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DNV overview on SMW 2023: Singapore charts forward in the maritime transition

Remi Eriksen of DNV Group, shared during event, the business case for decarbonization must involve four key factors including alternative bunker fuels once safety guidelines and bunkering infrastructure are established.

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After a four-year hiatus, Sea Asia 2023 returned to the sunny shores of Singapore with a bang! Widely regarded as one of the most important maritime events in Asia, the trade fair was held alongside the annual Singapore Maritime Week (SMW) between 24 – 28 April 2023.

Themed ‘Ambition Meets Action,’ SMW 2023 spotlighted the need for collective action to achieve the industry’s ambition for innovation, decarbonization, and talent. The event’s focus was strongly aligned with DNV’s own agenda to support decarbonization and digitalization in the mission to make the world safer, smarter and greener.

Record attendance of 20.000 participants

SMW saw participation from international maritime companies, stakeholders and decision-makers in a series of about 50 conferences and seminars, which ran in parallel with the Sea Asia 2023 exhibition at Marina Bay Sands. According to the organizers, the show was the largest to date, with 20.000 participants and more than 300 exhibitors from 70 countries.

As sponsors of Sea Asia 2023, it was an action packed few days for DNV, with the leadership team, including Group President and CEO Remi Eriksen, participating in several notable conferences, signing ceremonies and meetings with partners and customers.

On the first day of SMW, the 5th Annual Capital Link Singapore Maritime Forum underscored the importance of high-level industry involvement to address global maritime issues and ambitions.

This was evident in the panel on “Fleet renewal Options and Strategies – Positioning for Long term Competitiveness”, moderated by Cristina Saenz de Santa Maria, Regional Manager South East Asia, Pacific & India at DNV Maritime.

It paid due attention to today’s challenges for existing fleet owners and operators, as much as looking at what’s required for the global industry to be “future ready”.

The panel agreed that a combination of solutions is available now – smart navigational aids and fuel efficiency measures, for example – which can address current challenges, as well as help the industry to decarbonize and make it through the very necessary energy transition.

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The 5th Annual Capital Link Singapore Maritime Forum discussed “Fleet renewal Options and Strategies”

Fergus Eley, Head of Maritime Enterprise for BHP, said his company is already delivering on decarbonization, by employing technology and commercial solutions to improve the global supply chain, while Shmuel Yoskovitz, Chief Executive Officer, X-Press Feeders, made a strong call for much closer industry collaboration to deal with current and future challenges: “Ship owners and operators must work together.”

Fellow panelist Yvette van der Sommen, Director Asia Pacific at Value Maritime, saw the future for shipping where a mix of technologies and fuels will be fully utilized, including her company’s very own CO₂ capture and storage solution, while Hing Chao, Executive Chairman, Wah Kwong Maritime Transport Holdings, agreed that the industry should capitalize on CO₂  “as a highly valuable resource” as the maritime sector joins the circular economy and makes the energy transition at the same time.

Stamatis Tsantanis, Chairman and CEO of Seanergy Maritime Holdings Corp, questioned whether the industry was doing enough to deal with existing fleets. Before the global industry introduces new and alternative fuels, he insists it must work on improving the current performance of vessels operating.

First ammonia ship to ship transfer pilots on the horizon

One of the highlights of Singapore Maritime Week 2023 was the launch of the comprehensive study “Safety and Operational Guidelines for Piloting Ammonia Bunkering in Singapore” by the Global Centre for Maritime Decarbonisation (GCMD) and its appointed consultant DNV Maritime Academy, supported by Surbana Jurong (SJ) and the Singapore Maritime Academy (SMA).

The study represents Singapore’s global leadership for considering in depth, the viability of ammonia as a future fuel for the international maritime industry, and how the most important bunkering port in the world could introduce ammonia in the safest and most efficient manner.

While there’s a full report on the study in Manifold Times, here’s what Knut Ørbeck-Nilssen, CEO of DNV Maritime, had to say about it: “Ammonia holds potential for a future maritime fuel and thus one pathway for the maritime industry’s decarbonization journey. This project will help lay the safety considerations for ammonia bunkering.

“Safety lies at the heart of the guidelines that DNV helped to develop for this pilot in Singapore. Further pilots and studies are key to understand, assess and mitigate safety risks associated with using ammonia fuel onboard the global fleet.”

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CEOs sharing their vision on “Delivering Net-Zero”, with DNV Group President and CEO Remi Eriksen on the right

Key factors for accelerating decarbonization

Besides this significant announcement, there were many other notable highlights of Singapore Maritime Week (SMW), including the attendance and involvement of Remi Eriksen, DNV Group President and CEO.

He played a prominent role in the session on “Accelerating Decarbonization”, where a number of CEOs shared their vision on “Delivering Net-Zero”.

Mr Eriksen believes the business case for decarbonization must involve four key factors:

  • Electrification of as many (shortsea) vessels as possible, running on renewable energy/batteries
  • Well-maintained ships, applying fuel efficiency devices
  • Alternative fuels, like hydrogen and ammonia, once we’ve established safety guidelines and the bunkering infrastructure
  • Carbon Capture Utilization and Storage (CCUS) to help get the sector towards net zero

When asked to sum up the session, Mr Eriksen put it this way:

“We know where we have to go. There’s no time to waste. We need to move fast.”

Advancing the multi-fuel transition

Mr Eriksen also participated as a member of the Maritime International Advisory Panel (IAP), which held its second annual meeting during Singapore Maritime Week.

The Maritime IAP meeting recognized that decarbonization of the maritime sector should not be viewed in isolation, rather synergistically across different sectors and with each country’s domestic clean energy strategy.

Among other solutions, the IAP panel recommended that governments and the maritime industry could work with adjacent sectors, such as aviation and energy, to aggregate energy demand for low- and zero-carbon fuel solutions.

The IAP noted that the need for a multi-fuel transition would require significant capital expenditure, especially in its infancy, and discussed how the industry’s willingness to invest in commercial solutions could be coupled with support from governments to lower cost barriers and incentivize early movers, where regulatory changes would be required.

Key enabler for smart shipping globally

MarineTech Conference’s panel discussion on “Smart Ship Developments, Trends and Priorities” during SMW saw DNV Maritime’s Strategic Development Director Dr Pierre Sames highlighting the important achievement of widespread connectivity as the key enabler for smart shipping globally.

“We have talked about this for decades but now it is working, so assets are being connected like machines on a factory floor.”

Dr Sames considers that this smart shipping trend contributes directly to decarbonization, as well as decreased operational costs for the maritime industry.

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A busy DNV booth during Sea Asia, which saw a number of experts presenting topics such as "Emissions Connect by DNV"

Emissions Connect: data for sustainable operations

Sea Asia Industry Insights were provided at the DNV booth by a number of expert speakers, including Magnus Lande, Product Line Director Veracity Data Platform. He explained that “Emissions Connect by DNV” fuels industry collaboration by equipping the maritime value chain with capabilities to verify and share emissions data.

Therefore, it provides the trusted basis needed to facilitate settlement of ETS (EUs Emissions Trading System) allowances and to operationally control CII (Carbon Intensity Indicator) performance.

Mr Lande also spoke at a session entitled “Innovate to Zero: Digitalization Advancing Decarbonization of Maritime Trade”, organized by Norwegian Business Association Singapore (NBAS), and showed how “shipping companies can build confidence into their emissions data”.

Maritime Manpower forum emphasizes human element in the industry transformation

The panel discussion on “Preparing the Maritime Workforce for the Decade of Transformation” was held on the last SMW day and was moderated by Dr Shahrin Osman, Regional Head of Maritime Advisory at DNV.

Coinciding with the elevated emphasis on global and local maritime industry manpower issues and opportunities was the release of the DNV study  “The Future of Seafarers 2030: A Decade of Transformation”, co-sponsored by Singapore Maritime Foundation (SMF).

The study examines the key drivers transforming the maritime industry – particularly decarbonization and digitalization – and their impact on sea-going professionals in the lead-up to 2030, advancing the conversation on the training and development, as well as how to attract and retain the talent pool.

The findings were obtained through a combination of literature review, expert consultations, and a survey of more than 500 seafarers collectively responsible for operating dry bulk, tanker, and container vessels globally. 70% of the seafarers who responded to the survey had been in the industry for over 11 years.

Pressing need for training in new fuels and technology

The key findings of the DNV study include:

  • 87% of respondents indicated a need for partial or complete training regarding emerging fuels such as ammonia, methanol, and hydrogen
  • A total of 81% of respondents said that they require training in dealing with advanced digital technologies such as further automation of equipment/systems, advanced sensors, artificial intelligence, remote operations etc.)
  • A total of 55% of respondents indicated that new developments in fuels, automation and digitalization onboard ships can assist in attracting new seafarers to a career at sea and retaining existing seafarers

On top of the strong emphasis on manpower challenges in forum discussions and with the release of DNV’s comprehensive study, the Maritime IAP panel also stressed the importance of attraction, recruitment, and retention of talent, especially as the maritime industry accelerates digital transformation and advances the multi-fuel transition.

Tripartite collaborations with clear and regular communication to maritime workers will become increasingly important to encourage upskilling, retraining, and strengthening the maritime workforce to prepare them for the transformation, the IAP noted.

The last word to wrap up SMW must go to Singapore’s Minister of Transport, Mr S Iswaran, when thanking IAP members for their invaluable views and insightful contributions over the week:

“As a global maritime hub, Singapore remains committed to work with like-minded partners across industries and regions to support and accelerate maritime digitalization and decarbonization efforts.

“The IAP members have been strong allies in driving transformation of the maritime sector, and I look forward to sustaining this spirit of cooperation as we chart a path forward for the maritime sector.”

Related: Completed safety study paves way for first ammonia bunkering pilot in Singapore
Related: SMW 2023: DNV joins Standards working group on methanol bunkering
Related: SMW 2023: MPA, classification societies to collaborate on maritime decarbonisation
Related: SMW 2023: DNV joins Standards working group on methanol bunkering
Related: SMW 2023: Maritime IAP discusses multi-fuel transition at annual meeting

 

Photo credit: DNV
Published: 11 May, 2023

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LNG Bunkering

Titan completes first STS LNG bunkering operation in Cuxhaven

Port of Cuxhaven in Germany had previously only seen LNG operations conducted via truck and currently only permits LNG bunkering at one berth, says Titan.

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Titan completes first STS LNG bunkering operation in Cuxhaven

LNG bunker fuel supplier Titan on Thursday (11 July) said it completed the first-ever LNG bunkering operation by ship in the port of Cuxhaven.

Titan’s bunker vessel Optimus successfully delivered LNG to dredger Vox Ariane operated by its long-term client Van Oord. 

“Our ship-to-ship bunkering in Cuxhaven represents a pioneering step in the region's LNG infrastructure development, as the port had previously only seen LNG operations conducted via truck and currently only permits LNG bunkering at one berth,” it said in a social media post. 

“LNG infrastructure development is part of a broader trend, with more ports across Germany adopting LNG operations to support shipping’s clean fuels transition.”

Titan added the improved LNG bunkering capabilities in Cuxhaven, a Niedersachsen Ports GmbH & Co. KG port, also opened up the pathway to maritime decarbonisation via liquified biomethane (LBM) and then renewable e-methane going forward.

 

Photo credit: Titan
Published: 12 July, 2024

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LNG Bunkering

UECC “Auto Achieve” receives first LNG bunker fuel delivery by barge in home country

Firm said it received the first ever supply of LNG by barge to their multi-fuel LNG battery hybrid car carrier in the Port of Drammen, Norway.

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UECC “Auto Achieve” receives first LNG bunker fuel delivery by barge in home country

Norwegian roll-on/roll-off shipping line United European Car Carriers (UECC) on Wednesday (10 July) said it received the first ever supply of LNG by barge to their multi-fuel LNG battery hybrid car carrier Auto Achieve in the Port of Drammen on 4 July.

The firm said this was the first time UECC received LNG by barge to any of their vessels in their home country Norway. 

“We also believe that it was the first time LNG was delivered by barge to any vessel in Drammen, and most likely the entire Oslofjord,” UECC said in a social media post.

The LNG was supplied by the Molgas Energy Holding vessel Pioneer Knutsen, owned by Knutsen Group OAS.

“UECC is very pleased to see the expansion of the LNG barge network in Norway,” it said. 

 

Photo credit: UECC
Published: 12 July, 2024

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FuelEU

OceanScore reveals ship segments set to feel EUR 1.3 billion sting of FuelEU penalties

Container segment will bear the brunt of FuelEU costs, accounting for 29% of gross penalties, followed by RoPax on 14% with tankers and bulkers each on 13%, says firm.

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OceanScore Managing Director Albrecht Grell

Hamburg-based technology platform OceanScore on Tuesday (9 July) said the financial impact of FuelEU Maritime is focusing the minds of shipping companies as they face potential penalties for non-compliance with greenhouse gas (GHG) intensity reduction targets - and OceanScore has identified those segments set to be hit hardest.

The following is an article by OceanScore elaborating on the matter:

Vessels in the passenger/cruise, container, RoPax, bulker and tanker segments will have significant cost exposure from the complex regulation due to be implemented from 1 January next year, despite a relatively modest initial target of a 2% cut in GHG intensity, according to OceanScore.

The firm’s data analytics team has calculated that shipping will rack up total FuelEU penalties of €1.345 billion in 2025 through analysis of the 13,000 vessels over 5000gt trading within and into the EU/EEA that are subject to the regulation. This is based on data on trading patterns and fuel mix from 2022 - the last full year currently available.

Containers bear burden

The team has been able to determine FuelEU compliance balances and resulting penalties for each vessel using OceanScore’s proprietary data modelling incorporating AIS data, Thetis emissions data, bunker intelligence and advanced analytics/AI. It has factored in the likely fuel mix for each vessel between EU ports and to/from the EU, as well as in ports.

Vessels will be hit with a penalty of €2400 per tonne of VLSFO-equivalent for failing to meet the initial 2% reduction target relative to a 2020 baseline for average well-to-wake GHG intensity from fleet energy consumption of 91.16 gCO2e per megajoule (MJ) - or emissions per energy unit. The GHG intensity requirement applies to 100% of energy used on voyages and port calls within the EU/EEA and 50% of voyages into and out of the bloc.

As with the EU Emissions Trading System (EU ETS), it is the container segment that will bear the brunt of FuelEU costs, accounting for 29% of gross penalties, followed by RoPax on 14% with tankers and bulkers each on 13%.

“It is critical for shipping companies to determine a baseline for expected FuelEU costs to secure proper planning and budgeting processes to compare different mitigation options, as well as to decide what to do with outstanding compliance balances,” says OceanScore Managing Director Albrecht Grell.

“This will require, to a higher degree than the EU ETS, a corporate strategy to determine how to reduce the compliance balance/deficit, how to commercialise a surplus and deal with deficits that remain.”

Wide spread of vessel liabilities

OceanScore has found that liabilities per vessel will differ widely across the various segments due to increasingly diversified fuel choices, including greater uptake of biofuels and LNG. Passenger vessels will be penalised the most with an average of €520,000 per vessel annually, followed by RoPax at €480,000 and RoRo at €314,000, with an average penalty for container ships of only €214,000, according to OceanScore.

Grell points out there are also massive discrepancies between vessels within these segments, with a number of ships in the passenger and RoPax segments exposed to penalties of between €1.8m and €2.5m, and payment obligations for some container ships approaching €1m. This is driven by higher energy consumption simply due to vessel size and trading profile.

While penalties will arise from so-called compliance deficits for vessels using conventional fuels, surpluses totalling an estimated €669m will be generated mainly by vessels fuelled by LNG and LPG with significantly lower carbon intensity.

LNG carriers will account for 78% of the total market surplus and gas carriers 8%, while a further 8% will be generated by container ships that have seen a modest uptake in alternative fuels in recent years.

Pooling can halve costs for the industry

Taking into account this estimated compliance surplus, the net cost of FuelEU penalties for shipping from 2025 would be €680m, which indicates that pooling of vessels can roughly halve the gross burden for the industry.

Penalties will, in segments typically using conventional fuels with comparable carbon intensities such as HFO, LFO or MDO, be roughly proportional to the overall fuel consumption, thus correlating with the EU ETS cost.

Initial costs of FuelEU for most conventionally fuelled vessels, prior to pooling, will be around one-third of those associated with the EU ETS next year when the latter regulation will have 70% phase-in. But ultimately FuelEU is likely to prove a much more costly affair as the requirement for GHG intensity cuts rises to 6% by 2030 and then accelerates to reach 80% by 2050.

“It is therefore incumbent on shipowners to define their strategies not only towards fuel choices and the use of onshore power but also towards handling of residual compliance balances such as pooling, banking and borrowing of balances, to mitigate the financial impact of FuelEU. However, pooling will also come at a cost, while banking and borrowing will incur interest costs and only push liabilities into the future,” Grell explains.

‘Sound administrative processes’

He further points out that pooling compensations paid between different shipping companies will effectively divert cash flow away from the EU that it would otherwise have earned from FuelEU penalties – but that this effect is intended by the regulator to “reward” early adopters of clean fuels.

Another factor that will curb potential income for the EU from this regulation is that the compliance gap has been reduced to only 1.6% by 2022, as average GHG intensity from shipping has come down by 0.4% to 90.82 gCO2e per MJ, mainly due to increased LNG carrier calls to Europe after gas supplies via pipelines from Russia were halted when the latter invaded Ukraine. Given this trend and increasing adoption of biofuels, the 2% compliance gap will probably be closed before the first tightening of reduction targets in 2030.

Grell says the priority for shipping companies, especially at this early stage while cost exposure is relatively low, is to get to grips with the complexity of the regulation and tackle the risks arising from the fact the party liable for penalties - the DoC holder, or possibly shipowner - is not the one responsible for emissions, which is typically the charterer.

“As well as having costs oversight, companies require reliable monitoring and reporting mechanisms with high-quality emissions data. They must also have in place complex contractual arrangements and sound administrative processes to manage compliance and mitigate the financial consequences of the new regulation,” Grell concludes.

Related: FuelEU: New regulation leaves DoC holder with fuel liabilities risk, says OceanScore
Related: ‘Big opportunity’ for bunker traders, suppliers on upcoming FuelEU regulation, forecasts OceanScore

 

Photo credit: OceanScore
Published: 12 July, 2024

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