recognising the critical role of crew transfers in maritime operations, marinEV and EPS will collaborate on the first crew transfer conducted by an electric vessel in Singapore. This trial will provide valuable data on the feasibility, efficiency, and safety of electric vessels for crew transportation, paving the way for wider industry adoption.

SMW 2024: Yinson GreenTech and EPS forge alliance on electric vessel trials

The Hydromover and Lake Herman

Building upon their commitment to sustainability, marinEV will enter into a collaborative agreement with EPS. This partnership aims to integrate electric vessels into last-mile delivery operations, significantly reducing Scope 3 emissions and contributing to a cleaner shipping industry. By jointly defining ambitious emission reduction goals, marinEV and EPS will work together to create a more sustainable future for maritime transportation.

“At Yinson GreenTech, we believe that collaboration is key to unlocking a cleaner future for our oceans. Our partnership with Eastern Pacific Shipping on these groundbreaking electric vessel deployments in Singapore signifies a major leap forward,” said Jan-Viggo Johansen, Managing Director of marinEV. 

“Together, we are not only making history but also paving the way for a future where clean and efficient transportation solutions become the norm. This is an exciting moment for us, and we are committed to working closely with EPS, our existing partners and other industry leaders to achieve a truly sustainable maritime landscape.

“It is heartening to see like-minded partners in the industry adopt the ‘act now’ approach like us, taking action and exploring innovative solutions on all fronts,” said Cyril Ducau, Chief Executive Officer of EPS.

“This collaboration with Yinson GreenTech not only offers a greener transportation alternative, it also builds on the industry’s collective commitment to accelerate the decarbonisation of shipping. We don’t do things because they are easy. We do it because they are difficult so that we leave no stones unturned in our efforts to decarbonise.”

Related: Yinson GreenTech all-electric crew transfer vessel to undergo sea trials in Singapore

 

Photo credit: Maritime and Port Authority of Singapore
Published: 19 April 2024

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Bunker Fuel

SMW 2024: Maritime International Advisory Panel discusses decarbonisation, green financing, digitalisation

Panel noted that financial institutions were willing to provide lending for suitable projects to support maritime decarbonisation with sufficient assurance that the default risks were managed.

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SMW 2024: Maritime International Advisory Panel discusses decarbonisation, green financing, digitalisation

The Maritime International Advisory Panel (IAP) held its third annual meeting on 16 April 2024, during the Singapore Maritime Week 2024. 

This year, the Maritime IAP held in-depth discussions on the key developments in the maritime sector, including decarbonisation, green financing, digitalisation and cybersecurity. 

Members of the panel who were present included Hiroaki Sakashita, President and CEO, ClassNK, Stephen Fewster, Managing Director, Global Head, Shipping Finance, ING Bank, Nick Brown, CEO, Lloyd’s Register, and Jonathan Wright, Global Managing Partner, Global Finance and Supply Chain Transformation Service Line Leader, IBM.

Established in 2022 by the Ministry of Transport (MOT) and the Maritime and Port Authority of Singapore (MPA), the Maritime IAP aims to seek international perspectives on key long-term trends and developments that will shape the maritime industry. 

It comprises global leaders from the maritime sector, adjacent industries and academia, and is chaired by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance. Local industry and union leaders also joined the meeting to share their perspectives.

IAP comprises global leaders from the maritime sector, adjacent industries and academia, and is chaired by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance.

IAP comprises global leaders from the maritime sector, adjacent industries and academia, and is chaired by Mr Chee Hong Tat, Minister for Transport and Second Minister for Finance.

Key Trends and Opportunities for the Maritime Sector

The Maritime IAP highlighted that despite geopolitical uncertainties and supply chain shifts, there were significant opportunities for the global maritime sector in the following areas:

  • Accelerating the green transition towards a low- and zero-carbon future, supported by important enablers such as financing for green shipping;
  • Deepening the utilisation of technology and digitalisation while strengthening cyber resilience; and
  • Training and re-skilling the maritime workforce to take on the new job opportunities of the future.

The Maritime IAP emphasised that Singapore plays an important role in facilitating global trade flows, supporting global maritime decarbonisation, and advancing maritime digitalisation and cyber-resilience. 

Singapore’s position as a trusted and established maritime eco-system could catalyse green financing solutions, unlock the benefits of deeper utilisation of technology and data, and position it as a training hub to develop the skills needed by the future maritime workforce.

Strengthening Maritime Ecosystem Amid Global Shifts and Green Transition

Against the backdrop of global uncertainties, the Maritime IAP highlighted that Singapore could be an important trade and maritime intermediary, given its status as a neutral, trusted, and leading maritime hub. With growing trade to emerging regions as trade flows shifted, the panel believed Singapore would be an important conduit for new trades going forward. The panel further suggested for Singapore to become a trusted maritime technology hub for the development, installation, and accreditation of critical technologies, especially for those fitted onboard ships.

The Maritime IAP noted that amidst the ongoing green transition, there would be competing demands for various low- or zero-carbon fuels (e.g. hydrogen, ammonia, methanol) from other sectors.

The Maritime IAP highlighted the need to draw on a wide range of green financing instruments and investments to catalyse change, address hurdles and accelerate the sector’s green transition. 

The panel also noted that financial institutions were willing to provide lending for suitable projects to support maritime decarbonisation with sufficient assurance that the default risks were managed. To address the financing needs of the sector, the panel suggested for maritime stakeholders to pool their needs, while demand aggregation would help smaller companies gain better access to suitable solutions and financing, and also allow financial institutions to better determine and manage the risks involved.

 

Photo credit: Maritime and Port Authority of Singapore
Published: 19 April 2024

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LNG Bunkering

GLBP submits permit applications to build and operate Galveston LNG bunker terminal

Small scale natural gas liquefaction facility will be the region’s first dedicated LNG bunker terminal to provide clean LNG as bunker fuel.

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Galveston LNG Bunker Port

Galveston LNG Bunker Port (GLBP) recently announced that it filed applications with the United States Army Corps of Engineers (USACE) seeking authorization to site, construct and operate the proposed GLBP small scale natural gas liquefaction facility on Shoal Point in Texas City, Texas, in the heart of the Galveston Bay/Greater Houston port complex. 

The GLBP project will be the region’s first dedicated LNG bunker terminal to provide clean LNG as marine fuel.

Galveston LNG Bunker Port has filed key regulatory applications with relevant government agencies, including the US Army Corps of Engineers (USACE) for the Clean Water Act and Rivers & Harbors Act, Texas Railroad Commission (TRRC) for the Texas Clean Water Act (CWA) Section 401 Water Quality Certification, and United States Coast Guard (USCG) for Waterway Suitability Assessment (WSA).

The USACE application for the proposed project includes two natural gas liquefaction trains capable of producing approximately 600,000 gallons per day of LNG; two 3-million-gallon full containment LNG storage tanks; natural gas liquids and refrigerant storage; feed gas pre-treatment facilities; a bunker vessel loading berth and associated marine and loading facilities.

“The Galveston LNG Bunker Port project continues to meet its milestones, and we are very excited to announce that the necessary permitting applications have been submitted,” said Shaun Davison, Chief Development Officer of Pilot LNG. 

“We are confident that we will meet the rigorous requirements of State & Local permitting authorities to ensure that the project is delivered on-time and will meet the ever-growing demand for clean fuel supply in the Galveston Bay, and US Gulf Coast region by the end of 2026.”

Pilot LNG and Seapath Group signed a project development agreement in September of 2023 that provides a framework for the development, technical design, permitting and marketing of the proposed liquefaction project, which is estimated to come online in late 2026. 

The global maritime industry is increasingly adopting LNG as a marine fuel to significantly reduce emissions and meet tightening regulations, including IMO 2020, which came into effect January 1st, 2020.

Joshua Lubarsky, President of Seapath Group, said: “Our experience in developing, building and operating energy infrastructure will help us with this much-needed facility.” Lubarsky continues “This facility is a critical investment into the resilience of the United States’ maritime infrastructure, and upon construction will immediately provide positive environmental and economic impacts in Texas City, Galveston Bay, and the US Gulf Coast.”

Ongoing development of the project is subject to a number of risks and uncertainties. The final investment decision to proceed with construction is contingent upon completing required commercial agreements, acquiring all necessary permits and approvals, and securing financing commitments.

Related: Galveston LNG Bunker Port secures site in Texas for proposed LNG bunkering facility
Related: Seapath, Pilot LNG launch JV to develop dedicated LNG bunkering facility in US Gulf Coast
Related: Houston: Pilot LNG announces regulatory filing for Galveston LNG Bunker Port
Related: Pilot LNG submits documentation to USCG for proposed LNG Bunker Port at Galveston

Related: Pilot LNG awards Galveston LNG Bunker Port FEED contract to Wison Offshore & Marine

 

Photo credit: Galveston LNG Bunker Port
Published: 19 April 2024

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