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Beyond 2020: Why methanol will take its place in the marine fuels mix

Chris Chatterton of the Methanol Institute explains to Manifold Times why bunker buyers should be looking at methanol post 2020.




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The following article below is written by Chris Chatterton, Chief Operating Officer, Methanol Institute:

It is a truism in shipping that investors and operators build assets for the long term but must take a short term view of the markets in which they will operate. Seen in this context, the 2020 fuel switch, while important and potentially painful, is the start of the conversation, not its end.

The shipping industry is rightly focussed on the short term impact of the 2020 global sulphur cap. The likely effects of this piece of regulation extend beyond its intended environmental goals to impact refining capacity, supply and demand - and thus the tanker markets – as well as having potential implications for vessel operations.

Despite being shrouded in the fog of often contradictory news reporting, opinion and analysis, we can comfortably assume that bunker prices will rise into 2020, whether for gasoil or low sulphur fuel oil. We can also see shortages and pinch points where supply and demand are out of step.

The operational/compliance/enforcement-related impacts are less clear but while IMO has pushed the agenda by banning the carriage of HSFO as fuel on vessels without a scrubber fitted, there may be problems for owners who adopted a wait-and-see approach.

In the past, owners have tended to go where the bunkers are low cost – even if that means some risk to quality – but given the supply position, it seems less likely that they will be able to source LSFO or gasoil without having long term agreements in place.

How long the squeeze persists is anyone’s guess – though the refiners will be looking to manage their risk as well as taking the opportunity to control supply of compliant fuel so as to shorten payback on their investments.

Even after supply/demand normalises, the post-2020 era will be one of higher fuel prices, changes that make alternatives more attractive to owners planning for newbuildings in the next few years.

From March 1 this year, all vessels trading globally must report their fuel consumption in line with the IMO’s Data Collection System, information which will be used to formulate its longer term plans to tackle climate change. From March 1 they must do the same for the IMO Data Collection System.

In January 2021, the North Sea and Baltic Sea Nitrogen Emission Control Areas will take effect, putting further pressure on permissible emissions of NOx from shipping in these areas.

By 2023, the IMO will have set out its carbon strategy, at which point the options for the industry are likely to become even tighter – pay a levy for continuing to use fossil fuels or adopt alternatives that offer a cleaner long term solution.

A sustained high price for LSFO or marine gasoil, especially when the cost of a carbon tax is added, might be a boost to LNG but could also make Methanol competitive as a marine fuel for newbuildings and conversions in specific shipping sectors.

Granted, we may not see early adoption of methanol on tramping bulkers or large tankers, but as the marine fuel market moves from a spot business to one defined more by long term supply with respect to some fuels with lower availability, it becomes more attractive.

Short sea shipping, ferries, inland waterways and workboats – all sectors that have flirted with LNG as a fuel – are all potential markets for methanol. The environmental argument is irrefutable: unlike LNG which only solves the SOx/NOx emissions problem, methanol offers a future pathway to a zero carbon emissions profile, so makes no contribution to global warming in addition to being compliant in terms of SOx and NOx.

Several existing plants are already producing low-carbon methanol through a carbon capture/re-injection production loop. Methanol production offers a wide range of feedstock and process technologies for ’future proof’, zero-carbon marine fuels. 

Biomass, like municipal solid waste and forestry residues can be gasified to produce methanol, while biomethane captured from landfill or wastewater treatment plants can be turned into methanol.  Renewable electricity from wind, solar, geothermal and hydropower plants along with waste CO2 and even atmospheric CO2 can be used as the building blocks for renewable methanol or “e-fuels” production.

As a low flashpoint fuel, Methanol is subject to the revision of Marpol Annex VI and should have full regulatory approval by 2023. Equipment manufacturers have responded, with engine maker MAN BW Diesel investing substantially in a dual fuel, main engine capable of burning a range of low sulphur fuels efficiently and safely, with an impressive emissions scorecard to date for seven vessels already running on Methanol (with four more on order). Chevron Marine Lubricants has developed a range of cylinder lubricant oils designed especially for dual fuel engines burning low sulphur fuels such as methanol.

To generate a like-for-like comparison of the costs of methanol versus LNG or LSFO, the industry still requires a better means of pricing than the current link to the IMPCA petrochemical benchmark.

To do this, the Methanol Institute has been working with Lloyd’s Register to develop a fuel comparison model, which will soon be officially launched as an online calculator available free of charge to the industry, enabling owners and operators to understand the comparative fuel costs associated with HFO, LSFO, and LNG, versus operating methanol-based propulsion.  

Using the calculator, potential users of methanol can examine the opportunity in detail, including by type and size of ship, by geographic region or trading area.

The 2020 deadline is focussing minds on the short term, but it is clear that the marine fuels market will not escape disruption in the longer term too.

Methanol may not be the fuel of the masses by 2020, but it could be the marine fuel of choice for a broad category of vessels through the remainder of the century and beyond – especially for those spending the majority of their time within ECAs.

Owners who are able to think beyond the next few years to the next phase of regulation should be considering what the marine fuel market will look like, and how alternatives such as methanol fit into that future.

Photo credit: Methanol Institute
Published: 23 March, 2018


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Kenoil Marine Services to conduct first-ever bunkering of bio-blended LSMGO in Singapore

“Kosmos Lily” is slated to supply bio-blended LSMGO, sourced from Alpha Biofuels, representing the first-ever bunkering of bio-blended LSMGO in Port of Singapore, says Jurong Port.





Kenoil Marine Services to conduct first-ever bunkering of bio-blended LSMGO in Singapore

Jurong Port on Wednesday (29 November) said Kenoil Marine Services Pte Ltd, a licensed bunker supplier, successfully loaded 200 metric tonnes of B24 bio-blended Low Sulphur Marine Gas Oil (LSMGO) in Singapore.

The B24 marine biofuel blend was onto Kenoil Marine’s bunker tanker Kosmos Lily.

Kosmos Lily is slated to supply this bio-blended LSMGO, sourced from Alpha Biofuels, representing the first-ever bunkering of bio-blended LSMGO in the Port of Singapore,” Jurong Port said in a social media post.

“Jurong Port takes pride in serving as the preferred port infrastructure for biofuel bunkering, and supporting the maritime industry's energy transition toward achieving net-zero emissions.”

Separately, Allan Lim Yee Chian, Founder and CEO at Alpha Biofuels, said the firm has been working to produce, blend and supply better quality biofuels for the maritime industry for over the last two years.

“We focused a lot on traceability of the biofuels , stability of the blended product and also the cost of the product,” he said in a social media post.

“The result is a bio-bunker fuel that balances the need for decarbonisation by the industry against the cost of sustainable biofuel.”

Photo credit: Jurong Port
Published: 30 November, 2023

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SeaTech Solutions and partners to develop India’s first electric tug E-VOLT 50

Other partners involved are India’s GRSE, Shift Clean Energy and ABS; GRSE will build an electric tug based on the E-VOLT 50 design by Singapore-based SeaTech Solutions.





SeaTech Solutions and partners to develop India’s first electric tug E-VOLT 50

Singapore-based marine engineering and vessel design specialist SeaTech Solutions International (S) Pte Ltd on Tuesday (28 November) on Tuesday (28 November) said it inked Memorandum of Understanding (MOU) with India’s Garden Reach Shipbuilders and Engineers (GRSE) Ltd, Shift Clean Energy and American Bureau of Shipping (ABS) on 22 November.

The collaboration aims to bring to fruition the country’s first Electric Tug E-VOLT 50, an initiative to decarbonise India’s tugboat industry by curbing carbon emissions, enhancing operational efficiency, and establishing new benchmarks for performance and environmental sustainability.

GRSE India will build an electric tug based on the E-VOLT 50 design by SeaTech Solutions International (S) Pte Ltd. 

Cmde PR Hari, IN (Retd), Chairman and Managing Director, GRSE, said: “We are excited to be part of this groundbreaking collaboration that combines the expertise of GRSE and three industry-leading organisations. 

“E-VOLT 50 is a bold step towards a cleaner and greener future for the maritime sector. By utilizing sustainable energy solutions and cutting-edge technology, we aim to redefine the standards of

performance, efficiency, and environmental stewardship.”

Prabjot Chopra, VP Technology at SeaTech Solutions, said, “We are delighted to work with GRSE, Shift Energy and ABS on this E-VOLT 50, India’s first Electric Tug, which will pave the way for India’s Green port operation.”

“As the collaborative efforts of GRSE, SeaTech Solutions, Shift Energy, and ABS take shape, the Electric Tugs E-VOLT 50 project stands as a testament to India's commitment to fostering a sustainable maritime industry that aligns with global environmental goals,” SeaTech Solutions added.

“This initiative reflects a pivotal moment in the evolution of green shipbuilding, marking a significant stride towards a cleaner, greener, and more efficient future for the maritime sector.”

Photo credit: SeaTech Solutions International
Published: 30 November, 2023

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Azane Fuel Solutions and Amogy sign ammonia bunker vessel agreement

MoU was signed to explore technical and commercial feasibility of using Amogy’s ammonia-to-power system on board an Azane developed bunker vessel concept.





Azane Fuel Solutions and Amogy sign ammonia bunker vessel agreement

Ammonia bunkering solution provider Azane Fuel Solutions and ammonia-to-power technology provider Amogy announced on Wednesday (29 November) they have signed a memorandum of agreement (MoU) to explore the technical and commercial feasibility of using Amogy’s ammonia-to-power system on board an Azane developed bunker vessel concept. 

The collaboration will also involve exploring the technical and commercial feasibility of using an Azane ammonia fuel feeder solution integrated into the Amogy power system.

Azane has developed an ammonia fuel bunker vessel concept with a complete ammonia cargo handling system. The company is now looking for solutions to enable carbon free propulsion of the ammonia bunker vessel. When fully developed, Azane plans to offer the ammonia bunker vessels to ports such as Hamburg, Rotterdam, Antwerp, Singapore or other key ports.

Amogy’s ammonia-to-power solution aims to decarbonize the hard-to-abate sectors, including shipping, power generation, and heavy-duty transportation. With Amogy’s solution, the new bunker vessel will be able to reach zero-emissions without compromising the operational and safety requirements.

Amogy and Azane will start exploring the compatibility of their respective technologies and the commercial potential of the combined solutions. The aim being to cooperate on a subsequent pilot project to mature the bunker vessel with the ammonia-to-power solution for commercial applications.

Christian W. Berg, Managing Director, Amogy Norway, said: “We are excited to announce the collaboration with Azane Fuel Solutions on their bunker vessel project. By using our technology, Azane Fuel Solutions can deliver clean ammonia to ships globally with zero emissions from the bunkering operation. This will be a first of its kind for this segment.”

Håkon Skjerstad, CEO of Azane Fuel Solutions, said: “The reason for providing an ammonia bunker vessel is to help decarbonize the shipping industry. Because of this, we need a zero-emission solution to provide propulsion to our vessels. Amogy has a promising technology that can help us reach our strategic ambition of offering zero-emission bunker solutions for deep sea shipping.”

Photo credit: Amogy
Published: 30 November, 2023

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