Alternative Fuels
Gard: Making the case for nuclear power in shipping
Professor Jan Emblemsvåg of the Norwegian University of Science and Technology explains why nuclear power should be in the mix of alternative bunker fuels to power the green transition in shipping.
Published
1 year agoon
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AdminMaritime protection and indemnity (P&I) club Gard on Tuesday (4 July) published an article written by Professor Jan Emblemsvåg of the Norwegian University of Science and Technology, who explains why nuclear power should be in the mix of alternative bunker fuels to power the green transition in shipping:
Professor Jan Emblemsvåg of the Norwegian University of Science and Technology recently spoke at the Gard Summer Seminar “Making Waves – geopolitics, energy and the future of shipping.” He is a knowledgeable and outspoken proponent of nuclear power for vessel propulsion and made a strong case for including nuclear reactors in the mix of alternative fuels to power the green transition.
Upscaling of green fuels may be unrealistic
Green ammonia is often presented as a solution to decarbonize shipping and large transporters. There is a slight problem, though: volume and energy density.
The large container ships (larger than 10.000 TEUs) exemplify the situation. In 2020, about 580 such large container ships sailed the seas, and they typically consume 250 – 350 tons Heavy Fuel Oil (HFO) every day. This equals an average energy requirement of 3,350 MWh per day since a tonne of HFO has a thermal value of 11.2 MWh/tonne. As ammonia has a thermal value of 5.2 MWh/tonne, such a ship requires about twice as much green ammonia as HFO in terms of volume.
Green ammonia requires electrolysis, and somewhere between 9 – 15 MWh per tonne is required. Using the center point, we find that to replace 1 TWh thermal energy in shipping, 2.2 TWh of electric energy is required when using green ammonia. The annual global marine fuel consumption is about 300 million tonnes annually. Using the same calculation, the amount of electricity required is 7,778 TWh/yr, or almost 2.7 times the total EU electricity production in 2021 (2,888 TWh/yr).
For context, the total greenhouse gas emissions from the marine industry are about 3% of the total global emissions. This amounts to just over the emissions of Germany as a whole country. Indeed, without any effective countermeasures, international shipping is expected to reach 10 – 13% of global emissions within a few decades.
Clearly, the case for decarbonization of shipping is not only very demanding but also highly unrealistic with today’s path. Fresh thinking is required.
Shipping going nuclear
The nuclear option comes on the table simply by energy density. Natural uranium contains 3 million times more energy than coal, and thorium contains 3.5 million times more energy than coal. The green transition is all about power/energy density, which Vaclav Smil notes has always been the historical trend in the past. The only difference this time, is that we must avoid emissions. By going nuclear there are no emissions since the process is fission and not combustion. Another upside to nuclear is availability of materials. An EU report from 2020 details the riskiness of today’s energy policy due to the limited availability of materials for both renewable energy and electric vehicles. Uranium, however, can be extracted directly from seawater in vast quantities at reasonable costs.
Finally, nuclear provides a cost advantage. In my own research, I have demonstrated that for an Aframax tanker operating between Singapore and the Persian Gulf, the nuclear option can in fact cut costs compared to HFO. Nuclear also has the capability of providing synthetic fuel at competitive levels. At the nuclear power plant Nine-Mile-Point in the USA, the target is to produce hydrogen at 1 USD/kg within 10 years, which is actually cheaper than hydrogen from most fossil energy sources today which operate at 0.7-1.6 USD/kg! Competing technologies are expected to reach 1,5 USD/kg at best.
Why it didn’t work before
The question about nuclear in the past and why it has not made it into commercial shipping by now, is a very valid question. Indeed, three nuclear-powered merchant vessels have been constructed decades ago, but they all succumbed to costs. The key difference now, however, is the reactor design.
All past nuclear-powered vessels, including military, have used a Light-Water Reactor (LWR) of some sort. These reactors use uranium as fuel and water as coolant. To provide maximum thermal efficiencies they are pressurized. Pressurization introduces an explosion risk (true for any pressurized system, not only nuclear), and to counter this risk numerous safety mechanisms are introduced. Hence, the reactors are completely safe, but the additional safety costs money. Also, water has low thermal density compared to other coolants now being suggested such as liquid lead and molten salt. This makes it harder to design small LWRs with as high output as those using alternative coolants. Therefore, the use of a LWR requires a certain size to be cost competitive. However, modularization and industrialization has improved this situation – also for other types of reactors.
Another perspective to keep in mind is that the new reactor designs are inherently safer than those in the past. This not only makes the very notion of having nuclear reactors on merchant ships doable, but it also saves costs as the complexity of the entire reactor system can be simplified. This was exemplified by the work performed at Oak Ridge National Laboratory in the 60s and 70s where the so called Molten-Salt Reactor (MSR) outperformed the LWR or the Pressurized Water Reactor (PWR) type by almost 20% (both being less costly than coal power without carbon tax).
Also keep in mind that we now have technologies that were unheard of 30 – 50 years ago. The digital technologies of today allow more accurate and careful design of the reactors themselves, but also facilitate entirely new ways of collaboration. In the past, a nuclear ship would have to be completely self-sustained in terms of crew and their competence. Obviously, recruiting enough nuclear trained personnel to operate a nuclear ship, is a major task. Today, however, remote operation technologies enable a control center on land to handle multiple ships if something comes up that is outside the scope of the crew competence. Furthermore, modern manufacturing enables more effective production of most components, further cutting costs.
Thus, it is fair to say that the early, nuclear movers in merchant shipping were basically too early. Today, however, the time is right.
Why nuclear will work today
With the climate crisis now upon us, I think nuclear will have to be part of the solution. Machiavelli once said that “necessity is the mother of invention”. The need is here, and the time is now.
The technology is now almost ready, and why wait to cut costs tomorrow when we can start today? Sure, some development remains, and some early movers are taking more risks than others. This is normal for all innovation regardless of industry. The most important is to realize that ramping up a new industry typically takes a generation. Therefore, perhaps it will take a couple of decades before the HFO will be displaced by the nuclear propulsion systems. All nuclear technology takes time to achieve approval and operating licenses, and construction capacity and upskilling will also take a long time. All the more reason to start now.
Clearly, solving the fuel challenge for shipping takes time, but it is not that far into the future. It can come faster if we make the right decisions early and have enough funding to sustain the work, but it can also be delayed – like all innovation work – if mistakes are made and funding dries up. One thing is sure, if we succeed the potential is vast both in cutting emissions and solving the energy security issues, but also economically.
Like the late Ray Anderson, Chairman of President Clinton’s Sustainability Council, said; “I want to do well by doing good”. Sure, subsidies are probably needed initially, but to secure an energy transition we need something that is objectively better than the old solution, and modern nuclear has this potential.”
Financial Result
CBL International gross profit down 32.2% on year for 1H 2024
Decline primarily driven by reduction in premium sold to customers; leading to lower gross profit per tonne even though there was an increase in volume sold, says CBL.
Published
2 days agoon
September 13, 2024By
AdminCBL International Limited (CBL), the listing vehicle of Banle Group (Banle), a marine fuel logistic company in the Asia-Pacific region, on Thursday (12 September) announced its unaudited financial results for the six months ended 30 June.
CBL said its gross profit for the period was approximately USD 2.72 million, a decrease of 32.2% compared to USD 4.01 million for 1H 2023.
The firm said the decline was primarily driven by the reduction in premium sold to customers and led to lower gross profit per tonne, which was partially offset by an increase in volume sold.
CBL also reported its Consolidated revenue for 1H 2024 increased by 44.4% to approximately USD 277.23 million, compared to USD 191.96 million in the same period in 2023.
“This significant growth was driven by a 39.4% year-over-year increase in sales volume, attributed to the expansion of the Company's global supply network and higher marine fuel demand due to geopolitical factors,” it said.
The company announced the pricing of its initial public offering on Nasdaq Capital Market on 22 March last year.
“We are pleased with the robust growth in our revenue and sales volume during the first half of 2024, despite the challenging market conditions. Our strategic initiatives, including the expansion of our service network and our focus on sustainable fuel solutions, have positioned us well to navigate these challenges and capitalise on emerging opportunities,” said Teck Lim Chia, Chairman & CEO of Banle Group.
“While the current market environment has pressured our margins, we remain confident in our long-term strategy and our ability to deliver value to our shareholders.”
Other Financial Highlights:
- Operating Expenses: Operating expenses rose by 64.0% to approximately USD 4.12 million, up from USD 2.51 million in 1H 2023. This increase was attributed to higher selling and distribution expenses related to our sales growth, strategic expansion in the Company's supply network to new geographic areas, and the development of our biofuel operations.
- Net Income: The company reported a net loss of approximately USD 1.62 million, compared to a net income of USD 1.15 million in 1H 2023. The loss was driven by lower gross margin and higher operating costs.
- Cash Flow: Net cash provided by operating activities was approximately USD 2.30 million, a significant improvement from a cash outflow of USD 7.24 million in 1H 2023, reflecting better management of working capital.
- Cash position: As of June 30, 2024, Banle's consolidated cash balance increased by approximately USD 2.29 million, or 30.9%, to USD 9.69 million, compared to USD 7.40 million as of December 31, 2023. This increase was primarily driven by improved working capital management. The Company also reported a significant increase in accounts receivable and accounts payable balances, reflecting the growth in its sales activities.
Operational Highlights:
- Global Network Expansion: As of June 30, 2024, Banle expanded its global service network from 36 ports at our IPO in March 2023 to over 60 ports across Asia, Europe and Africa. This strategic expansion has enabled the Company to secure new bunkering business opportunities, particularly in European markets where environmental regulations are increasingly stringent. The opening of the Company's new office in Ireland in late 2023 has bolstered our market coverage and enhanced local sourcing capabilities. Notably, the Company completed inaugural bunkering services through a local physical supplier in Mauritius in May 2024, further strengthening our market presence.
- Biofuel Initiatives: Banle continued its commitment to sustainability by expanding its B24 biofuel operations, obtaining ISCC EU and ISCC Plus certifications in 2023. The Company successfully commenced biofuel bunkering services through local physical suppliers in Hong Kong, China, and Malaysia, positioning itself as a pioneer in sustainable fuel solutions. The B24 biofuel blend, which includes 24% UCOME (used cooking oil methyl ester), offers a 20% reduction in greenhouse gas emissions compared to conventional marine fuels, aligning with global decarbonisation efforts.
- Response to Macroeconomic Environment: The global economy has shown signs of moderate growth in 2024, with emerging markets, particularly in Asia, driving this recovery. However, the shipping industry continues to face challenges such as fluctuating freight rates, port congestion, and disruptions in major trade routes due to the ongoing Red Sea Crisis. Banle has proactively adapted to these conditions, coordinating increased fuel supplies in Asian ports to meet heightened demand, ensuring that our customers' needs are met despite logistical challenges.
Looking ahead, Banle said it remains focused on expanding its market presence, particularly in the biofuel sector, and continuing to enhance its global supply network.
Related: Banle Group achieves 70% increase in port coverage since Nasdaq listing
Related: Exclusive: Banle Group sets sights on expanding bunker supply network with successful IPO on Nasdaq
Related: Malaysia: Straits Energy associate CBL International to be listed on Nasdaq
Photo credit: Essow on Pexels
Published: 13 September, 2024
Alternative Fuels
KPI OceanConnect expands Asia footprint with new Tokyo office
New office will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative bunker fuels to tightening environmental regulations.
Published
2 days agoon
September 13, 2024By
AdminMarine energy solutions provider KPI OceanConnect on Thursday (12 September) announced the opening of its new office in Tokyo, Japan, to strengthen its regional presence and support to local customers.
The office is KPI OceanConnect’s fifth in Asia, reflecting an increasing commitment to strategic growth in the region.
Japan is a leading innovator in the maritime industry, operating the third largest merchant fleet and is an important market for KPI OceanConnect.
The new office, led by Ken Kobayashi, Head of Japan, will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative fuels to tightening environmental regulations.
The announcement follows KPI OceanConnect’s recent publication of robust financial results for the year 2023/2024 and demonstrates its continued commitment to investing in building strong partnerships across the marine fuels value chain worldwide.
The expansion of the local team in Japan will enable KPI OceanConnect to actively engage with Japanese buyers and suppliers on a daily basis to exchange knowledge and expertise to support the development of innovative energy transition strategies for its clients.
The launch of the new office was celebrated with an opening reception on 10 September. The event was attended by the group’s owner, Nina Østergaard Borris and the Executive Management team of KPI OceanConnect, including Anders Grønborg, CEO, Dorthe Bendtsen, COO, and Jesper Sørensen, Global Head of Alternative Fuels and Carbon Markets.
To celebrate this milestone, KPI OceanConnect hosted an opening reception at the XEX Tokyo restaurant, just steps away from its new office in the Burex building. The event also featured music by DJ Yumi.
Anders Grønborg, CEO of KPI OceanConnect, said: “KPI OceanConnect has worked closely with clients in Japan for a very long time. As a key market for our sector and our business, this new office allows us to be closer to our customers and other important local stakeholders.”
“It is a time of transformation in the maritime value chain, and we are ready to work with our partners to identify opportunities for further collaboration and innovative solutions. We believe that our values of decency, good governance, transparency and long-term sustainability resonate well in this market.”
Ken Kobayashi, Head of Japan, KPI OceanConnect, said: “KPI OceanConnect is here to support its clients in turning today’s challenges and future uncertainties into opportunities for growth and innovation. From new fuels to new regulations, our network of experts is focused on delivering tailored, value-adding services to clients to future-proof their decision making, no matter the complexity.
“With a partnership-driven approach, we’re enabling greater transparency and innovation and are helping rewrite the bunkering playbook to support clients through the energy transition.”
Photo credit: KPI OceanConnect
Published: 13 September, 2024
Alternative Fuels
European shipowners and bunker fuel producers launch Clean Maritime Fuels Platform
Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association, HydrogenEurope and Methanol Institute.
Published
2 days agoon
September 13, 2024By
AdminThe European Community Shipowners’ Associations (ECSA) on Thursday (12 September) announced the launch of the Clean Maritime Fuels Platform.
The new Clean Maritime Fuels Platform is a bottom-up industry initiative aiming to enhance communication between the shipping sector and fuel producers and to identify common challenges and possible solutions, considering the implementation of the Fit for 55 package and the transition to a net-zero economy by 2050.
Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association (EWABA), HydrogenEurope and Methanol Institute.
According to ESCA, access to clean maritime fuels is a top priority for the decarbonisation of the shipping sector.
The recently published Draghi report on the Future of European Competitiveness identifies shipping as one of the most difficult sectors to decarbonise, requiring around 40 billion in annual investments between 2031 and 2050.
The report highlighted that, while the EU is a world leader in sustainable renewable and low-carbon fuels for the decarbonisation of transport, it has limited installed capacity and planned production. The EU needs to start building a supply chain for clean fuels, or the costs of meeting its targets will be significant.
Representatives of ECSA, FuelsEurope, eFuel Alliance, EWABA, HydrogenEurope and Methanol Institute held their first meeting on 12 September and agreed on the objectives and the working principles of the new platform. Members also started to discuss the key topic of infrastructure gaps.
The platform will focus on policies and tools to support the production and uptake of clean maritime fuels in Europe including areas such as maritime in EU ETS and funding opportunities.
The platform will hold regular meetings with ECSA taking care of the secretariat’s tasks.
“Today, the shipping and energy industry join forces and launch a dialogue platform that can facilitate better flow of information about the common challenges we are facing. We need all hands on deck to make the energy transition happen. In order to meet our targets, we need clean fuels available in the market in sufficient quantities and at an affordable price. European shipowners are proud to launch with the fuel producers the Clean Maritime Fuels Platform”, said Sotiris Raptis, ECSA Secretary General.
“We are very excited to launch the Clean Maritime Fuels Platform today. Our 55+ members from across the EU are working tirelessly to produce waste-based and advanced biodiesel of the highest quality requirements and GHG savings to bring a new era of clean shipping to Europe. We believe that a closer collaboration between renewable fuel suppliers and ship owners will significantly reduce technical, operational, and financial barriers across the supply chain for the development and uptake of renewable maritime fuels”, said Angel Alvarez Alberdi, Secretary General of EWABA.
“The energy transition is a gradual journey, not an overnight change. It demands a robust regulatory framework and collaboration among all stakeholders involved to drive effective decarbonization. As we work alongside our 100 members through the complexities of this transition, the Clean Fuels Maritime Platform will play a crucial role in accelerating our shift to cleaner fuels and innovative technologies. By combining our collective expertise and efforts, we are not only tackling the pressing need for emission reductions but also laying the groundwork for a more resilient and sustainable maritime industry”, said Greg Dolan, CEO of Methanol Institute.
Photo credit: European Community Shipowners’ Associations
Published: 13 September, 2024
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