Bunker Fuel

Integr8 Fuels: Off spec issue with MGO equally likely to occur as with HSFO

In its Bunker Quality Trends Report Q3 2023, Integr8 highlighted that the industry is equally likely to face an off specification issue with MGO as with HSFO, with VLSFO being one third less likely.

Published

1 year ago

November 15, 2023

Admin

Integr8 Fuels, the bunker trading and brokerage arm of Navig8, on Tuesday (7 November) released its Bunker Quality Trends Report Q3 2023, analysing data from 120 million metric tons of supply, to reveal key trends relating to fuel quality and availability. An excerpt of the report is as follows:

Introduction: Challenges fueling change

As we come to the end of another year in the world of bunkers that seems to have passed with the blink of an eye, our minds shift towards the challenges on the horizon and how as an industry we need to embrace change to profit and succeed in the future.

This is the third Integr8 Fuels quality report covering the last six months of supplies globally where we again dissect and compare the likelihood of hidden losses and off specification issues across all commercial grades of bunkers and key ports.

Using ‘best in class’ available data from over 120 million metric tons (MT) of deliveries globally across 1,300 locations and from over 800 suppliers, we will also assess fuel quality trends using our own Integr8 Quality Index which scores the proximity (or otherwise) of individual parameters within each sample to the relevant table 1 or table 2 specification limits within ISO 8217.

Finally, given the context of the incoming changes we will consider some of the challenges that decarbonisation and verification of emissions will bring to the industry.

Part 1: Off specification frequencies

How likely are we to be faced with an off specification situation?

In the last 180 days, owners’ analysis available to Integr8 Fuels has highlighted that you are equally likely to have an off specification issue with marine gas oil (MGO) as with high sulphur fuel oil (HSFO) with very low sulphur fuel oil (VLSFO) being one third less likely (see figure 1).

What is the likelihood of receiving noncompliant or critically off spec bunkers?

It is always important to consider the context of the off specification incidents.

To do this it is essential to consider the likelihood of MARPOL Annex VI (sulphur) or SOLAS (flash point) infractions and the likelihood of critical off specification incidents such as cat fines, total sediment potential, used lubricating oils, sodium and ash content (high risk) against routine and easily rectifiable off specification issues classified “low risk” such as a high viscosity in HSFO.

The rule of thumb when comparing off specification incidents by grade is that the parameters targeted in any blending model are the most likely to be outside the specification.

For example, VLSFOs are targeted on sulphur, with the price difference for 50,000MT of fuel with a sulphur content of 0.49 compared to 0.45 possibly equating to hundreds of thousands of dollars. It’s hardly surprising, therefore, that both VLSFO and MGO, both of which are blended to a sulphur target, have more prevalence of MARPOL Annex VI non-compliances at 0.5% and 0.1% respectively.

However, MARPOL Annex VI is not the only compliance issue - we cannot ignore the requirement for flash point being 60°C or above as demanded by SOLAS. Indeed, off specification flash point, particularly with LSMGO, may be an unintended consequence of pulling low sulphur automotive or inland grades into the bunker pool as identified later in this paper.

High risk off specification incidents, defined as the total of both compliance and high risk off specifications, are seen to be most prevalent in MGO followed by VLSFO and, finally, HSFO. In fact, if you strip out compliance off specification, incidents relating to total sediment potential (TSP), aluminium and silicon (Al+Si) etc. for residual grades are very low indeed.

That said, there are many nuances, from region to region, to port-to-port, and even supplier-to-supplier at the same location. It therefore remains essential to consider these when buying bunkers and we will address some of the challenges later in the paper.

Availability of products (September 2023)

Unsurprisingly, marine gas oil is the most available product (640 ports) given the ability to substitute and supply higher quality inland or automotive grades and logistical ease of supplying what are quite often small quantities.

VLSFO is also seen to be readily available across all continents but at 28% fewer ports (458

ports), this because of larger quantities being ordered and the storage and barge infrastructure to support these supplies in general.

High sulphur fuel oil is the only product which is not readily available, with only 231 ports listed as of September 2023 (see figure 2). HSFO availability is centered around bunkering hubs and geographically key areas likely to receive passing trade from VLCCs and / or other scrubber fitted sectors. It is important, therefore, to plan carefully for HSFO and consider the type of scrubber fitted to the vessel along with any local limitations in forthcoming voyages that may require a fuel switch to LSMGO, for example.

Biofuel blends

Data is now becoming available for tests of identified biofuels supplied globally and whilst this is still very small in comparison with conventional fuels, it is clear to see the apparent void stretching from Singapore to Europe currently present.

Moreover, we are not currently able to comment on the sustainability of the biofuels being supplied but can confidently predict that Indonesia fuels, for example, will likely be sourced from palm oil and would not satisfy a verifier of emissions. ARA, and in particular Rotterdam, is seen to be the epicenter of supply in Europe given the current subsidies available in the Netherlands. VLSFO blends are almost exclusively limited to bunker hubs.

Which specifications are being traded?

Even as we eagerly anticipate the new version of ISO 8217 hopefully expected in early 2024, we continue to work in the past when it comes to the specifications we buy and sell on a day-to-day basis.

The scale of the challenge can be laid bare by considering the charts below, (figures 4 and 5), which identify the split of residual and distillate ISO 8217 grades traded by product group in the last 180 days.

Residual Fuels

Just over one quarter of trades are guaranteed to the latest version of the specification (2017) which is virtually unchanged compared to previous figures.

Distillate Fuels

In the case of MGO, only 18% of fuels traded were sold as 2017 fuels in the last 180 days, slightly less than previous. A very slight reduction in 2005 fuels was noted from 11% to 9%, however it is worth remembering that this specification is nearly 19 years old.

Note: The full report of Integr8 Fuels’ Bunker Quality Trends Report Q3 2023 can be found here.

Photo credit: Integr8 Fuels
Published: 15 November 2023

Up Next

Fratelli Cosulich Marine Energy unveils new digital presence

Don't Miss

IBIA Board Elections 2024: Call for Nominations

Alternative Fuels

South Korea launches USD 696 million green bunker fuel infrastructure fund

Out of KRW 1 trillion, KRW 600 billion will be invested to build port storage facilities capable of supplying alternative marine fuels while KRW 400 billion will be used for constructing four bunkering vessels.

Published

16 hours ago

January 22, 2025

Admin

South Korea launches USD 696 million green bunker fuel infrastructure fund

South Korea’s Ministry of Oceans and Fisheries and Korea Ocean Business Corporation recently held a launch ceremony in Seoul for a KRW 1 trillion (USD 696 million) infrastructure fund that will be used to support the development of storage facilities for green marine fuels and bunkering vessels.

Out of the KRW 1 trillion, KRW 600 billion will be invested to build port storage facilities capable of supplying LNG, methanol, and ammonia, and the remaining KRW 400 billion will be invested in constructing four new LNG and ammonia bunkering vessels by 2030.

The move is expected to meet growing demand for green bunker fuels for domestic vessels and ensure reliable fuel supplies for foreign ships calling at domestic ports.

The ministry also announced that the Ulsan Hyundai Liquid Cargo Terminal Expansion Project was selected as the new fund’s first project to support the demand for methanol bunker fuel for domestic and foreign vessels. The total cost of the project is KRW 240 billion, of which KRW 130 billion will be provided by the infrastructure fund.

In addition, the government plans to strengthen LNG supply capabilities through the Yeosu Myodo LNG Hub Terminal Project scheduled as the second project to be supported by the fund.

Minister of Oceans and Fisheries Kang Do-hyung, said: “Through the infrastructure fund, the government will flexibly expand the eco-friendly ship fuel supply infrastructure in line with future demand so that our ports can continue to secure a competitive edge as a global hub port.”

Photo credit: Ministry of Oceans and Fisheries of South Korea
Published: 22 January, 2025

Alternative Fuels

UECC green bunker fuel investments avert FuelEU surcharges for customers

UECC said it has been able to eliminate surcharges for its customers under FuelEU Maritime as proactive adoption of green marine fuels has drastically reduced its financial exposure to the regulation.

Published

16 hours ago

January 22, 2025

Admin

UECC and Titan team up on bio-LNG bunkering operations in Port of Zeebrugge

United European Car Carriers (UECC) on Monday (20 January) said it has been able to eliminate surcharges for its customers under FuelEU Maritime as proactive adoption of green fuels has drastically reduced its financial exposure to the newly implemented regulation.

Currently, switching to low-carbon biofuels is generally seen as the most effective route to achieve compliance with progressively tighter carbon intensity reduction targets and thereby avoid penalties under FEUM, which is designed to promote uptake of alternative fuel technologies towards the goal of net zero.

However, this approach will typically entail higher fuel costs for shipping companies given that biofuels - which can deliver respective reductions of 85% and 100% in well-to-wake and tank-to-wake emissions - cost between 50-150% more than conventional fossil fuels, while there is also limited feedstock supply.

An additional ‘Energy Surcharge’ levied on shippers to compensate for this price differential can be as much as 2-5% with the use of biofuel, according to UECC’s Energy & Sustainability Manager Daniel Gent.

But he said: “UECC will change absolutely nothing about its pricing structure in relation to FEUM.”

Gent explained this is largely due to the fact that UECC has already achieved significant reductions in carbon intensity by expanding the use of biofuels across its 15-vessel fleet since 2020.

It has also adopted liquefied biomethane (LBM) on its five dual and multi-fuel LNG Pure Car and Truck Carriers under the Sail for Change sustainability initiative launched last year that is supported by several major vehicle manufacturers.

“Consequently, we are already running a compliance surplus in relation to FEUM with our current energy mix and this is expected to extend into the early 2030s,” he says.

“We have previously informed our customers that their support for our investment in multi-fuel LNG vessels would insulate them against regulatory penalties and this is exactly what is happening here. This demonstrates the clear benefits of being ahead of regulation, investing in progressive technology and in the process of generating savings for our customers.”

UECC’s fleet decarbonisation effort has focused on investments in eco-friendly newbuilds - with two more multi-fuel LNG battery hybrid PCTCs currently on order - as well as piloting alternative fuels, in addition to operational efficiencies and technical measures such as waste heat recovery and hull anti-fouling.

The company has rigorous fuel selection criteria based on sustainability, technical suitability and commercial viability. Its bio-products are compliant with Renewable Energy Directive (RED) criteria and sourced from Annex 9 feedstocks in line with regulatory requirements, while all fuels used are ISCC-certified.

Through a proactive fuel procurement strategy, UECC has secured volumes of alternative fuels for the longer term through agreements with suppliers like Titan Clean Fuels for LBM and ACT Commodities for biofuels to promote green fuel bunkering infrastructure. It is also diversifying its sources of supply, such as through a recent first truck-to-ship LBM refuelling operation with Naturgy in Spain.

“LBM from certain feedstocks or including carbon capture are the ‘heavy lifters’ on our decarbonisation journey and we see huge potential in these fuels,” Gent says.

UECC is firmly on track to achieve a minimum 45% reduction in carbon intensity by 2030 to surpass the IMO target, while it is also set to exceed the required FEUM reduction of 31% by 2040 versus a 2020 baseline of 91.16 grams of CO2 equivalent per megajoule.

This means that UECC will have a sufficient compliance surplus to provide a pooling opportunity for third-party vessels under FEUM “so that all stakeholders can benefit from our investments”, according to Gent. But he says the company is not resting on its laurels and intends to make further alternative fuel investments with the aim of phasing out oil-based fossil fuels by 2040.

“As we are going ‘above and beyond’ in terms of our commitment to alternative fuels such as LBM and biofuel, we expect to have a significant compliance surplus under FEUM. With the investments we are planning in such fuels, UECC will never be in a position of needing to buy or borrow compliance units,” Gent concluded.

Photo credit: United European Car Carriers
Published: 22 January, 2025

Research

Safetytech Accelerator trials show strong potential to cut methane emissions in shipping

Three technologies from Framergy, Sorama, and Xplorobot, which were selected by MAMII, show potential to detect, measure, and mitigate methane emissions on LNG-powered ships.

Published

16 hours ago

January 22, 2025

Admin

Safetytech Accelerator on Tuesday (21 January) said it has successfully completed three technology feasibility studies as part of its flagship Methane Abatement in Maritime Innovation Initiative (MAMII).

The studies were done in collaboration with Chevron, Carnival Corporation, Shell and Seapeak.

The results of these feasibility studies showed strong potential to cut fugitive methane emissions in the maritime industry.

MAMII is exploring options to advance these research projects to on-ship trials as soon as possible. 

While methane slip - unburnt methane released during the combustion process - remains the largest source of methane emissions on ships, emissions across the LNG supply chain, from loading to engine delivery, are also a concern.

These fugitive emissions are often unintended and short-lived, but identifying, quantifying, and mitigating them is essential to achieving industry-wide decarbonization goals.

Xplorobot, Sorama and framergy were selected by MAMII to help address the vital need to detect, measure and capture fugitive methane emissions from LNG-fuelled ships.

Each provider selected for the trials brings expertise in a different technology, including:

Xplorobot: Provides a handheld device and AI-powered platform to detect and measure fugitive methane on ships using computer vision to pinpoint leak locations, overlay real-time emission rate data, and integrate seamlessly with existing systems for quick issue resolution without requiring specialised training.
Sorama: Develops acoustic cameras that detect fugitive gas by visualizing sound and vibration fields in 3D. Integrated AI and onboard software identify anomalies and classify sounds, enabling direct leak localization without complex analysis.
framergy: Specialises in adsorbents and catalysts for methane emission management. Their product, AYRSORB™ F250GII, captures and stores fugitive methane by selectively filtering methane from the air, leveraging its ultra-high surface area and coordination chemistry.

Feasibility Study Results Show Promise For Methane Abatement

Xplorobot conducted a detailed evaluation of their Methane Compliance Solution, focusing on its efficacy in detecting and quantifying methane emissions on LNG carriers and LNG-powered vessels.

The study targeted emissions from the warm side of the gas fuel line and both planned and unplanned venting events. Utilising comparable on-land data, this desktop analysis assessed how the technology would perform in maritime settings.

The technology demonstrated accuracy levels of +/-30% for emissions over 500 grams per hour and +/-50% for emissions between 100 and 500 grams per hour, thanks to a refined neural network algorithm calibrated through controlled release experiments. Xplorobot's solution promises to reduce inspection time dramatically with the ability to inspect 50 to 100 components in under an hour—sometimes as quickly as 10 minutes.

This efficiency, combined with automated digital emission tracking and compliance reporting, make the solution cost-effective. The next step is to deploy the kit in the field to further validate and optimise the technology for widespread adoption across the maritime industry.

Photo credit: CHUTTERSNAP from Unsplash
Published: 22 January, 2025