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GCMD-led consortium to establish supply chain of green marine fuels

With 18 industry partners including BHP Singapore, this pilot will help to shape national and international standards of biofuels bunkering, amongst others.

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GCMD-led consortium to establish supply chain of green marine fuels

The Global Centre for Maritime Decarbonisation (GCMD) on Tuesday (26 July) said it is leading a consortium of 18 industry partners to launch a drop-in biofuels pilot project with a combined contribution of USD 18 million in cash and in-kind to establish an assurance framework for ensuring the supply chain integrity of current and future green marine fuels, bringing genuine benefits to end-users and the climate.

On the launch of this pilot project Professor Lynn Loo, CEO of GCMD, said: “GCMD is leading this route-based pilot to help align stakeholders in the supply chain for the adoption of biofuels. By facilitating and creating an optimised drop-in green fuels supply chain, this pilot will help to shape national and international standards of biofuels bunkering and lower the barrier for their wider adoption to reduce greenhouse gas (GHG) emissions from a lifecycle perspective. In curating and executing this first-of-its-kind drop-in biofuels pilot, GCMD is positioned to address stakeholder pain points in the complexities of the supply chain of green marine fuels in a meaningful way.”

Addressing the gap for the maritime industry

To meet the International Maritime Organisation’s (IMO) 2030 and 2050 decarbonisation targets, shipowners as well as cargo owners and charterers are exploring the purchase and use of green bunker fuels. Biofuels can be a near-term measure to reduce GHG emissions as they are available today, and they can be deployed in the same way as marine fuels with minimal changes to the existing distribution infrastructure, shipboard technologies, and operational norms of ships. However, there is no industry-wide assurance framework that addresses concerns on the quantity, quality and GHG emissions abatement of biofuels, nor one that safeguards their premium and value. 

To address this gap, the GCMD-led pilot aims to establish an assurance framework that ensures supply chain transparency of drop-in biofuels, whose applicability can be extended to future drop-in fuels, such as bio-LNG, biomethanol and green ammonia, when they become available in meaningful quantities.

Recent IMO decisions to eliminate the need to apply for waivers for using fuel blends with up to 30% biofuels (B30) for propulsion, and to allow the use of B30 in accordance with MARPOL Annex VI, have lowered regulatory hurdles for adopting biofuels. To this end, the assurance framework that will be the outcome of this pilot will increase stakeholder confidence in the full value of the premium paid for such green fuels, and further lower the barrier to wider adoption of biofuels in the maritime industry by addressing concerns on the integrity of the biofuels supply chain.

The vessels in this pilot are all equipped with MAN ES’s two-stroke engines. In response to participating in this pilot, Bjarne Foldager, Senior Vice President and head of Two Stroke Business, said: “This is a very important initiative by GCMD, and we are honoured to contribute. At MAN Energy Solutions we believe several solutions are required to decarbonise shipping, however all solutions needs to be verified and their scalability tested. This is best done in partnerships aligning the various actors in projects like this where we can share knowledge and build transition strategies together.”

Supporting the green corridors framework

GCMD is undertaking a bottom-up approach by convening like-minded partners across the maritime industry to participate in this pilot. Altogether, the ship owners, charterers and operators participating in this pilot project represent approximately 2,300 vessels across the container, tanker and bulker segments, and are responsible for transporting 8.4 million TEUs or 80.6 million DWT globally. With 12 vessels bunkering at three ports across three continents, the learnings from these route-based pilots will support the green corridors framework that was put forth by the Clydebank Declaration at COP26 in October 2021, of which 24 states are signatories including Singapore, the Netherlands and the US where bunkering ports for this pilot project reside.

Targeting the complex supply chain of green fuels

A first-of-its-kind in extent and complexity, the pilot aims to optimise the entire supply chain of bunker fuels by building on the learnings of past shipboard trials involving biofuels. Designed through the lens of the shipowner, piloting will start with fuel blends involving existing biofuels, such as hydrotreated vegetable oil (HVO) and fatty acid methyl esters (FAME) blended with either very low sulphur fuel oil (VLSFO), high-sulphur fuel oil (HSFO) or marine gas oil (MGO) in blends up to 30% biofuels (B30).

“There are so many good elements in this pilot,” said Unni Einemo, Director of the International Bunker Industry Association (IBIA)

“A variety of biofuels and biofuel blends have already been successfully tested, but this comprehensive pilot can help address remaining uncertainties about how these fuels work in practice by getting extensive enduser operational experiences with products involving FAME and HVO, and hopefully also crude algae oil.”

Using BunkerTrace’s digital and synthetic DNA tracing products to track marine fuels from production to vessel propulsion, the pilot will validate the authenticity of sustainable biofuels through molecular verification tests conducted on fuel samples that are collected at numerous identified points along the supply chain. Hence, the pilot will address traceability of drop-in biofuels from production, distribution, transportation, storage, and bunkering to shipboard application, providing end-to-end supply chain transparency.

Einemo continued: “The tracing element in this pilot is also really exciting. Biofuels have the potential to help the existing fleet meet IMO’s GHG reduction targets by taking lifecycle emissions into account, but one of the challenges will be certification of product origin as the sustainability of biofuels can vary significantly depending on production pathways. Biofuels can be blends coming from feedstock with different sustainability profiles, so it will be interesting to see if the DNA tracing will show mainly single-source origin products or biofuels of multiple origins. This could give us some really useful insights into the complexities of documenting the full supply chain of fuels, which will become increasingly important.”

Testing laboratories will play a crucial role in evaluating the biofuels and biofuel blends. Strategically located in Singapore, the world’s largest bunkering hub and second largest container port, GCMD also participates in the work of the Singapore Standards Council’s Chemical Standards Committee (CSC) in developing national standards for the bunkering industry. 

On this GCMD pilot, Capt. Rahul Choudhuri, Chairman of the CSC’s Technical Committee for Bunkering (Ambient Liquid Fuels), said: “GCMD’s project scope involves a detailed quality assessment of biofuels, including ascertaining their shelf life and long-term stability. As such, the involvement of global laboratory services companies in this project will provide such information that will strengthen the efforts of the Technical Committee’s Working Group on Marine Fuel Specifications and contribute to developing acceptable industry standards and practices for the use of biofuels in Singapore and eventually elsewhere.”

Adding to the pilot’s complexity is coordinating the sailing schedules of participating vessels. The aggregation of demand for biofuels at ports will result in cost savings for shipowners and fuel purchases through optimised use of land-side storage facilities and bunkering vessels and facilitate assessments of GHG emissions abatement on a well-to-wake basis of individual vessels and across fleets. Furthermore, testing these fuel blends across the container, tanker and bulker segments travelling on fixed and tramp routes and bunkering at the ports of Singapore, Rotterdam, and Houston under business-as-usual conditions will demonstrate the compatibility and stability of these biofuels in actual operating environments, thereby strengthening the overall robustness of the assurance framework.

Calling for crude algae oil supply

In an effort to further accelerate biofuels adoption as a near-term measure to reduce GHG emissions, GCMD will be leveraging this project to be the first in trialling and assessing the use of crude algae oil (CAO) as a marine fuel. CAO is a third-generation biofuel that promises substantially reduced carbon footprint, but unlike HVO and FAME, its utility has not been tested nor its supply chain established. For this part of the pilot, GCMD has assembled fuel purchasers who are committed to trialling CAO, and is inviting CAO producers with existing commercial production capacities to participate by reaching out to [email protected] by 22 August. GCMD will link up CAO fuel producers with pre-identified fuel suppliers to test and provide CAO for this pilot on a commercial basis.

In the run-up to the launch of this pilot project, GCMD is finalising the agreement details with the 18 project partners. The pilot will commence on 1 August 2022, and is expected to take 12 to 18 months to complete. 

GCMD industry partners for this project are:

  • Anglo American
  • Astomos Energy Corporation
  • Boston Consulting Group
  • BHP Singapore Pte Limited
  • BunkerTrace Limited
  • Chevron Corporation
  • CMA CGM S.A.
  • Eastern Pacific Shipping Pte. Ltd.
  • Hapag-Lloyd AG
  • MAN Energy Solutions SE
  • Nippon Yusen Kabushiki Kaisha
  • Ocean Network Express Pte. Ltd.
  • Pacific International Lines (Pte) Ltd.
  • Saybolt (Singapore) Pte Ltd
  • Stena Bulk AB
  • Swire Bulk Pte. Ltd.
  • VG (Viswa Group)
  • VPS

 

Photo credit: Global Centre for Maritime Decarbonisation
Published: 26 July, 2022

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Methanol

Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Firm ordered a 65,700-dwt methanol dual-fuel dry bulk carrier with Tsuneishi Shipbuilding; MOL signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027.

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Kambara Kisen orders methanol dual-fuel bulker from Tsuneishi Shipbuilding

Japanese shipowner Kambara Kisen has ordered a 65,700-dwt methanol dual-fuel dry bulk carrier newbuilding from Tsuneishi Shipbuilding Co., Ltd, according to Mitsui O.S.K. Lines (MOL) on Wednesday (20 September).

MOL said it signed a basic agreement on time charter for the newbuilding that is slated to be delivered in 2027. 

The vessel will be designed to use e-methanol produced primarily by synthesising recovered CO2 and hydrogen produced using renewable energy sources, and bio-methanol derived from biogas. 

The vessel's design maximises cargo space while ensuring sufficient methanol tank capacity set to allow the required navigational distance assuming various routes, at the same time maximising cargo space. 

MOL added the vessel is expected to serve mainly in the transport of biomass fuels from the east coast of North America to Europe and the U.K. and within the Pacific region, as well as grain from the east coast of South America and the U.S. Gulf Coast to Europe and the Far East.

Details on the time-charter contract:

Shipowner: Kambara Kisen wholly owned subsidiary
Charterer: MOL Drybulk Ltd.
Charter period 2027: -

Details on the newbuilding methanol dual fuel bulk carrier:

LOA: About 200 m
Breadth: About 32.25 m
Draft: About 13.80 m
Deadweight: About 65,700 MT
Hold capacity: About 81,500m3
Shipyard: Tsuneishi Shipbuilding Co., Ltd.

Photo credit: Mitsui O.S.K. Lines
Published: 22 September, 2023

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Methanol

Argus Media: Alternatives may drive methanol market growth

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand, according to Argus.

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RESIZED Argus media

The growth of sustainable alternatives to traditional methanol production sources likely will shape the market over the next several years, industry leaders said this week at the Argus Methanol Forum.

20 September 

Driven by low-carbon policies and regulations, the transportation sector — especially the marine fuels industry — could be a source of heightened demand.

"The aim is to be net zero by 2050 but [those solutions are] expensive today and one of the main challenges to build e-methanol or bio-methanol plants is a huge queue for these pieces of equipment that aren't available," Anita Gajadhar, executive director for Swiss-based methanol producer Proman, said.

Bio-based and e-methanol plants of commercial scale, like Proman's natural gas-fed 1.9 million metric tonne/yr M5000 plant in Trinidad and Tobago, are not ready today.

"But that's not to say 10 years from now they won't be there," Gajadhar added.

Smaller projects are popping up. Dutch fuels and gas supplier OCI Global announced plans last week to double the green methanol capacity at its Beaumont, Texas, facility to 400,000 t/yr and will add e-methanol to production for the first time. Production will use feedstocks such as renewable natural gas (RNG), green hydrogen and biogas.

The globally oversupplied methanol market will not get any major supply additions starting in 2024 until 2027. But that oversupply will not last long, Gajadhar said.

Global demand has slowed this year, driven by stagnate economic growth and higher interest rates, according to industry observers.

As much as half of methanol demand is tied to GDP growth, with total methanol demand estimates at 88.9mn t globally in 2023. This is essentially flat from 2022, but up from 88.3m t in 2021 and 87.7mn t in 2020, Dave McCaskill, vice-president of methanol and derivatives for Argus Media's consulting service, said.

Demand is not expected to rebound to 2019 levels of 89.6mn t until 2024 or 2025, he added.

The period of oversupply combined with lackluster demand places methanol in a transition period, Gajadhar said, which opens the door for sustainable feedstock alternatives to shape market growth.

Danish container shipping giant Maersk and French marine logistics company CMA-CGM announced earlier this week a partnership to drive decarbonization in shipping. The partnership seeks to develop fuel and operations standards for bunkering with alternative fuels. The companies will develop net-zero solutions, including new technology and alternative fuels.

Maersk has previously ordered dual-fuel methanol-powered vessels and CMA-CGM LNG-propelled vessels.

The demand for alternative feedstock-derived fuels is there, but the ability to scale-up such production lags. Certified lower-carbon methanol produced using carbon capture and sequestration — also known as blue methanol— can ramp up much more quickly, according to Gajadhar.

By Steven McGinn

Photo credit and source: Argus Media
Published: 22 September, 2023

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Biofuel

Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Firm expanded its biofuel testing this summer in Europe to two additional ships — Royal Caribbean International’s “Symphony of the Seas” and Celebrity Cruises’ “Celebrity Apex”.

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Royal Caribbean completes over 12 weeks of bio bunker fuel testing in Europe

Royal Caribbean Group on Tuesday (19 September) said it successfully completed over 12 consecutive weeks of biofuel testing in Europe. 

Royal Caribbean International’s Symphony of the Seas became the first ship in the maritime industry to successfully test and use a biofuel blend in Barcelona to meet part of her fuel needs. 

The company confirmed onboard technical systems met operational standards, without quality or safety concerns, demonstrating the biofuel blend is a reliable “drop in” supply of lower emission energy that ships can use to set sail across Europe and beyond. 

The tests across Europe also provided valuable data to understand the availability and scalability of biofuel in the region, the firm added. 

Jason Liberty, president and CEO, Royal Caribbean Group, said: “This is a pivotal moment for Royal Caribbean Group’s alternative fuel journey.”

“Following our successful trial of biofuels this summer, we are one step closer to bringing our vision for net-zero cruising to life. As we strive to protect and promote the vibrant oceans we sail, we are determined to accelerate innovation and improve how we deliver vacation experiences responsibly.”

President of the Port of Barcelona, Lluís Salvadó, said: “Royal Caribbean’s success is a clear example of how commitment to innovation makes possible the development of solutions to decarbonise the maritime sector.”

“In this case, it involves the cruise sector and focuses on biofuels, an area in which the Port of Barcelona is already working to become an energy hub, producing and supplying zero carbon fuels, such as green hydrogen and ammonia, and of other almost zero-carbon alternative fuels, such as methanol, biofuels or synthetic fuels. Innovation and collaboration between ports and shipping companies is key to accelerate the decarbonisation of maritime transport.”

The company began testing biofuels last year and expanded the trail this summer in Europe to two additional ships — Royal Caribbean International’s Symphony of the Seas and Celebrity Cruises’ Celebrity Apex

The sustainable biofuel blends tested were produced by purifying renewable raw materials like waste oils and fats and combining them with fuel oil to create an alternative fuel that is cleaner and more sustainable. The biofuel blends tested are accredited by International Sustainability and Carbon Certification (ISCC), a globally recognized organization that ensures sustainability of biofuels and verifies reductions of related emissions.

With Symphony of the Seas departing from the Port of Barcelona and Celebrity Apex departing from the Port of Rotterdam, both ships accomplished multiple sailings using biofuel and contributed critical data on the fuel’s capabilities. 

“These results will help accelerate Royal Caribbean Group’s plans to continue testing the use of different types of biofuels on upcoming European sailings this fall. The company is exploring strategic partnerships with suppliers and ports to ensure the availability of biofuel and infrastructures to advance the maritime energy transition,” the firm said. 

Photo credit: Royal Caribbean Group 
Published: 22 September, 2023

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