Dr. Prabath Weerasinghe, a Senior Lecturer of the Department of Electrical and Information Engineering Faculty of Engineering at University of Ruhuna, shared that analysts predict the country can generate about USD 5 billion annually from bunker fuel operations by 2030 with a focused investment and improvements to Jaya Container Oil Bank Terminal (JCT Oil Bank):

Sri Lanka, strategically positioned on one of the busiest maritime routes in the world, holds immense potential to become a leading regional bunkering hub. Experts suggest that with targeted infrastructure upgrades and strategic policy initiatives, the country can generate nearly USD 5 billion annually from bunker fuel operations by 2030. The key lies in revitalising the Jaya Container Oil Bank Terminal (JCT Oil Bank) to match regional standards and meet the growing global demand for efficient bunkering services.

The Jaya Container Oil Bank Terminal, once seen as a critical asset for Sri Lanka’s maritime economy, has faced years of neglect, underutilisation, and inadequate capacity expansion. Despite its strategic location adjacent to the busy Port of Colombo, the terminal operates well below its potential. Competitors like Singapore, Fujairah, and Indian ports have surged ahead, offering large-scale fuel storage facilities, efficient refuelling systems, and world-class operational infrastructure.

The lack of consistent investment, outdated technology, and limited storage capacity at JCT Oil Bank has deterred major shipping lines and bunker operators from considering Sri Lanka as their preferred choice for refuelling.

The USD 5 Billion Vision

With global shipping volumes projected to grow steadily, the demand for bunker fuel is expected to rise exponentially. Analysts predict that with focused investment in the JCT Oil Bank Terminal, Sri Lanka could capture a significant share of the Indian Ocean bunkering market, generating approximately USD 5 billion annually by 2030.

Key improvements required to achieve this goal include:

• Increased Storage Capacity: Expanding storage facilities to accommodate both conventional and sustainable fuels like LNG and biofuels.
• Enhanced Distribution Networks: Modernising fuel delivery systems to reduce refuelling times and increase efficiency.
• Policy and Regulatory Clarity: A transparent and investor-friendly policy framework to attract global players.
• Technological Upgrades: Adoption of digital systems to streamline inventory management and improve transaction transparency.

Regional Competition: The Need for Urgency

Regional competitors like Singapore have set benchmarks in bunker fuel supply, handling nearly 50 million metric tons of bunker fuel annually. Ports in India, UAE, and Malaysia are also scaling up their bunkering capacities with substantial government backing. If Sri Lanka delays infrastructure upgrades, it risks losing market share to these emerging competitors.

Government and Private Sector Collaboration

Achieving this ambitious target requires strong collaboration between the government and private sector stakeholders. Private investment in storage infrastructure, technology integration, and distribution systems will play a crucial role. Simultaneously, the Sri Lanka Ports Authority (SLPA) must ensure that red tape is minimised, and strategic policies are implemented effectively.

The International Maritime Organisation (IMO) has set strict emission targets for the shipping industry. As a result, the demand for clean fuels like LNG, biofuels, and green ammonia is expected to rise significantly. If Sri Lanka can position the JCT Oil Bank Terminal as a hub for sustainable fuel distribution, it will secure a long-term competitive advantage in the global bunkering market.

The Roadmap to 2030

• Short-term (2024-2026): Immediate expansion of storage capacity and improvement of refuelling facilities.
• Medium-term (2026-2028): Adoption of advanced technologies and digital systems for seamless operations.
• Long-term (2028-2030): Integration of sustainable fuel infrastructure and establishment of global partnerships.

Sri Lanka stands at a critical juncture. The Jaya Container Oil Bank Terminal is not just a piece of infrastructure—it represents a multi-billion-dollar economic opportunity. With the right mix of policy direction, strategic investment, and sustainable practices, Sri Lanka can re-establish itself as a leading bunkering hub in the Indian Ocean.

If the government prioritises the revival and expansion of the terminal, the country could unlock an annual revenue stream of USD 5 billion by 2030, boosting foreign exchange reserves, creating employment opportunities, and driving long-term economic stability. The time to act is now—delays will only allow regional competitors to widen the gap further.

Photo credit: Chathura Anuradha Subasinghe on Unsplash
Published: 9 January, 2025

Clarksons Research on Friday (3 January) released their latest Green Technology Tracker, including full year 2024 data points, charting the progress of alternative bunker fuel uptake and investments in energy saving technologies across the global shipping fleet. 

Summarising the latest Tracker, Steve Gordon, Global Head of Clarksons Research, commented: “With overall newbuild order volumes reaching their highest level since 2007, alternative fuel has continued to play a prominent role representing 50% of all tonnage ordered in 2024.

Across 2024, we have reported 820 vessels ordered of 62.2m GT involving alternative fuel capability (727 orders of 52.1m GT excluding LNG Carriers), a record level of investment.

There has been a return to LNG dual fuel technology dominating (accounting for 70% of alternative fuelled tonnage ordered excluding LNG Carriers, up from 43% in 2023, with methanol declining to 14% share from 30%). Overall, we have reported orders for vessels capable of using either LNG (390 orders, 297 excluding LNG Carriers), methanol (118 orders), ammonia (25 orders), LPG (72 orders) or Hydrogen (12 orders).

Additionally orders involving “ready” status have increased to around a fifth of all orders (452 orders, 21% of tonnage ordered). Across the fuel types, ammonia and methanol have been prominent as alternative fuel “ready” choices (ammonia: 130 orders, methanol: 320).

Outside vessel segments that can utilise cargo (100% of LNG Carrier tonnage ordered in 2024 was LNG dual fuel capable, VLGC/VLAC/VLEC: 90% LPG/ethane/ammonia dual fuel), the 12,000+ TEU Containership segment (71% LNG, 17% methanol) and Car Carriers (78% LNG, 21% methanol) had the highest levels of alternative fuel order adoption in 2024. Meanwhile, the lowest share of alternative fuel uptake in 2024 came in sectors such as Ultramaxes (4%), Handysize (4%) and MR Tankers (1%).  

With the confirmed orderbook (~50% of orderbook tonnage is today alternative fuelled) and projected investment in the coming years, we forecast that over a fifth of all fleet capacity will be alternative fuel capable by 2030 (2017: 2% of fleet capacity “on the water”, 2024:  8%, 2030(f): >20%).

Investments in port infrastructure and the availability of “green” fuels continue to lag, with our Green Technology Tracker detailing 276 ports with LNG bunkering and 275 ports with shore power connection in place or planned but only 35 ports with methanol bunkering available and planned.

With an ageing fleet (13.1 years on a GT weighted basis, up from a low of 9.7 years in 2013), around on third of fleet capacity rating D or E under CII last year and lengthening lead times (~3.7 years) at major shipyards, retrofitting of Energy Saving Technologies (ESTs) remains a crucial part of shipping’s decarbonisation pathway. 

Significant Energy Saving Technologies (ESTs) have been fitted on over 10,360 ships, accounting for >37% of fleet tonnage: this includes propeller ducts, rudder bulbs, Flettner rotors, wind kites, air lubrication systems and others (>580 ships with air lubrication system and >145 units involving “wind” assistance in the fleet and orderbook). Our tracker also includes 37 vessels in the fleet (plus 12 newbuild orders) testing onboard carbon capture technology. And the share of fleet that is fitted with an “Eco” engine has risen to over 34%.

We now estimate that shipping’s global GHG emissions will have increased by ~4% y-o-y in 2024 to over 1 billion tonnes of CO2e on a WTW basis and have moved above pre Covid-19 levels, with a higher proportion of time being spent at sea (amid Red Sea re-routing), some increases in speed (especially in the container market, albeit we project the underlying long term trend for declining speed will continue) and trade growth offsetting the growing share of alternative fuelled vessels, “eco” ships and tonnage with ESTs.”

Photo credit: Venti Views on Unsplash
Published: 6 January, 2025

Shipowners continued to invest for a future of lower emissions in 2024, with 600 vessels capable of using alternative fuels ordered until 13 December, according to classification society Lloyd’s Register (LR) on Thursday (2 January). 

The new orders grew the total orderbook by more than 50%, to 1,737 vessels.

The in-service alternative-fuelled fleet also grew strongly, up 18% to 1,860 vessels. Combined with current orders, the fleet will stand at 3,597 – around 4.8% of all vessels in service and on order. 

But with the IMO’s 2030 target on zero and near-zero emission energy use crossing the five-year horizon, orders will need to accelerate further to meet the required 5-10% of shipping’s energy consumption.

“These numbers show the significant effort the industry is making to reach net-zero emissions,” said James Frew, Business Advisory Director, at LR. 

“As the maritime transition towards decarbonisation advances, the next steps will require greater alignment between industry ambitions, regulatory measures and, crucially, incentives to rapidly grow global production capacity for the alternative fuels shipping will need.” 

Methanol-fuelled vessels led the way amongst new fuels, with 119 orders adding more than a third to the existing orderbook. In early 2024 LR, which classed the very first methanol conversion in 2015 – the ro-pax Stena Germanica – was appointed to support and class Stena Line’s next two fast ferry conversions. 

It also teamed up with Danish alternative fuel specialist Green Marine to deliver training and consultancy around methanol fuel, helping to deliver the skills needed to make alternative-fuelled vessel operation a reality.

Ammonia-fuelled vessel orders more than doubled compared to the previous year, to 22 vessels. In 2025 the first ammonia-fuelled marine engines will be delivered, with a further surge in orders likely as the industry gains experience with the carbon-free fuel. 

As illustrated in LR’s Fuel For Thought report on ammonia published in March 2024, securing the safety of ammonia-fuelled ships through design, training and regulation will be crucial to maximise any opportunity for decarbonisation.

Hydrogen fuel also consolidated its appeal within relevant vessel segments, with orders for 12 more vessels in 2024. Two hydrogen-powered passenger ferries ordered by Norwegian transport company Torghatten Nord are set for LR class, while a memorandum of understanding with H2Terminals, HiDROGEN and D3IM was signed to assess the feasibility of a green hydrogen infrastructure project in the UK. LR also granted AiPs for several new hydrogen vessels, including ferries and tugboats.

Related: LR: Safety and supply crucial for widespread adoption of ammonia bunker fuel
Related: LR report sees surge in methanol engine retrofits in 2023, calls it a ‘defining trend’

Photo credit: william william on Unsplash
Published: 3 January, 2025