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BIMCO CII Clause for Time Charters – The dust begins to settle

Three lawyers explain on BIMCO CII Clause for Time Charters, the obligations, highlight themes emerging from the industry’s reaction to the clause, and impact on the industry so far.

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The following is an article written by three Reed Smith shipping lawyers explaining the International shipping association (BIMCO) CII Clause for Time Charters, the obligations, highlights themes emerging from the industry’s reaction to the clause, and the impact on the industry so far:

By Reed Smith transportation lawyers Nick Austin, Mike Adamson and Laura Hyne 

Just as there is no easy route to decarbonisation, there is no straightforward way of balancing a shipowner’s obligation to comply with the MARPOL Carbon Intensity Indicator (“CII”) Regulations with a time charterer’s right to direct the employment of a vessel.

That much is clear from the long-awaited BIMCO CII Operations Clause for Time Charters 2022 and, more tellingly, from the industry reaction.

Now that the dust is settling: what does the clause actually say? What are the key sticking points? And how are owners and charterers positioning themselves before the CII Regulations come into force on 1 January 2023? In this briefing, we take a closer look at some of the emerging themes.

The BIMCO CII Operations Clause for Time Charter Parties 2022

Messaging from both BIMCO and the IMO has long been that, for the CII Regulations to be effective, owners and charterers will need to work together. This principle of co-operation is at the heart of the clause.

Under sub-clause (b), the parties are obliged to ‘cooperate and work together in good faith’ to: (i) share best practices that may improve the vessel’s energy efficiency and; (ii) collect, share and report on a daily basis any relevant data that may assist the monitoring and assessment of the vessel’s compliance with the CII Regulations and for planning prospective voyages. This, at least, should not be a point of contention because the very essence of the CII Regulations require this.

Charterers’ obligations

The key point is that the clause transfers the responsibility for compliance with the CII Regulations from the owner to the charterer.

Sub-clause (c) sets out the two main obligations on the charterer:

  1.   To operate and employ the vessel in a manner consistent with the CII Regulations.
  2.   To operate and employ the vessel in a manner which will not permit the “C/P Attained CII” (i.e. the vessel’s CII attained at the start of the year or the delivery date if this was in the middle of a year) to exceed the “Agreed CII” (i.e. the CII value which the parties agree in the clause will be met).

The Agreed CII must be stated in sub-clause (d) and this will be a key area of negotiation. Without agreement, the clause defaults to the middle point of ‘C’. For many vessels, this could curb the freedoms traditionally enjoyed by time charterers because they may have to issue adjusted voyage orders (to slow steam or sail by a more fuel efficient route) to comply.

Sub-clause c(ii) says “Any existing warranties as to despatch, speed and consumption or to maintain the Vessel’s description” continue to apply. A charterer will therefore retain the right to claim against the owner for breach of those warranties. However, a charterer must still comply with its other obligations under the clause, even if the owner is in breach of the warranties.  In other words, a charterer is not excused from its obligations if, for example, the vessel underperforms.

Owners’ obligations

The main obligation for the owner is at sub-clause (f). It must exercise due diligence to ensure that the vessel is operated in a manner, which minimises fuel consumption, including the following:

  1.   Maintaining the vessel, its engines, hull and any equipment relating to its energy efficiency in accordance with the charter and to report any deficiencies.
  2.   Adjusting the vessel’s trim and optimising main and auxiliary engine use.
  3.   Making optimal use of navigational equipment and performance monitoring systems.
  4.   Proceeding on the most fuel efficient route (subject to the safety of the vessel and charterers’ instructions).
  5.   Monitoring data relevant to calculating the vessel’s carbon intensity.
  6.   Compliance with the Ship Energy Efficiency Management Plan (SEEMP).

What about non-compliance?

Sub-clause (g) says what happens if the data collected by the owner indicates that the trajectory of the C/P Attained CII is deviating from the Agreed CII.

In short, if, after the owner has given advance warning of such deviation to the charterer, there is a “reasonable likelihood” that the charterer will not be able to comply with its obligations under sub-clause (c), the charterer must submit, at the owner’s request, a plan showing its instructions for at least the next voyage.

Then, if the owner can reasonably show that following this plan will result in the vessel failing to meet the Agreed CII, it must notify the charterer, and the parties must work together in good faith to agree an adjusted plan to bring the C/P Attained CII in line with the Agreed CII.  

Until an adjusted plan is agreed, the owner need not follow the charterer’s orders and can require the charterer to provide alternative instructions to bring the vessel back within the C/P Attained CII.

The vessel is to remain on hire following the owner’s request for a written plan until such plan is agreed and, during that time, the owner will not be in breach of charter if it takes the above steps to bring the vessel within the C/P Attained CII. In theory this could lead to a stalemate if a plan cannot be agreed. However, given the vessel will be off hire, the charterer should be incentivised to agree a compromise as quickly as possible.

There is also an express right at sub-clause (j) for the owner to claim damages caused by any failure by the charterer to comply with the clause.

Observations

A number of themes are starting to emerge from the industry’s reaction to the clause.

The nature of the key obligations

Under the clause, the charterer’s obligation to operate and employ the vessel in a manner consistent with the CII Regulations is an absolute obligation. But the owner’s obligation to operate the vessel in a manner which minimises fuel consumption is one of due diligence only.

This imbalance has raised eyebrows with a few charterers, with some trying to limit their own obligations to the lower standard of diligence.

But how would an obligation to exercise due diligence be measured in the context of the clause? If there is a range of steps open to a charterer to comply, a due diligence obligation should allow it to consider these, choose what it reasonably thinks is best, and avoid liability if it does not work. However, if the only way to achieve compliance is, say, to slow steam, a due diligence obligation would not allow the charterer to avoid that course, even if it came with the risk of liability to third parties under sub-charters, bills of lading or sale contracts.

Changing the absolute obligation to exercising “reasonable commercial endeavours” could be more attractive to a charterer. Whether an owner would agree is another matter.

Incentivising charterers to agree to the clause or assume responsibility for CII compliance

Reports have emerged of charterers in strong negotiating positions resisting an un-amended BIMCO clause on the basis that it uses more stick than carrot to ensure compliance by (a) putting the responsibility to comply on the charterer and (b) giving the owner the right to reduce speed or demand alternate instructions. This is a significant departure from the usual division of rights and responsibilities in time charters and could result in the charterer incurring liabilities to third parties.

Faced with push-back, an owner may want to incentivise charterers to agree the clause or operate vessels in a manner which leads to a more favourable CII rating, for example by sharing in port authority incentives which are expected to be offered to vessels with a CII rating of A or B.

Alternatively, an owner could offer to take other steps not mentioned in the clause, but within its control, to improve a vessel’s energy efficiency. This could include more regular hull and propeller cleaning, upgrading a vessel’s hull coating or installing new energy efficient equipment. A charterer could similarly require an owner to take these steps in return for agreeing to a CII clause under which they take on responsibility for compliance.

In practice, it may not be possible for an owner to avoid taking proactive (and expensive) steps to improve a vessel’s rating if it is so inefficient that it would be not be possible for any charterer to operate it commercially, whilst also ensuring compliance with CII.

Back-to-back charters

Disponent owners often aim to charter out on back-to-back terms with their head charter. However, given that CII clauses are likely to be heavily negotiated with the final wording specific to each charter, we expect to see different clauses in the same chain of charters. Disponent owners should therefore pay particular attention to any exposure gaps and seek to limit them if a fully back-to-back position is not possible.

Nor is the BIMCO clause intended for use in voyage charters. While a BIMCO voyage charter CII clause is anticipated, for the time being parties to a voyage charter will need to agree provisions reflecting the position under any time charter as far as possible. For example, if a party time charters in and voyage charters out and the time charter includes the BIMCO clause, it should aim to agree a right in the voyage charter to sail by an indirect route or slow steam. Alternatively, it could look to include specific terms, e.g. in relation to routing and speed, to ensure the performance of a voyage charter does not put the disponent owner in breach of its time charter up the line.

Claims for breach of CII clauses

The repercussion for non-compliance with CII is that a vessel rated ‘D’ for three consecutive years, or ‘E’ for a single year, must provide a corrective action plan to be signed-off by the vessel’s flag state or class, failing which a vessel could be banned from trading.

Any losses of this type could in principle be recovered under the BIMCO clause. But if an owner suffers other losses in relation to CII, there may be questions about whether those losses were caused by the breach and recoverable in law. For example, what if an owner does not benefit from a future incentive for compliance provided by a port state or suffers an (as yet unknown) penalty imposed by port state or other authority for non-compliance? And what if an owner’s ability to fix the vessel for future voyages, or its market rate of hire, following redelivery is adversely affected? There is fertile ground here for disputes about the cause and recoverability of such losses.

Short term vs long term charters

The BIMCO clause seems best suited for longer term time charters. In short term or trip time charters, where the employment of the vessel is known, specific terms setting out routing, speed and other operational factors affecting energy efficiency may be more appropriate than adopting the BIMCO clause.

Concluding thoughts

The release of the BIMCO clause has had an immediate impact on the industry as owners and charterers grapple with what it means for their operations and wider business models. An owner can now say there is an “industry standard” position, but whether the clause and the delicate balancing act attempted by BIMCO will be widely accepted and actually become “industry standard” remains to be seen. And that’s before the anticipated “update” to the CII Regulations in 2026, intended to reflect the industry’s experience of the Regulations in the first three years, is even on the horizon.

But the initial reaction indicates the clause may be used as a starting point, even if it is amended. And in many cases the final wording will depend on bargaining positions.

The higher level clauses that appeared before the BIMCO clause – which often provided for parties to work together in good faith to ensure compliance or negotiate changes to charter clauses – may now be a thing of a past. It may well also be more difficult for charterers to argue that their largely unfettered right to employ the vessel should not be impeded or that they should not be the ones taking steps to reduce a vessel’s carbon intensity.

It is abundantly clear that the CII Regulations will have a direct impact on the day-to-day operation of vessels across the global fleet. Parties will need to be flexible to achieve compliance even before any update in 2026. The BIMCO clause provides a framework where none existed before, and we expect the market’s approach to CII compliance will mature and evolve as owners and charterers alike come to terms with the reality of the CII Regulations.

 

Photo credit: CHUTTERSNAP from Unsplash
Published: 21 December, 2022

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Analysis

JLC China Bunker Market Monthly Report (March 2024)

China’s bonded bunker fuel sales grew in March, as the shipping industry recovered gradually and sellers actively boosted sales on the back of ample supply and high inventories.

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JLC Bonded bunker fuel sales in Zhoushan (Mar 2024)

Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for March 2024 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales surge in March

China’s bonded bunker fuel sales grew in March, as the shipping industry recovered gradually and sellers actively boosted sales on the back of ample supply and high inventories. Domestic LSFO prices were lower than those in Singapore and other neighboring ports, incentivizing shipowners or operators to refuel their vessels in China, with bunkering volume in Shanghai and Zhoushan rising considerably.

The country sold about 1.82 million mt of bonded bunker fuel in the month, with the daily sales up 13.59% month on month to 58,658 mt, JLC’s data shows.

Sales by Chimbusco, Sinopec (Zhoushan) and China ChangJiang Bunker (Sinopec) came in at 540,000 mt, 630,000 mt and 30,000 mt in March, while those by suppliers with regional bunkering licenses settled at 558,400 mt. At the same time, SinoBunker sold about 60,000 mt of bonded bunker fuel, the data indicates.

China’s bonded bunker fuel exports rise in first two months

China’s bonded bunker fuel exports rose in the first two months of this year, underpinned by fresh quotas and larger production.

The country exported a combination of 3.02 million mt of bonded bunker fuel in January-February, growing by 3.13% from the same months in 2023, JLC estimated, with reference to data from the General Administration of Customs of the PRC (GACC).

Heavy bunker fuel exports totaled about 2.85 million mt in the two months, accounting for 94.13% of the total, while light bunker fuel exports were 177,500 mt, accounting for 5.87%.

The increase in the exports mainly came as China released this year’s first batch of quotas on LSFO exports at the end of 2023. Though refiners’ LSFO production margins were relatively poor, they ramped up their production amid new quotas, which buoyed the exports. China’s LSFO output totaled 2.57 million mt in January-February, with the daily output gaining 2.69% year on year to 42,850 mt, JLC’s data shows.

In January alone, China’s bonded bunker fuel exports settled at 1.78 million mt, jumping by 11.93% month on month and 34.71% year on year.

However, the exports plunged to 1.25 million mt in February, down by 29.99% month on month and 22.75% year on year. Bunkering business at Chinese ports was halted during the Chinese New Year holiday, and customs’ clearing procedure for export was also affected by the holiday. In addition, the operation of many ports was hit hard by heavy snow and freezing rains, adding to the downward pressure on the exports.

 

JLC China bunker exports by region 2023 2024

 

JLC China major blending producers' bunker supply (Mar 2024)

Domestic-trade bunker fuel demand rises in March

Domestic-trade heavy bunker fuel demand recovered mildly in March, as the shipping industry rebounded after the Chinese New Year holiday. However, the demand growth was still limited as some shipowners still suspended services and the market was dominated by wait-and-see sentiment amid high prices.

Domestic-trade heavy bunker fuel demand was estimated at 430,000 mt in the month, a gain of 70,000 mt or 19.44% from a month earlier, JLC’s data shows.

Meanwhile, domestic-trade light bunker fuel demand was estimated at about 140,000 mt, a gain of 20,000 mt or 16.67% from a month earlier, the data indicates.

Bunker Fuel Supply

China’s bonded bunker fuel imports soar in Jan-Feb

China’s bonded bunker fuel imports soared in January-February 2024, due to a low base a year earlier.

The country recorded 581,900 mt of bonded bunker fuel imports in the two months, a surge of 27.36% year on year, with 359,200 mt in January and 222,700 mt in February, JLC estimated, with reference to data from the GACC.

China’s bonded bunker fuel imports dived to a record low in January-February 2023, as bunkering demand had not fully recovered from the epidemic, also because of high freight rates and ample domestic supply. The imports totaled only 456,900 mt in the first two months of 2023, tumbling by 48.01% year on year.

On the other hand, Chinese refiners boosted LSFO production in January-February 2024, limiting the import growth. These refiners produced about 2.57 million mt of LSFO in the two months, with the daily output climbing by 2.69% year on year to 42,850 mt, JLC’s data shows.

Russia became the largest bonded bunker fuel supplier in the first two months of this year, exporting 276,800 mt to China, accounting for 47.57% of the latter’s total imports. Malaysia ranked second with 186,800 mt, accounting for 32.10%, followed by South Korea with 95,800 mt, accounting for 16.46%. Japan climbed to the fourth place with 21,500 mt, occupying 3.69%, while Singapore slipped to the fifth place with only 1,000 mt, making up 0.17%.

In China’s bonded bunker fuel market, only HSFO and MGO are still mainly imported, while LSFO is rarely imported as its import efficiency is relatively low amid steep freight rates.

JLC Bonded bunker fuel imports by source Jan Feb 2024

Domestic-trade bunker fuel supply increases in March

Domestic-trade heavy bunker fuel supply improved in March, as availability of some blendstocks (such as low-sulfur residual oil and shale oil) increased.

Chinese blenders supplied about 460,000 mt of domestic-trade heavy bunker fuel in the month, a rise of 60,000 mt or 15% from February, JLC’s data shows.

Similarly, domestic-trade MGO supply rose to 160,000 mt in March, up 30,000 mt or 23.08% month on month, the data shows. Refineries’ enthusiasm for MGO production improved in March, as domestic MGO prices moved up along with domestic oil products.

JLC Arrival of imported fuel oil cargoes

 

JLC China main oil blending feedstock prices

JLC China domestic trading 180 cSt bunker fuel price 2023 2024

JLC China bunker blending profit by region 2023 2024

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JLC Network Technology Co., Ltd is recognized as the leading information provider in China. We specialized in providing the transparent, high-value, authoritative market intelligence and professional analysis in commodity market. Our expertise covers oil, gas, coal, chemical, plastic, rubber, fertilizer and metal industry, etc.

JLC China Bunker Fuel Market Monthly Report is published by JLC Network Technology Co., Ltd every month on China bunker market, demand, supply, margin, freight index, forecast and so on. The report provides full-scale & concise insight into China bunker oil market.

All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior authorization from JLC.

Related: JLC China Bunker Fuel Market Monthly Report (February 2024)
RelatedJLC China Bunker Market Monthly Report (January 2024)

Note: China-based commodity market information provider JLC Technology has been providing Singapore bunkering publication Manifold Times China bunker volume data since 2020. Data from earlier periods are available here.

 

Photo credit: JLC Network Technology
Published: 11 April 2024

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Fuel Testing

VPS publishes 2023 annual review of its findings on bunker fuels

Findings in VPS’ review include 58% of its 2023 Bunker Alerts were for VLSFO fuels, followed by 24% for MGO fuels and 14% for HSFO; most common problematic parameter was Flash Point.

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Marine fuels testing company VPS on Tuesday (16 January) published an article titled ‘2023 Marine Bunker Fuels Review’ by Steve Bee, VPS Group Commercial Director, giving insightful annual review of VPS findings on both global and regional maritime fuel matters, focusing on marine fuels. 

Introduction

2023 saw the continuing evolution and the widening of available maritime fuel types and grades, as the global shipping industry gathered decarbonisation momentum to reduce its emissions and achieve current and future legislation targets. Existing CII and EEXI requirements, the incoming EU ETS legislation, plus the slightly longer-term IMO legislation, saw increasing demand for additional testing, lower-carbon fuels, data and digitalisation solutions across the shipping sectors.

As the leading maritime decarbonisation testing and advisory services provider, VPS continued to be at the forefront of marine fuels and lubricants analysis, utilising our experience, expertise and innovative approach, to support this drive for a more sustainable shipping fleet.  

Throughout the year, VPS witnessed further fuel quality issues with VLSFOs in terms of cold-flow property issues, sulphur compliance and cat-fines. HSFO and VLSFO suffered numerous degrees of chemical contamination, whilst MGO suffered from cold-flow, flash point and FAME off-specifications.

Biofuels usage certainly gathered momentum and the increased demand from the market led to increasing queries regarding their fuel management and their “fit-for-purpose” as a drop-in marine fuel, which in turn called upon VPS to provide answers and solutions to customers, utilising our extensive knowledge and understanding of biofuels and their associated test parameters. 

The Marine Fuel Mix

Across 2023, the fuel mix with respect to samples received for testing in VPS laboratories, equated to 62.7 million MT, which is over 5 million MT of marine fuels per month. VLSFO was the most popular marine fuel with 54.3% of the fuels used, followed by 29.5% HSFO (a growth of 15.4% over 2022), 14.2% MGO, 1.2% ULSFO and 0.8% Biofuels. Regarding biofuels usage, the samples tested by VPS equated to an increase from 231,000 MT in 2022 to 558,000 MT in 2023.

VPS 2023 MARINE BUNKER FUELS REVIEW

VPS Bunker Alerts

Bunker Alerts highlight short term fuel quality issues identified by VPS, for a specific test parameter of a specific fuel grade/type in a specific port. The service provides valuable information to customers, to assist in avoiding potentially problematic fuel types in a highlighted port or region, to further protect the customer’s asset and crew.

In 2023 VPS issued 28 Bunker Alerts, eight fewer than in 2022. The 2023 Bunker Alerts included all major fuel grades, i.e. VLSFO, HSFO, MGO and ULSFO, ten different test parameters, 12 ports and 9 countries.

58% of the 2023 Bunker Alerts were for VLSFO fuels, followed by 24% for MGO fuels and 14% for HSFO. The most common problematic parameter was Flash Point, accounting for 28% of the Bunker Alerts, followed by Sodium at 24%, with Sulphur and TSP at 10% each.

Singapore (32%) and ARA (21%) were the regions/ports most frequently requiring a Bunker Alert to be issued. But as these are the two busiest bunkering regions, it is not too surprising.

Screenshot 2024 01 29 104316 0

Screenshot 2024 01 29 104316 1

VLSFO Fuel Quality

As the most used marine fuel type, VLSFO accounts for more than half of the fuels tested by VPS. In terms of quality, Europe provided the highest level of off-specification VLSFOs in both 2023 (7.8%) and 2022 (7.9%). Africa provided the next highest level of off-specification fuels with 6.7% in 2023 and 7.0% in 2022, with North America third with 4.4% of fuels tested exhibiting at least one off-specification parameter in 2023 and 4.3% in 2022.

Screenshot 2024 01 29 104316 2

Screenshot 2024 01 29 104316 3

Sulphur is the most common off-specification parameter of VLSFOs, accounting for 26.6% of VLSFO off-specs in 2023 and 31.5% in 2022. 0.7% of VLSFOs tested in 2023 had a sulphur level of 0.50%-0.53%, with 0.5% of samples tested having a sulphur level greater than 0.53%.

Pour Point was also a common off-specification parameter for VLSFOs with 13.6% of VLSFOs off-specs relating to this parameter in 2023 an increase over the 11.4% level witnessed in 2022. 

The importance of the additional cold-flow test of Wax Appearance Temperature (WAT) and Wax Disappearance Temperature (WDT), was highlighted in 2023 with 63% of VLSFOs exhibiting WAT of 31-40ºC and 14% having WAT between 41-50ºC. 55.7% of VLSFO samples had a WDT of 41-50ºC, with 28.1% having a WDT of >50ºC. VLSFOs cold-flow properties are a definite concern with wax precipitating from the fuel at temperatures way in excess of 10ºC above the pour point, potentially causing numerous operational problems such as filter and pipework blockages.

Sulphur is the most common off-specification parameter of VLSFOs, accounting for 26.6% of VLSFO off-specs in 2023 and 31.5% in 2022. 0.7% of VLSFOs tested in 2023 had a sulphur level of 0.50%-0.53%, with 0.5% of samples tested having a sulphur level greater than 0.53%.

Pour Point was also a common off-specification parameter for VLSFOs with 13.6% of VLSFOs off-specs relating to this parameter in 2023 an increase over the 11.4% level witnessed in 2022. 

The importance of the additional cold-flow test of Wax Appearance Temperature (WAT) and Wax Disappearance Temperature (WDT), was highlighted in 2023 with 63% of VLSFOs exhibiting WAT of 31-40ºC and 14% having WAT between 41-50ºC. 55.7% of VLSFO samples had a WDT of 41-50ºC, with 28.1% having a WDT of >50ºC. VLSFOs cold-flow properties are a definite concern with wax precipitating from the fuel at temperatures way in excess of 10ºC above the pour point, potentially causing numerous operational problems such as filter and pipework blockages.

2023 also saw a significant increase in cat-fine levels in VLSFOs, with 12.7% of all off-specifications relating to this parameter, compared to 8.5% in 2022. 16.2% of all VLSFOs showed a cat-fine level greater than 40ppm. Frequent checking of purifier efficiency via VPS’ Fuel System Checks (FSC) service is a highly recommended proactive safeguard in respect to increased cat-fines within VLSFOs.

VLSFO viscosities vary enormously depending upon to blend components used. In 2023 VLSFO viscosities ranged from <20Cst to >380Cst. 16% of all VLSFO off-specifications were due to viscosity. Only 0.5% of VLSFOs had a viscosity of >380Cst. 68% of all VLSFO viscosities were less than 180Cst. Viscosity is such a key operational parameter, determining the transfer and injection temperatures of fuel onboard ships and therefore determining the exact viscosity of VLSFOs is crucial to ensure optimal efficiency.

Biofuels

As global shipping looks towards low-to-zero carbon fuels to answer many emissions reduction challenges, biofuels offer an immediate “drop-in” solution. As such VPS tested the equivalent of over 500,000 MT of biofuels in 2023 compared to ca. 230,000 MT in 2022.

Europe, (mainly ARA-region) provided the highest volume of biofuels at almost 400K MT (ca. 74%) and Singapore second (ca. 21%), providing just over 100K MT.

The most common biofuel blend was B30 (10-30% bio), which accounted for 34.3% of biofuel samples tested by VPS. Yet, B100 (>90% bio) was not far behind with 30.1%.

The majority of biofuels contained Fatty Acid Methyl Esters (FAME) as the bio-component, although VPS did test others containing HVO, HEFA, Cashew Nut Shell Liquid (CNSL) and Tyre Pyrolysis Oil (TPO).

Where FAME is the bio-component within marine biofuels, the key considerations are:

  • Energy Content, Renewable Content
  • Fuel Stability, Cold-Flow Properties
  • Corrosivity, Microbial Growth

Of the biofuels tested by VPS in 2023, 9% of those tested for oxidation stability gave the concerning result of <5 hours, highlighting a high degree of instability, whilst 6.7% gave a result of 5-8 hours which is still a cause for concern.

In terms of corrosivity, 11.9% of those biofuels tested provided an amber/caution result, whilst 8.5% of those tested provide a red warning, indicating potential high levels of corrosivity.

It is fully expected that the growth in biofuels usage for marine applications will continue to increase across 2024 and the VPS Additional Protection Service (APS) when using biofuels, will only increase in importance as the industry looks for more information regarding the fuel management of biofuels.

Summary

2023 once again highlighted the importance of bunker fuel quality testing, as a proactive means to protect vessels, their crew and the environment. With additional tests, currently not included within ISO8217, providing further  vital information in achieving heightened levels of protection.

Whilst we can expect a new revision of ISO8217 in early 2024, additional tests will still hold an important role in fuel management.

Biofuels usage will continue to increase in demand and importance, as ship owners and operators look to achieve improvements through CII and EEXI, as well as looking to counter the financial impact of the EU ETS scheme.

Methanol demand and usage will also grow, following the recent success of Maersk’s Laura Maersk and the rapidly growing order book for methanol-powered vessels.

So 2024, suggests another year of widening marine fuel types and grades coming to market, coupled with their growing fuel management considerations.

Note: The full article titled ‘2023 Marine Bunker Fuels Review’ with related graphs and charts can be found here

Related: World’s first methanol-fuelled boxship christened and named “Laura Maersk”

 

Photo credit: VPS
Published: 30 January, 2024

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Business

Exclusive: Estimated marine fuel sales figures of Singapore top 10 bunker suppliers by volume in 2023

Top three gainers for 2023 were Sinopec Fuel Oil (+16), Pegasus Maritime (+12), and both Kenoil Marime Services (+6) and Central Star Marine Supplies (+6).

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The Maritime and Port Authority of Singapore (MPA) on Friday (12 January) updated its list of top bunker suppliers by volume in 2023.

A survey conducted by Singapore marine fuels publication Manifold Times with selected industry sources revealed the estimated annual bunker sales volume for the republic’s top 10 Singapore bunker suppliers in 2023:

ESTIMATED ANNUAL FIGURES OF TOP 10 BUNKER SUPPLIERS BY VOLUME (YEAR 2023)
Position BUNKER SUPPLIERS Volume in 2023
1 EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD 5.0 million mt
2 TFG MARINE PTE LTD 4.8 million mt
3 SINOPEC FUEL OIL (SINGAPORE) PTE. LTD. 4.7 million mt
4 PETROCHINA INTERNATIONAL (S) PTE LTD 4.6 million mt
5 VITOL BUNKERS (S) PTE. LTD. Not available
6 CHEVRON SINGAPORE PTE LTD Not available
7 BP SINGAPORE PTE. LIMITED 2.94 million mt
8 GLOBAL ENERGY TRADING PTE LTD 2.44 million mt
9 SHELL EASTERN TRADING (PTE) LTD Not available
10 ENG HUA COMPANY (PTE) LTD 2.2 million mt

The top three gainers for 2023 were Sinopec Fuel Oil (Singapore) Pte. Ltd (+16) which entered the Singapore market in 2022, Pegasus Maritime (S) Pte Ltd (+12), and both Kenoil Marime Services Pte Ltd (+6) and Central Star Marine Supplies Pte Ltd (+6).

Fratelli Cosulich Bunkers (S) Pte Ltd dropped by ten places from 26th in 2022 to 36th position in 2023.

A total of 41 bunker suppliers was registered in this year’s list (compared to 42 in 2022) due to the departure of Toyota Tsusho Petroleum Pte Ltd in Q4 2023.

A list of all bunker suppliers ranked by volume in 2023 (versus position in 2022) and their movement are as follows (best viewed on desktop):

LIST OF ALL BUNKER SUPPLIERS BY VOLUME (YEAR 2023)
Position in 2023 BUNKER SUPPLIERS Position in 2022 Movement
1 EQUATORIAL MARINE FUEL MANAGEMENT SERVICES PTE LTD 1 0
2 TFG MARINE PTE LTD 3 +1
3 SINOPEC FUEL OIL (SINGAPORE) PTE. LTD. 19 +16
4 PETROCHINA INTERNATIONAL (S) PTE LTD 2 -2
5 VITOL BUNKERS (S) PTE. LTD. 4 -1
6 CHEVRON SINGAPORE PTE LTD 8 +2
7 BP SINGAPORE PTE. LIMITED 6 -1
8 GLOBAL ENERGY TRADING PTE LTD 7 -1
9 SHELL EASTERN TRADING (PTE) LTD 5 -4
10 ENG HUA COMPANY (PTE) LTD 11 +1
11 GLENCORE SINGAPORE PTE.LTD. 13 +2
12 MINERVA BUNKERING PTE LTD 9 -3
13 MAERSK OIL TRADING SINGAPORE PTE LTD 12 -1
14 EXXONMOBIL ASIA PACIFIC PTE LTD 14 0
15 SENTEK MARINE & TRADING PTE LTD 10 -5
16 MARUBENI INT'L PETROLEUM (S) PTE LTD 17 +1
17 GOLDEN ISLAND DIESEL OIL TRADING PTE LTD 16 -1
18 SINGAMAS PETROLEUM TRADING PTE LTD 23 +5
19 BUNKER HOUSE PETROLEUM PTE LTD 24 +5
20 CATHAY MARINE FUEL OIL TRADING PTE LTD 21 -1
21 HONG LAM FUELS PTE LTD 15 -6
22 SK ENERGY INTERNATIONAL PTE LTD 20 -2
23 CONSORT BUNKERS PTE LTD 18 -5
24 TOTALENERGIES MARINE FUELS PTE LTD 22 -2
25 KENOIL MARINE SERVICES PTE LTD 31 +6
26 PEGASUS MARITIME (S) PTE LTD 38 +12
27 PALMSTONE TANKERS & TRADING PTE LTD 28 +1
28 GLOBAL MARINE TRANSPORTATION PTE LTD 27 -1
29 TRITON BUNKERING SERVICES PTE LTD 34 -5
30 SIRIUS MARINE PTE LTD 30 0
31 CENTRAL STAR MARINE SUPPLIES PTE LTD 37 +6
32 GRANDEUR TRADING & SERVICES PTE LTD 25 -7
33 CNC PETROLEUM PTE LTD 32 -1
34 IMPEX MARINE (S) PTE LTD 36 +2
35 HAI YIN MARINE PTE LTD 39 +4
36 FRATELLI COSULICH BUNKERS (S) PTE LTD 26 -10
37 VICTORY PTE LTD 35 -2
38 EASTPOINT INTERNATIONAL MARKETING PTE LTD 33 -5
39 HAI FU MARINE SERVICES PTE LTD 40 +1
40 BUNKER B PTE LTD 41 +1
41 SHELL SINGAPORE PTE. LTD. 42 -1
  • Includes conventional bunker and biofuel bunker

This year saw MPA including a list of top biofuel bunker suppliers by volume in 2023 with several new entries recorded supplying biofuel at the world’s largest bunkering port; the data is as follows:

LIST OF ALL BUNKER SUPPLIERS BY VOLUME OF BIOFUEL SUPPLIED (YEAR 2023)
Position in 2023 BUNKER SUPPLIERS Position in 2022
1 MAERSK OIL TRADING SINGAPORE PTE LTD New entry
2 CHEVRON SINGAPORE PTE LTD 1
3 BP SINGAPORE PTE. LIMITED 3
4 VITOL BUNKERS (S) PTE. LTD. 2
5 MINERVA BUNKERING PTE LTD 6
6 TOTALENERGIES MARINE FUELS PTE LTD 4
7 SHELL EASTERN TRADING (PTE) LTD New entry
8 TFG MARINE PTE LTD New entry
9 EXXONMOBIL ASIA PACIFIC PTE LTD 5
10 CATHAY MARINE FUEL OIL TRADING PTE LTD New entry
11 GLOBAL ENERGY TRADING PTE LTD 8
12 GOLDEN ISLAND DIESEL OIL TRADING PTE LTD New entry
13 PETROCHINA INTERNATIONAL (S) PTE LTD New entry
14 KENOIL MARINE SERVICES PTE LTD 9

Manifold Times recently reported a total of 51.82 million tonnes of bunker sales being registered in 2023, surpassing the previous record of 50.64 million tonnes in 2017.

Related: Singapore achieves milestone with record year for bunker sales in 2023
Related: Toyota Tsusho Petroleum removed from licensed bunker suppliers list in Port of Singapore
Related: Exclusive: Estimated marine fuel sales figures of Singapore top 10 bunker suppliers by volume in 2022
RelatedExclusive: Estimated marine fuel sales figures of Singapore top 10 bunker suppliers by volume in 2021
RelatedExclusive: Singapore top bunker suppliers reveal estimated sales volume for 2020
RelatedExclusive: Singapore top bunker suppliers reveal estimated sales volume for 2019
Related: Exclusive: Estimated annual sales volume for Singapore top bunker suppliers (2018)
Related: Exclusive: Singapore top bunker suppliers reveal monthly sales volume (2017)

 

Photo credit: Manifold Times
Published: 16 January 2024

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