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DNV: Is there a business case for ammonia and hydrogen as an alternative bunkering fuel?

Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific & India, Maritime at DNV, summarises a panel discussion with industry experts at SIBCON 2022.

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The following article was published by Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific & India, Maritime at DNV, on Monday (10 October) through the social media platform LinkedIn; it has been reproduced on Manifold Times with permission from DNV:

Before there is a viable business case for alternative maritime fuels like ammonia and hydrogen, there’s a lot of work to do, according to a SIBCON panel of industry experts, I was happy to moderate last week.

My panellists Murali Srinivasan, Peter Liew, Raghav Gulati and Takahiro Rokuroda shared about the various ammonia and hydrogen projects their companies Yara International, Eaglestar, Anglo American and NYK Line are currently conducting, and drew attention to five main points in the discussion:

  • There is need for regulations and standards to be set for these fuels, so the International Maritime Organisation (IMO) must step up to the mark;
  • Technology around the new fuels is available and being put to the test in good pilot programmes around the world;
  • There is no real business case for ammonia and hydrogen without a carbon price or carbon tax being applied to fossil fuels;
  • To have a level playing field for alternative fuels, all stakeholders must collaborate and develop effective partnerships;
  • Safety is paramount, as while ammonia has been safely transported on vessels for a long time, it has not yet been applied as a bunkering fuel.

Many companies might know how to ship ammonia, but all stakeholders must make sure safety measures are in place for ammonia to be widely used as a bunkering fuel.

It was also pointed out that the industry must expedite the introduction of alternative fuels, like ammonia and hydrogen, but we cannot take as many years as was the case with LNG.

We all agreed that the industry must come together – collaborate and partners – to meet our collective commitments to decarbonise. Caution was expressed about concentrating on just one fuel. There must be a multi-fuel solution and vessels must be equipped accordingly.

Having the infrastructure in place to support a mix of fuels and making sure it is in the places where it’s needed, was a strong point raised by our panel.

Panellists sited many examples around the world where industry collaboration was taking place, but we need to see IMO stepping up to put in place the necessary regulations and standards for new bunkering fuels like ammonia and hydrogen.

We know that a number of maritime companies are clearly looking at all options when it comes to alternative fuels, but ammonia was coming up as one of the more realistic solutions.

For ship owners and operators, one of the biggest challenges is the toxicity of ammonia. Therefore, much needs to be done to ensure safety measures, technology and regulations are in place, and we in DNV will play our part in this process.

My esteemed panellists stressed the need to make sure crews are trained to handle ammonia, at ports and at sea. It was of utmost importance to start training crews and bunkering staff in time, not wait until the first ammonia and hydrogen fuelled vessels hit the water.

When I asked the panellists – “Like all other alternative fuels, ammonia and hydrogen will be much more expensive and according to DNV projections, at least two times more than current fuels. Is there a business case yet – and if not, what is needed?” – there was general agreement that “the business case is not yet there” for the adoption of ammonia and hydrogen as bunkering fuels.

An effective workable carbon price/tax on fossil fuels would help provide “a level playing field” for a transition to alternative clean fuels. One panellist also called for more incentives to drive the transition to cleaner fuels like ammonia and hydrogen.

Already there is considerable investment in renewable fuels, as well as in adapting ship and engine design to accommodate fuels like hydrogen and ammonia. However, more infrastructure and regulation are necessary, along with a greater degree of collaboration and co-operation involving all maritime stakeholders.

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As the world’s biggest bunkering hub, Singapore is already playing an important leadership role, joining forces with ports and other stakeholders around the world to advance maritime decarbonisation.

The Global Centre for Maritime Decarbonisation (GCMD) is an excellent example of public-private partnership, seeing collaboration at work between government authorities and industry. I’m very excited that we in DNV are leading the GCMD-commissioned ammonia bunkering safety study and I look forward to its results in Q1 2023.

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In conclusion, my panellists agreed that Singapore was providing many good initiatives of industry collaboration and partnerships for decarbonisation and adoption of alternative fuels, so the local cluster has every reason to be optimistic while helping the shipping industry accelerating on its Net Zero pathway.

Photo credit: DNV
Source: LinkedIn
Published: 12 October, 2022

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Methanol

VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Firm was appointed by OCI Methanol Europe to conduct a quantity and quality assessment of a methanol bunker fuel delivery to “Eco Maestro” in Singapore.

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VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Marine fuels testing company VPS on Tuesday (28 May) said it was appointed by OCI Methanol Europe, part of the OCI Global Group, to conduct a quantity and quality assessment of a methanol fuel delivery to Eco Maestro in Singapore.

Captain Rahul Choudhuri, President Strategic Partnerships, VPS, said VPS survey experts Rafael Theseira and Muhd Nazmi Abdul Rahim were at hand during the methanol bunkering to ensure the 300 metric tonnes of methanol transfer was carried out smoothly, having been involved in the first methanol bunkering a year ago. 

Manifold Times recently reported X-Press Feeders, Global Energy Trading Pte Ltd (GET), and PSA Singapore (PSA) successfully completing the first simultaneous methanol bunkering and cargo operation (SIMOPS) in Singapore.

A X-Press Feeder container vessel, Eco Maestro, on its maiden voyage from Asia to Europe was successfully refuelled with close to 300 mt of bio-methanol by GET, a MPA licensed bunker supplier, using MT KARA

The ISCC-certified bio-methanol used for the SIMOPS was produced by green methanol producer OCI Global and supplied via GET, a ISCC-certified supplier.

Captain Choudhuri said the role of the marine, petroleum or bunker surveyor has evolved over the years in shipping and maritime affairs, but the principles have not - and that is to provide independent assessment of the quality and quantity of the product transfer. 

“This may seem obvious but this quality and quantity control is crucial to avoid commercial discrepancies, shortages or fraud,” he said.

“Safety training is critical and we have been on top of this having completed the required MPA fire-fighting course and the IBIA Methanol training course. We will work more with the Singapore Maritime Academy for trainings in future,” he added.

In August last year, Singapore-headquartered independent common carrier X-Press Feeders launched its first ever dual-fuel vessel Eco Maestro in China.

Manifold Times previously reported VPS stating it was the first company to complete a methanol bunker quantity survey (BQS) operation in Singapore on 27 July last year.

VPS was appointed by Maersk and Hong Lam Marine Pte Ltd, to undertake the very first bunker quantity survey (BQS) of a methanol fuel delivery, supplied by Hong Lam to the Maersk vessel on its maiden voyage to Europe. 

Related: First SIMOPS methanol bunkering operation completed in Singapore
Related: VPS completes quantity survey on Singapore’s first methanol bunkering op
Related: Singapore bunkering sector enters milestone with first methanol marine refuelling op
Related: X-Press Feeders launches its first methanol dual-fuel vessel “Eco Maestro” in China

 

Photo credit: VPS
Published: 29 May 2024

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LNG Bunkering

Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Agreement builds on the success of the previous contract Gasum has had with Equinor; Gasum’s bunker vessels “Coralius”, “Kairos” and “Coral Energy” will be used for the bunkering operations.

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Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Nordic liquefied natural gas (LNG) bunker supplier Gasum on Tuesday (28 May) said it signed a long-term contract with Norway-based global energy company Equinor whereby Gasum continues to supply LNG to Equinor’s dual-fuel chartered fleet of vessels. 

The agreement builds on the success of the previous contract Gasum has had with Equinor. Gasum’s bunker vessels Coralius, Kairos and Coral Energy will be used for the bunkering operations.

The agreement also includes additional support services such as cooling down and gassing up, which has also been a part of Gasum’s previous collaboration with Equinor. 

Gasum has organised three separate LNG cool down operations for Equinor in Skagen so far this year.

Both Gasum and Equinor have committed to sustainability goals to enable a cleaner energy future. Equinor’s ambition is to become a net-zero emissions energy company by 2050.

Using LNG in maritime transport means complete removal of sulfur oxides (SOx) and particles, and reduction of nitrogen oxides (NOx) emissions of up to 85 percent as well as a reduction in CO2 emissions by at least 20%. LNG is interchangeable with liquefied biogas (LBG/bio-LNG), which reduces carbon dioxide emissions by 90% compared to conventional fuel such as marine gasoil (MGO).

With LNG and bio-LNG the maritime industry can reduce emissions already today, instead of waiting for future solutions. Gasum’s strategic goal is to bring yearly seven terawatt hours (7 TWh) of renewable gas to market by 2027. Achieving this goal would mean combined carbon dioxide reduction of 1.8 million tons per year for Gasum’s customers.

Related: Equinor Energy AS extends LNG bunkering agreement with Gasum
Related: Gasum expands LNG bunkering business to ARA region through partnership with Equinor

 

Photo credit: Gasum
Published: 29 May 2024

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Methanol

Consortium inks MoU for facility in Egypt to produce green methanol bunker fuel

AD Ports Group, Transmar and Orascom Construction will develop a green methanol storage and export facility, which will provide bunkering solutions for mainliners who have ordered green methanol powered vessels.

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Consortium inks MoU for facility in Egypt to produce green methanol bunker fuel

AD Ports Group, a facilitator of global trade, logistics and industry on Tuesday (28 May) said it signed a memorandum of understanding (MoU) with container shipping line and terminal operator Transmar and global engineering and construction contractor Orascom Construction for the development of a green methanol storage and export facility. 

AD Ports Group said the facility will aim to supply low-carbon fuel for maritime transport, presenting an opportunity to establish clean alternative energy storage solutions globally.

Green methanol is a synthetic fuel produced renewably and without polluting emissions, and can be produced from green hydrogen. This chemical compound can be used as a low-carbon liquid fuel and is a promising alternative to fossil fuels in areas where decarbonisation is a major challenge.  

Aside from the maritime industry, green methanol can help decarbonise other hard-to-abate industries, including chemical and plastics. 

“The addition of a facility in this area will provide bunkering solutions for those mainliners who have ordered green methanol powered vessels and is aligned with AD Ports Group’s overall decarbonisation strategy and expansion into clean energy liquid bulk storage,” the Group added.

Captain Ammar Mubarak Al Shaiba, CEO – Maritime & Shipping Cluster, AD Ports Group, said: "By signing this MoU with Orascom Construction who have vast international experience in bulk liquid terminals for Methanol storage, and Transmar, who have decades of expertise in this region and within terminal operations, AD Ports Group and its subsidiaries are taking a significant step towards the sustainable future of energy.”

“This initiative not only aligns with the UAE's decarbonisation goals but also accelerates the energy transition in shipping, positioning us at the forefront of the green hydrogen revolution and enabling us to contribute to global environmental stewardship and economic diversification."

 

Photo credit: AD Ports Group
Published: 29 May 2024

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