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IBIA: Historic day as IMO adopts revised GHG Strategy

IBIA called for regulations that will encourage investments in alternative bunker fuels and technologies that will reduce GHG on a well-to-wake basis at MPEC 80.

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The International Bunker Industry Association (IBIA) on Friday (7 July) released an article on the Marine Environment Protection Committee adopting the IMO’s Revised GHG Strategy:

There was standing ovation celebrating a historic moment at the IMO today as the Marine Environment Protection Committee adopted the IMO’s Revised GHG Strategy, setting out the ambitions for GHG emissions from international shipping to reach net-zero GHG emissions by or around 2050.

There will be a lot to unpack from MEPC 80 and we’ll provide more detail next week, but here are some highlights:

  • The 2023 IMO GHG Strategy identifies levels of ambition for the international shipping sector noting that technological innovation and the global introduction and availability of zero or near-zero GHG emission technologies, fuels and/or energy sources for international shipping will be integral to achieving the overall level of ambition.
  • The levels of ambition and indicative checkpoints should take into account the well-to-wake GHG emissions of marine fuels as addressed in the Guidelines on lifecycle GHG intensity of marine fuels (LCA guidelines) developed by the Organization1 with the overall objective of reducing GHG emissions within the boundaries of the energy system of international shipping and preventing a shift of emissions to other sectors.

Within the levels of ambition there are several new elements, including:

  • Uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to increase uptake of zero or near-zero GHG emission technologies, fuels and/or energy sources to represent at least 5%, striving for 10%, of the energy used by international shipping by 2030; and
  • Indicative checkpoints to reach net-zero GHG emissions from international shipping have been set to:
  1. reduce the total annual GHG emissions from international shipping by at least 20%, striving for 30%, by 2030, compared to 2008; and
  2. to reduce the total annual GHG emissions from international shipping by at least 70%, striving for 80%, by 2040, compared to 2008.

IBIA is proud to have played a positive role at the IMO and the contributions we have made to the negotiations leading up the IMO’s revised GHG Strategy during two intense weeks of negotiations.

We called for regulations that will encourage investments in alternative fuels and technologies that will reduce GHG on a well-to-wake basis.

We sought clarification on the role of certified sustainable biofuels as a way to improve a ship’s CII rating while we wait for the IMO’s LCA Guidelines to provide a comprehensive method to account for well-to-wake GHG emissions. We now have a circular that sets out interim guidance on the use of biofuels that gives us that clarity.

We brought information on the potential of Ship Board Carbon Capture (SBCC) as a viable option to expedite the reduction of total shipboard CO2 emissions. That work will be taken forward at future GHG discussions at the IMO

We voiced support for the inclusion in the levels of ambition of a minimum requirement for at least 5% of fuels used by international shipping to have zero or near-zero GHG emissions on a life-cycle assessment basis by 2030, to give the starting signal for the phasing in of low and zero emission solutions long before 2050.

The energy transition will take time, hence the IMO’s long-term GHG emission reduction target must be supported by policies that will guarantee steady growth in the uptake of low and zero GHG emission fuels and technologies.

There is much work ahead to decide on the exact nature of the policy tools that will support the GHG reduction targets. It was not possible to narrow down the various proposals and get consensus on that yet, but they will include the phasing in of a marine fuel GHG intensity standard, and some form of a GHG emission pricing mechanism. The aim is to make a final decision on these elements at MEPC 81.

 

Photo credit: IBIA
Published: 10 July, 2023

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Methanol

China: CHIMBUSCO Jiangsu completes methanol bunkering operation in Taizhou

Firm successfully delivered 79.5 metric tonnes of methanol bunker fuel to container ship “NCL VESTLAND” using a mobile methanol bunkering skid at Taizhou Sanfu Marine Engineering.

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China: CHIMBUSCO Jiangsu completes methanol bunkering operation in Taizhou

CHIMBUSCO Jiangsu on Tuesday (3 December) said it successfully refuelled the new methanol dual-fuel powered 1,300TEU container ship NCL VESTLAND at Taizhou Sanfu Marine Engineering.

The total amount of methanol bunker fuel delivered to the boxship was 79.5 metric tonnes.

CHIMBUSCO Jiangsu said the implementation of bunkering operation marked a major breakthrough for the company in the application of alternative fuels for ships, marking its ability to supply methanol marine fuel to ships on a regular basis.

A mobile methanol bunkering skid jointly developed by CHIMBUSCO Jiangsu and COSCO (Lianyungang) Liquid Loading & Unloading Equipment was used for the bunkering operation, which was successfully completed in 2.5 hours. 

In a separate statement, COSCO Shipping said the bunkering operation represented CHIMBUSCO Jiangsu’s first marine methanol fuel supply onshore.

The mobile methanol filling skid operates using the pump as its power source to facilitate simultaneous unloading and refuelling tasks. 

This skid includes several key functional modules, each of which is highly integrated. This integration ensures a safe and efficient process for transferring methanol fuel from tankers to a vessel’s fuel bunker, while also enabling seamless operation and intelligent management. 

The mobile methanol filling skid offers flexibility, requires low initial investment, and boasts a rapid bunkering rate of 180 cubic metres (m3) per hour. 

It stands as an optimal solution for methanol bunkering in the era before widespread adoption of methanol bunkering vessels. Additionally, it can provide bunkering support for shipyards to test new vessels and meet the bunkering requirements of the shipyard,” it added. 

 

Photo credit: CHIMBUSCO Jiangsu
Published: 6 December, 2024

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LNG Bunkering

SEA-LNG: Invest more in LNG bunker vessels, supply and liquefaction infrastructure

LNG bunker market, while growing substantially, is lagging and concerns persist regarding the ability to supply the rapidly growing fleet of LNG-fuelled vessels.

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SEA-LNG: Invest more in LNG bunker vessels, supply and liquefaction infrastructure

Industry coalition SEA-LNG on Thursday (5 December) said that while the approximately 2,200 LNG-fuelled vessels and LNG carriers represent only ‘two minutes into the hour’ of the global fleet of approximately 60,000 deep sea vessels, it remains an adolescent fuel that is maturing significantly faster than other alternative bunker fuels. 

However, it said the LNG pathway still needs more investment, especially in landside facilities for liquefaction near ports, bio and synthetic methane production and bunkering capacity worldwide.

This year has witnessed unprecedented investment in the maturing and scaling of LNG from ship owners.  LNG is starting to dominate as the preferred future fuel pathway. 

However, the bunker market, while growing substantially, is lagging and concerns persist regarding the ability to supply the rapidly growing fleet of LNG-fuelled vessels.

Peter Keller, Chairman, SEA-LNG, said: “With high profile owners now choosing the LNG pathway, we anticipate this trend will continue and accelerate through 2025 and beyond.”

“As the various alternative fuel pathways mature, there is a growing realisation that, despite previous aspirations, some alternative fuel pathways – like the LNG pathway – are more practical and realistic than others.”

“While investment in newbuild LNG-fuelled ships is robust, we need to see the same for bunker vessels, supply and liquefaction infrastructure. As the LNG pathway continues to mature and the use of liquefied biomethane and eventually e-methane increases, the delivery of the fuel to vessels must be assured and the investment gap closed.”

Keller added: “There are approximately 60,000 deep sea ships on the water and, today, we’re looking at around 600 LNG capable ships afloat with a further 600 on order. There are another 1,000 LNG cargo carriers and bunker vessels of varying sizes.”

“While that’s a small percentage of the global fleet, as the clock ticks towards shipping’s emissions reduction targets, the LNG pathway is maturing far faster than other alternative fuels.”

According to DNV there are currently 54 methanol vessels and 2 ammonia vessels on the water.

There are aspects of LNG usage that are fully mature – safety for one. LNG is easy to transport, poses minimal, if any, risk to marine environments, has a low flammability range and is non-toxic. Effective regulations, standards and guidelines for safe operations are widespread, and LNG has been shipped around the world for almost 60 years without any major incidents at sea or in ports.

Keller continued: “When compared to traditional fuels, LNG is more of a teenager with all the growing pains, challenges and victories associated with adolescence.”

“But it is maturing all the time as the market continues to grow, new build orders continue to rise, and the LNG pathway with biomethane and eventually e-methane produced from renewable hydrogen, gains acceptance globally.”

“Shipping stakeholders are investing in LNG because it provides a low risk, incremental pathway for decarbonisation, starting now.  The other alternative fuels are basically toddlers by comparison.  And when it comes to safety, some are mere newborns!”

Another critical need in the maturing process during a period of increased regulation of carbon emissions is the adoption of standardised chain of custody models on a worldwide basis. 

Chain of custody models are becoming increasingly important to maritime decarbonisation as they provide mechanisms to verify that the fuels used are low carbon. 

Such verification creates investor confidence in new fuel supply chains and accelerates the transition to low-carbon fuels, enabling early adoption in conditions of limited supply. 

“They will create a market for green fuels by connecting buyers to fuel producers away from bunker ports enabling faster scaling and providing flexibility to shipping companies at lower cost,” SEA-LNG added.

 

Photo credit: SEA-LNG
Published: 6 December, 2024

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Alternative Fuels

GAC: Does Sweden’s alternative fuel development risk worsening a maritime Catch-22?

GAC Sweden’s Nils Igelström says Sweden faces having a surplus of renewable fuel options with limited access to wider European market; collaboration and clarity is needed to prevent stalling in shipping’s energy transition.

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GAC: Does Sweden’s alternative fuel development risk worsening a maritime Catch-22?

Sweden leads Europe in developing alternative fuels, driven by its 2045 net-zero emissions target and the IMO’s 2050 decarbonisation goal, and it is now making bold advances in renewable fuel options for commercial shipping. 

It is also investing heavily in infrastructure to support the development of biofuels, liquefied biogas and natural gas, and synthetic fuels like eMethanol. Many of these projects, although relatively nascent, showcase the country’s bold vision to lead the alternative fuel development pack.

Groundbreaking

In May 2023, Sweden broke ground on the FlagshipONE facility in Örnsköldsvik, targeting annual production levels of 50,000 tonnes of carbon-neutral eMethanol by combining carbon dioxide and green hydrogen for commercial shipping.

In February 2024, Jämtkraft AB launched NorthStarH2, with the goal of producing up to 100,000 tonnes of eMethanol each year to support Sweden’s green electricity supply and maritime needs.

But the development of alternative fuels goes beyond eMethanol. In August 2024, ScanOcean partnered with Vegoil to introduce a marine fuel derived from hydrotreated vegetable oil produced in Sweden. The tanker vessel Key Fjord successfully took on that product as bunker fuel at the Port of Oskarshamn, marking a step towards making biofuels commercially viable for maritime use.

Such developments highlight Sweden’s leadership in the development of greener fuel options for maritime use. But supply issues could put the brakes on by limiting their market reach.

Bunker fuels supply

The risk of oversupply

Shipping faces a ‘Catch-22’ scenario with alternative fuels: low adoption limits the infrastructure development while companies delay investing in newbuilds or retrofits until fuel supply chains expand. 

This production-market access disconnect risks oversupply in Sweden’s alternative fuel market, restricting access to the wider European maritime sector.

Nils Igelström, Managing Director at GAC Sweden, highlighted the challenge of balancing production and demand for renewable marine fuels: "Sweden is producing some of the most advanced renewable marine fuels, but cargo owners are unwilling to pay higher freight costs. Without buyers, the environmental benefits remain unrealised, stalling progress towards decarbonisation."

Despite interest from shipowners, low demand highlights the need for better market access. 

“Companies like Preem, lead the development of alternative fuels, but oversupply persists,” added Igelström. “With heavily investments in refineries and fuel development, these facilities will continue producing fuels regardless of current demand. However, the priority now is ensuring these fuels reach the market effectively.”

Nils Igelström Managing Director, GAC Sweden

Nils Igelström Managing Director, GAC Sweden

Beyond the Baltic

Supply chain bottlenecks of alternative fuels, including logistical challenges and limited port infrastructure in other parts of Europe, hinder the export of surplus alternative fuels and can lead to higher costs and regulatory complexities. This uneven distribution particularly affects vessels that do not have easy or regular access to the North and Baltic seas. 

“If a vessel calls at Gothenburg regularly, fuel supply isn’t an issue,” said Igelström. “But in areas lacking necessary infrastructure, accessing Sweden’s alternative fuel supplies is challenging. With availability limited to Sweden or Finland or Germany, shipping companies hesitate to invest in greener vessels without certainty of supply.” 

Igelström also emphasised the need to improve accessibility across Europe to encourage investments and support the maritime sector’s green transition. 

The cost factor

Logistical challenges raise costs, with bunkering accounting for up to 50% of a vessel’s daily operating costs. Greener alternatives, according to the World Economic Forum, can cost up to four times more than traditional heavy fuel oil. For an industry with tight margins and volatile freight rates, zero-emission shipping significantly increases the cost of goods. 

A study by Drewry estimated that switching to green methanol would increase fuel costs by 350%, equivalent to an additional US$1,000+ per 40 feet container shipped from Asia to Europe.

“There is a big price gap between renewables and fossil fuels. Exporting Sweden’s alternative fuels further increases costs, but that’s a necessary step to achieve shipping’s green potential,” Igelström said.

Collaboration and clarity

Shipping thrives on clarity, but gaps in regulatory goals, infrastructure, and environmental policies hinder the development of an effective green fuel supply chain.

“Shipping companies need certainty,” Igelström noted. “With tight margins, they can’t risk fuel unavailability, especially where delivery points are scarce. Collaboration across Europe is essential to build a uniform supply chain that ensures renewable-powered ships can operate globally. Policymakers, industry leaders, and international organisations must unite to create conditions for renewable fuels to succeed.”

Sweden is working with partners in Finland, Iceland and the Faroe Islands, leading the charge in devising a supply chain that can support the maritime sector’s access to green fuels. 

In May 2024, the Nordic Maritime Transport and Energy Research Programme launched the STORM project to address supply barriers, assess fuel suitability, and propose solutions to accelerate the green transition. Sweden’s leadership in this initiative highlights its commitment to not only fuel development, but also market accessibility. 

“Sweden is doing its part to drive shipping’s fuel transition through fuel development and regulatory frameworks. However, Europe must collaborate to efficiently distribute surplus renewable fuels across the continent,” Igelström concluded.

 

Photo credit: GAC Sweden
Published: 6 December, 2024

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