Port & Regulatory

ENGINE on The Week in Alt Fuels: Why FuelEU’s first decade matters

First 10 years of FuelEU will provide a window of opportunity to explore alternative bunker fuels and technologies ahead of stricter regulations, according to ENGINE.

Published

2 months ago

January 6, 2025

Admin

ENGINE on The Week in Alt Fuels: Why FuelEU’s first decade matters

The first 10 years of FuelEU will provide a window of opportunity to explore alternative fuels and technologies ahead of stricter regulations.

This year has ushered in a new regulatory era for shipping with the debut of the FuelEU Maritime regulation. This is the EU's first technical regulation aimed at reducing the greenhouse gas (GHG) intensity of maritime transport and promote adoption of low- and zero-emission bunker fuels.

Ships sailing between EU ports must cap the average well-to-wake (WtW) GHG intensity of onboard energy at 89.34 grams of carbon dioxide equivalent per megajoule (gCO2e/MJ) by 2030, and at 85.69 gCO2e/MJ by 2035. Those are 2% and 6% reductions from a 2020 baseline of 91.16 gCO2e/MJ.

These relatively modest targets provide shipowners with some breathing room to prepare for tightening requirements towards an 80% reduction by 2050.

To future-proof their fleets against more stringent targets, shipowners can invest in vessels that can consume fuels with low or zero GHG intensity. These include synthetic fuels such as e-methanol and e-ammonia - which the EU labels renewable fuels of non-biological origin (RFNBOs) - and they are incentivised through a regulatory multiplier available until 2034.

To qualify for the multiplier, a fuel's GHG intensity must be lower than 70% of a reference value of 94 gCO2eq/MJ on a well-to-wake basis.

When a ship uses an RFNBO as its primary fuel, the multiplier essentially halves the onboard GHG intensity of that fuel and leaves a greater "surplus intensity" compared to the GHG intensity target. This compliance surplus can then be used within a pool of vessels to improve the GHG intensity of vessels using conventional fossil fuels.

For example, a DNV study showed that one vessel running on 90% e-methanol (28.20 gCO2e/MJ) and 10% MGO (90.63 gCO2e/MJ) can be averaged out to make up to 55 MGO-fuelled ships/year compliant between 2025-2029. This number drops to 13 ships/year between 2030–2034.

Using 90% near-zero-emission e-methanol (2.47 gCO2e/MJ) with 10% MGO increases this ship's capacity to cover the compliance of 64 other ships/year between 2025-2029, and 16 ships/year between 2030-2034.

Now, from a cost-to-cost standpoint, using RFNBOs is not immediately economical. For instance, the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping (MMMCZCS) has estimated e-methanol to cost $2,750/mt on a VLSFO-equivalent (mtVLSFOe) basis in 2025.

MMMCZCS estimates the potential value of the compliance surplus generated by an e-methanol-fuelled vessel in a pooling arrangement to $280/mtVLSFOe. This still leaves e-methanol far more expensive than VLSFO ($560/mt today), even after accounting for the FuelEU and EU ETS costs for consuming VLSFO.

MMMCZCS projects that RFNBOs will become more cost-competitive only after 2035, as fuel production costs decline and pooling values and VLSFO costs rise on rising regulatory penalties.

But as GHG intensity targets tighten and compliance surpluses decline, the ability to cover other vessels' compliance through pooling will diminish.

This highlights the importance of early planning. These initial years provide shipowners with the opportunity to retrofit existing vessels, invest in newbuilds capable of running on low GHG intensity fuels, and collaborate with fuel suppliers to secure long-term offtake agreements in preparation for stricter targets.

In other news, the Maritime and Port Authority of Singapore (MPA) has announced concessions for ocean-going vessels using alternative fuels or technologies during port stays of up to four days. Vessels using zero-carbon fuels, including ammonia (with pilot fuel capped at 25% and ammonia slip addressed), B100 biofuel, or green methanol, will also receive a full port dues concession. Those using blends between B50 and B99 are eligible for a 30% concession, while blends ranging from B24 to B49 can avail a 20% concession.

Carbon dioxide (CO2) storage and transport firm Northern Lights has announced that the second of four CO2 carriers under construction at Chinese shipyards is now ready for delivery. Its first operational customer will be the German building materials supplier Heidelberg Materials.

By Konica Bhatt

Photo credit and source: ENGINE
Published: 6 January, 2025

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Alternative Fuels

Singapore: MPA issues circular on resolutions adopted at IMO MSC 109

New circular informs shipping community of the resolutions, including on use of ammonia cargo as bunker fuel, and urges the shipping community to prepare for the implementation of these resolutions.

Published

3 hours ago

March 18, 2025

Admin

The Maritime and Port Authority of Singapore (MPA) on Monday (17 March) issued Shipping Circular No. 2 of 2025 regarding resolutions adopted by the 109th session of the Maritime Safety Committee (MSC 109) of the International Maritime Organization (IMO), which was held from 2 to 6 December 2024:

This circular informs the shipping community of the resolutions adopted by MSC 109 and urges the shipping community to prepare for the implementation of these resolutions.

MSC 109 adopted the following mandatory resolutions:

Resolution MSC.566(109) – Amendments to the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code)

This resolution adopts amendments to Chapter 16 of the IGC Code, mainly to allow the use of ammonia cargo as fuel. The amendments will enter into force on 01 July 2026 and will be given effect through the Merchant Shipping (Safety Convention) Regulations.

Resolution MSC.567(109) – Amendments to the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code)

This resolution adopts amendments to IGF Code regarding ship design and arrangements; general pipe design; safety functions of the gas supply system; fire protection; hazardous area zones; and ventilation requirements. The amendments will enter into force on 01 January 2028 and will be given effect through the Merchant Shipping (Safety Convention) Regulations.

MSC 109 also adopted the following resolutions:

Resolution MSC.568(109) – Amendments to the Revised recommendation on testing of life-saving appliances (resolution MSC.81(70))

This resolution adopts amendments to Part 1- Prototype Test for Life-saving Appliances, for self-righting test requirements of totally enclosed lifeboats, under paragraph 6.14.1.1 of the Revised recommendation on testing of life-saving appliances (resolution MSC.81(70)).

Resolution MSC.569(109) – Performance standards for the reception of maritime safety information and search and rescue related information by MF and HF digital navigational data (NAVDAT) system

This resolution adopts the Performance standards for the reception of maritime safety information and search and rescue related information by MF and HF digital NAVDAT system.

Resolution MSC.509(105)/REV.1 – Provision of radio services for the Global Maritime Distress and Safety System (GMDSS)

This resolution adopts the revised Recommendation on provision of radio services for the GMDSS, the Criteria for use when providing shore-based digital selective calling (DSC) facilities for use in the GMDSS, the Criteria for establishing GMDSS sea areas, the Criteria for use when providing a NAVTEX service and the Criteria for use when providing a NAVDAT service, set out in annexes 1 to 5, respectively, to the resolution. This resolution revokes resolution MSC.509(105).

Resolution MSC.570(109) – Performance standards for a universal shipborne Automatic Identification System (AIS)

This resolution adopts the revised Performance standards for a universal shipborne AIS, recognising the need for measures to prevent unauthorised entry or tampering of the ship's identity information in shipborne AIS.

Any queries relating to this circular should be directed to MPA Shipping Division via email at [email protected].

Photo credit: Maritime and Port Authority of Singapore
Published: 18 March, 2025

Alternative Fuels

AAL Shipping names methanol-ready multipurpose heavy lift vessel in China

Singapore-based AAL Shipping says it held a naming ceremony for “AAL Dubai” – a multipurpose heavy lift vessel that is methanol-ready – at CSSC Huangpu-Wenchong Shipyard in Guangzhou.

Published

4 hours ago

March 18, 2025

Admin

AAL Shipping names methanol-ready multipurpose heavy lift vessel in China

Singapore-headquartered project heavy lift carrier AAL Shipping (AAL) on Thursday (13 March) said it held a formal naming ceremony for its fifth Super B-Class vessel, AAL Dubai.

The 32,000 dwt AAL Dubai – a multipurpose heavy lift vessel that is methanol-ready – was officially named on March 12 at the CSSC Huangpu-Wenchong Shipyard in Guangzhou, China.

The AAL Dubai is engineered to transport a vast array of cargo, including heavy lift project equipment, breakbulk, and dry bulk, all on a single voyage. With a combined lifting capacity of 700 tonnes, this vessel is designed to offer high efficiency, cargo flexibility, and economies of scale to shippers worldwide.

The vessel will now embark on its maiden voyage, joining sister vessels AAL Limassol, AAL Hamburg, AAL Houston, and AAL Antwerp in serving project cargo customers across Asia, Europe, the Middle East, and the Americas.

“We are now over the halfway mark with our Super B-Class deliveries, and those already in service are exceeding our expectations,” said Liew Teck Liong, Chief Financial Officer at AAL.

“With these vessels, we have achieved both company and industry firsts, and we look forward to redefining what a heavy lift, multipurpose vessel can accomplish as we deploy them for complex cargo challenges.”

Later this year, AAL will take delivery of the AAL Dammam, which will be shortly followed by the AAL Newcastle and AAL Mumbai that have an increased maximum heavy lift capability of 800 tonnes.

Photo credit: AAL Shipping
Published: 18 March, 2025

LNG Bunkering

Titan completes first LNG and bio-LNG bunkering op to MOL under new term contract

Titan’s LNG bunkering vessel “Alice Cosulich” delivered 500 mt of bio-LNG and 400 mt of conventional LNG to vehicle carrier “Celeste Ace” during a SIMOPS bunkering in Port of Zeebrugge.

Published

4 hours ago

March 18, 2025

Admin

Titan completes first LNG and bio-LNG bunkering op to MOL under new term contract

Titan Clean Fuels (Titan) on Monday (17 March) said it has completed the first LNG and liquefied biomethane (bio-LNG) bunkering operation of a new multi-delivery contract for Mitsui O.S.K. Lines’ vehicle carrier fleet.

On 16 March, Titan’s Alice Cosulich LNG bunkering vessel delivered 500 metric tonnes (mt) of bio-LNG and 400 mt of conventional LNG to the Celeste Ace vehicle carrier. The simultaneous operation (SIMOPS) bunkering took place in the Port of Zeebrugge’s International Car Operators (ICO) terminal.

Titan’s delivery of ISCC-EU-certified mass-balanced bio-LNG marks the first of a series of bio-LNG deliveries to the Japanese shipping company. The bio-LNG was produced using waste and residue, which reduces GHG emissions by up to 100% compared to marine diesel on a well-to-wake basis. LNG, bio-LNG, and renewable hydrogen-derived e-methane can be blended at any ratio and ‘dropped into’ existing LNG bunkering infrastructure with little to no modification.

Caspar Gooren, Commercial Director of Renewable Fuels at Titan, said: “This bunkering highlights the growing role of bio-LNG in decarbonizing international shipping today. With bio-LNG availability expanding, its deep decarbonization potential, and increasing commercial viability, the LNG pathway offers practical solutions for shipowners and operators. Moreover, with a global maritime leader like MOL putting its commercial weight behind bio-LNG, this is an exciting time for the clean fuels transition.”

Yoshikazu Urushitani, Marine Fuel GX Division General Manager at MOL, said: “We are exploring the use of ammonia and hydrogen fuels as part of our strategy to adopt clean alternative fuels, while moving to expand the use of LNG-fueled vessels and more quickly achieve a low-carbon society. We will also be early adopters of bio-LNG and synthetic LNG. Partnering with Titan, we will start using bio-LNG to lead the shipping industry in the transition to clean alternative fuels. We remain committed to adopting clean fuels to reach net zero GHG emissions by 2050.”

MOL currently operates five LNG-fuelled vehicle carriers and will have six more delivered by the middle of 2025.

Photo credit: Titan
Published: 18 March, 2025