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.
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
Osaka Gas launches shore-to-ship LNG bunkering service at its terminal
Company says it is the first gas utility company in Japan to offer LNG bunker fuel at its terminal to vessels and is also exploring the potential of replacing LNG with e-methane as a marine fuel.
Osaka Gas on Monday (21 April) said it has launched its shore-to-ship LNG bunkering service, becoming the first gas utility company in Japan to offer liquefied natural gas (LNG) at its terminal to vessels.
The first delivery took place today at Osaka Gas’ Senboku LNG Terminal in Takaishi City, Osaka Prefecture, where LNG was supplied toVerde Heraldo, a bulker operated by Mitsui OSK Lines (MOL).
Manifold Times previously reported that the bulker will sail under long-term transport contracts to supply raw materials for JFE Steel Corporation's mills.
With the launch of the shore-to-ship service, in addition to its existing truck-to-ship LNG bunkering service—operational since 2019—Osaka Gas enhances its LNG fuel delivery capabilities to address the current scarcity of facilities in Japan that can supply LNG to vessels.
The company’s future plans include the introduction of a ship-to-ship LNG bunkering service utilising a dedicated LNG bunkering vessel, scheduled to commence in fiscal 2026.
These supply methods aim to provide a stable and flexible LNG fuel supply to an increasing number of LNG-fuelled vessels as the maritime industry transitions away from heavy fuel oil.
This growth in LNG-fuelled vessels is driven by global decarbonisation trends and the International Maritime Organization’s target to achieve net zero greenhouse gas emissions by 2050. Through its LNG bunkering services, Osaka Gas is well-positioned to contribute to maritime industry sustainability.
In addition to expanding LNG fuel supply to vessels, Osaka Gas is exploring the potential of replacing LNG with e-methane as a marine fuel.
Japan: J-ENG begins co-firing of first full-scale marine engine with ammonia
Company says the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia.
Japan Engine Corporation (J-ENG) on Monday (21 April) said the first Japanese-developed and manufactured commercial full-scale, low-speed, ammonia-fuelled two-stroke engine has started co-firing operation with ammonia, which will be installed in a vessel.
J-ENG is developing the engine under the “Green Innovation Fund Project: Next-generation Ship Development” of the New Energy and Industrial Technology Development Organization (NEDO).
Since May 2023, when J-ENG started the world's first ammonia co-firing operation of a large, low-speed, two-stroke engine in a test engine, J-ENG has obtained many results and knowledge, including stable operation at high ammonia co-firing rates and safe handling of ammonia, through various test operations over a period of about a year and a half.
J-ENG will conduct verification operations on the full-scale engine and plans to ship the engine in October of this year. The engine will be installed on an Ammonia-fuelled Medium Gas Carrier (AFMGC) and then demonstration operations of the vessel will be carried out then.
In order to accommodate a wide variety of ammonia-fueled vessels, J-ENG is also concurrently developing an ammonia-fueled engine with a cylinder bore of 60cm, following the first engine with a 50cm cylinder bore mentioned above, for several promising follow-on projects.
Furthermore, after achieving the development and social implementation of these engines, the company has decided to construct a new plant with the support of a subsidy project by the Ministry of the Environment and the Ministry of Land, Infrastructure, Transport and Tourism through the GX Economic Transition Bonds.
The new plant, which is scheduled for completion in 2028, will expand the production of ammonia fuel engines (in the product mix with fuel oil engines) and promote the spread and expansion of zero-emission ships.
“J-ENG, as a first mover of next-generation fuel engines, will contribute to the development of the Japanese shipping and shipbuilding industries through the early launch and expansion of these engines, and at the same time, contribute to the reduction of greenhouse gases (GHG) in international shipping and the achievement of carbon neutrality by 2050,” the company said on its website.
Photo credit: Japan Engine Corporation Published: 23 April, 2025
Tsuneishi Shipbuilding completes first block loading of methanol-fuelled newbuildings
Company completed the first block loading of its first 5,900TEU methanol-fuelled containership and its first methanol dual-fuelled Kamsarmax bulk carrier in China and Philippines respectively.
Tsuneishi Shipbuilding on Tuesday (22 April) said its shipyard in China successfully completed the first block loading for its first 5,900TEU methanol-fuelled containership, which is the largest of this ship type built by the company, on 16 April.
In addition to the enhanced hull form and MT-FAST, the company’s innovative energy-saving technology, the integration of a large-capacity shaft generator has enabled this dual-fuel vessel to achieve both optimal loading performance and exceptional fuel economy when compared with fuel oil vessels in the same segment.
MT-FAST is an energy-saving device that improves propulsion efficiency by approximately 4% by regulating water flow through the installation of multiple fins in front of the propeller. It was developed jointly with MTI of the NYK Group.
The vessel has been developed based on the concept of a final solution for the zero CO₂ emission vessel through the use of green methanol. Therefore, not only the main engine but also all on-board generators, HiMSEN engine which will be supplied by HD Hyundai, can be methanol-fuelled.
This makes it possible to achieve carbon neutrality with the exception of a small amount of pilot fuel. Furthermore, the vessel is equipped with the necessary infrastructure to receive large-capacity alternative maritime power supplies.
“In addition, the generators can be deactivated during anchorage, thereby achieving zero CO₂ emissions. We will continue to promote the further practical application of methanol-fuelled vessels with the aim of achieving carbon neutrality in the future,” the company said.
Additionally, the Japan-based shipbuilder said its yard in the Philippines has successfully completed the first block loading for its first methanol dual-fuelled Kamsarmax bulk carrier on 21 April at THI Slipway No.2 .
The vessel is scheduled to be launched in July 2025 and delivered in January 2026.
It is the first methanol-fuelled vessel in the Kamsarmax series, a long-standing series of vessels built by Tsuneishi Shipbuilding, which reached the 400-vessel milestone in July 2024.
By using methanol for propulsion, Tsuneishi Shipbuilding said the vessel reduces carbon dioxide emissions by 10%, nitrogen oxide emissions by 80% and sulphur oxide emissions by 99% during voyages compared to conventional models.
Photo credit: Tsuneishi Shipbuilding Published: 23 April, 2025