Alternative Fuels

LR webinar highlights lack of regulatory framework holding up decarbonisation progress

Held jointly with the Environmental Defense Fund, panelists discussed the lack of a clear regulatory framework on which can base their investment decisions.

Published

4 years ago

February 23, 2021

Admin

UK-based classification society Lloyd’s Register (LR) on Friday (19 February) said the uncertainty of regulations impacting investment decisions in the shipping industry was one of the key points discussed at its webinar held jointly with the Environmental Defense Fund (EDF).

The webinar was held on Thursday, 18 February and chaired by Katharine Palmer, LR’s Global Head of Sustainability.

Lloyd’s Register noted despite the need for speed, the shipping industry does not have the tools to decarbonise quickly enough to meet its own targets.

Without a clear regulatory framework on which shipowners and operators can base their investment decisions, shipping’s decarbonisation process will be too slow. As a result, any chance of the industry itself, through the IMO, retaining control of its own decarbonisation process will be lost.

Taking part in the webinar were Aoife O’Leary, Director, International Climate at EDF Europe, Trafigura’s Rasmus Bach Nielsen who headed the trading house’s shipping operations until recently and is now Global Head of Fuel Decarbonisation, and Tony Foster, CEO/CIO of Marine Capital, a marine asset manager which owns and operates ships on behalf institutional investors.

The following are the points discussed by the panelists at the webinar:

Focus on fuel supply chain

O’Leary emphasised the importance of national and regional decarbonisation measures which, she said, should start to take effect and enable the IMO to copy and broaden them across global shipping as a whole. She stressed the importance of the entire supply chain in measuring the environmental impact of different fuels and said that IMO regulations should not focus solely on the ship.

The production process is important. New fuels could be developed in brown, blue or green processes, she pointed out, with green clearly the most favoured. Such fuels are produced in processes involving no carbon and using sustainable sources of power.

Carbon levy – not complicated

Nielsen made a robust call for a carbon levy, warning that the IMO risks using past decision-making processes to make decisions for the future. He was referring to an assessment by the UN Agency in 2013 which concluded that a carbon levy was not the way forward. But eight years later, the world has changed, Nielsen declared, particularly after more than a year of pandemic.

He explained that although Trafigura is not an IMO member, its recent submission to the UN agency on the decarbonisation issue had set out how a carbon levy could work. It was not complicated, he said.

The greenhouse gas and polluting emissions of every marine fuel would be assessed. Ships using more polluting fuels would be penalised and their charterers would have to pay a levy into a central fund. This money, held within the industry, would then be used to subsidise the cost of using more expensive low- or zero-carbon fuels.

“We would need a firm regulatory framework, but it’s not that difficult to benchmark these fuels because there aren’t that many [of them],” he declared.

An incentive to do nothing

Foster noted conflicting pressures. On the one hand, the lack of a regulatory framework was potentially an incentive to owners to continue operating “old bangers”, he said, because there is currently no certainty on which to base investment decisions.

“Shipowners don’t know what they’re supposed to be doing and that’s disincentivising change in the short run,” he declared.

Meanwhile, on the other hand, initiatives like the Poseidon Principles were to be welcomed, Foster said, but the related financing criteria should be expected to tighten further, he warned. Indeed, it was not at all clear where the money would come from to fund new acquisitions or existing assets as financing terms became tighter.

Banks and finance houses were coming under increasing pressure from institutional investors and pension funds, he said, but it was by no means whether sources of ‘alternative capital’ would play a bigger role in financing existing and new assets and, if so, whether they would charge more for doing so.

A recording of Lloyd’s Register and EDF webinar is available here.

Photo credit: Lloyd’s Register
Published: 23 February, 2021

LNG Bunkering

CLPe and CNOOC form joint venture to offer LNG bunkering in Hong Kong

Joint venture will sell and supply LNG as bunker fuel to ships in port of Hong Kong, supporting the development of the LNG fuel bunkering sector in Guangdong-Hong Kong-Macao Greater Bay Area.

Published

18 hours ago

December 4, 2024

Admin

CLPe and CNOOC form joint venture to offer LNG bunkering in Hong Kong

CLPe Holdings (CLPe), CLP Group’s wholly-owned subsidiary, recently signed a Cooperation Framework Agreement with China National Offshore Oil Company Guangdong Water Transport Clean Energy Company Limited (CNOOC) on the formation of a joint venture to provide liquefied natural gas (LNG) fuel bunkering services in the port of Hong Kong.

Under the agreement between CLPe and CNOOC, the planned joint venture will sell and supply LNG as bunker fuel to ships in the port of Hong Kong, supporting the development of the LNG fuel bunkering sector in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and further consolidating Hong Kong’s position as a leading international maritime centre.

Separately, CLPe signed an agreement to extend its partnership with TELD New Energy Company Limited (TELD) on electric vehicle (EV) charging and other innovative energy services in the GBA.

“The two agreements will bring together the industry-leading expertise and experience of CLP and our partners to enable the transportation sector’s low-carbon development in the GBA, aligning with the Action Plan on Green Maritime Fuel Bunkering recently issued by the Hong Kong Government, which promotes the city’s growth as a high-quality green maritime fuel bunkering centre to steer the shipping industry’s smart and green transformation,” said CLP Holdings Limited Chief Executive Officer and Executive Director T.K. Chiang.

Hong Kong-listed CLP Holdings Limited is the holding company for the CLP Group, which has a diversified portfolio of generating assets that uses a wide range of fuels including coal, gas, nuclear and renewable sources

“The superior capabilities of CNOOC and TELD will help CLP expand our energy infrastructure and solutions business in the GBA, and deliver the best technologies and services to LNG fuel bunkering and EV charging customers.”

Photo credit: CLP Group
Published: 4 December, 2024

Methanol

VPS examines methanol as a marine fuel for decarbonisation

Steve Bee of VPS explores methanol’s potential as a bunker fuel, the challenges ahead, industry standards to support its usage and VPS’s role in supporting this transition.

Published

18 hours ago

December 4, 2024

Admin

Steve Bee, Commercial Director of marine fuels testing company VPS, on Tuesday (3 December) explored methanol's potential as a marine fuel, the challenges ahead, industry standards to support its usage and VPS's role in supporting this transition:

Introduction

It’s very apparent, global shipping’s drive to decarbonise is well underway. The ship-building profile is changing dramatically, highlighted by the 2023 order book showing 539 new builds capable of running on low-to-zero carbon fuels, being ordered. This equates to 45% of all orders in terms of gross tonnage. LNG dual-fuel vessels are currently the most popular vessels of choice, but Methanol-capable vessels have gained traction. Looking at Jan-Sept 2024, 49% of the gross tonnage on order was for vessels configured to be alternative fuels ready, with this specific order book growing by 24% year on year. It’s obvious that shipping is keeping its options very much open and looking for as much flexibility as possible, when it comes to the fuel choices for its ships.

The industry currently bunkers 230 Million mt of fuel per year. Burning this fuel equates to emissions of 716M mt of CO2-equivalent, as the majority of the fuel burnt continues to be traditional fossil fuels. However, the list of environmental legislation and directives to reduce emissions from shipping is ever-increasing in order to reduce SOx, NOx, Particulate Matter, CO2, Methane and other Green House Gases. It is this regulatory demand which is driving the developments of numerous alternative low-to-zero carbon fuels for marine use.

VPS has been and continues to be, at the forefront of fuels research & development and continues to pioneer and develop test methods for such fuels.

Methanol bunkers and bunkering facilities are growing with 13 ports now offering methanol. But this methanol is predominantly grey, and Tank-to-Wake emissions from grey methanol are similar to conventional fossil fuels. The maritime sector must look to use the sustainable “green” methanol options of e-methanol, bio-methanol, or blue methanol:

VPS examines methanol as a marine fuel for decarbonisation

IRENA forecast e-methanol will reach a production level of 250M mt and bio-methanol will reach 135M mt by 2050.

Currently we see 39 methanol-powered ships on our sees, but a further 262 are on order.

As with all fuels, there are numerous pro’s and con’s to using methanol as a marine fuel:

Methanol fuel handling and management is certainly easier than that for LNG, with retrofit costs being less expensive and easier. Plus, green methanol sources offer almost near-zero GHG emissions.

In terms of ECA compliance Methanol conforms to SOx, NOx and PM content. It is biodegradable, miscible with water and a liquid at atmospheric pressure, all of which are positive factors in terms of fuel management and handling.

As demand grows, methanol should become more cost competitive, with increasing number of ports providing methanol.

However, methanol has half the energy of maritime’s current fossil fuels and a Flash Point of only 12ºC. Current availability of green methanol, is still an issue, yet this year industry news has highlighted that some green methanol projects have been cancelled, eg one in Antwerp (Orsted) and Flagship-One in Sweden.

Over the past 2 years, VPS have made significant investments in CAPEX for new laboratory equipment, plus the training of laboratory staff, technical advisors and bunker quantity surveyors, in order to survey, sample and test methanol bunkers.

The summer of 2023 saw VPS act the partner of choice to Maersk and undertook work during the maiden voyage of the Laura Maersk. We surveyed, sampled and tested, the methanol loadings in Singapore, Port Said and Rotterdam. As part of the requirements, changes to bunkering practices and procedures included heightened H&S processes, increased levels of tank cleaning, the use of closed-sampling devices and the use of biofuel as the pilot fuel, which also required testing. Testing was under the International Methanol Producers and Consumers Association (IMPCA) specification, with the results all on specification from all three loadings.

Since then, VPS has also worked with OCI covering similar work on the ECO Maestro.

In October 2024, it was announced at SIBCON-24, that Singapore will release a new technical reference standard for Methanol before year end, which covers fuel transfer, quality and quantity measurements as well operational and safety instructions as well as crew training. VPS has been closely involved in the development of this new Methanol Standard by being part of the Working Group.

This same group will also release a similar standard for Ammonia in 2025.

The announcement from Singapore was followed by a further notification from the International Standards Organisation (ISO) in November 2024. The ISO announcement highlighted the release of the publication of the first edition of their international standard for methanol as marine fuel, ISO 6583:2024. This standard sets the requirements and limits for three methanol grades for marine: MMA, MMB and MMC. It uses the IMPCA specifications as a starting point, with some properties less critical for marine and other fuel related aspects not covered. Grade MMC allows for wider tolerances in certain characteristics compared to MMB, while MMA includes additional requirements for lubricity and cleanliness. The new Singapore Methanol Standard will make reference to the ISO 6583 for quality requirements under its custody transfer section.

Summary

As decarbonisation and legislation drives the development of low-to-zero carbon fuels, demand for methanol will grow as it provides an excellent way to achieve immediate reductions of emissions compared to fossil fuels.

VPS are experienced in providing methanol surveying, sampling and testing work and capable of offering key technical support to our customers.

All of this is evidence that the global shipping industry is well on its way and intent on delivering upon its decarbonisation goals, but with many challenges still to overcome.

Photo credit: VPS
Published: 4 December, 2024

Shipping Corridor

Ports of Tyne and IJmuiden launch Green North Sea Shipping Corridor project

Success of the project will drive the development of port infrastructure for electrification and the bunkering of clean powered vessels, says Matt Beeton, CEO at Port of Tyne.

Published

18 hours ago

December 4, 2024

Admin

Ports of Tyne and IJmuiden launch Green North Sea Shipping Corridor

Port of Tyne on Tuesday (3 December) said it launched a new project to create the Green North Sea Shipping Corridor, between the Port of Tyne in North East England and the Port of IJmuiden, situated directly by the sea at the entrance to the North Sea Canal Area and close to Amsterdam.

The port said the project is part of a GBP 9million (USD 11.4 million) investment announced by Maritime Minister Mike Kane in October, to decarbonise shipping and turbocharge green jobs, from which the port was successful in winning the International Green Corridors Fund.

During a visit, representatives from each organisation which includes the two ports as well as Copenhagen-listed transport and logistics company DFDS, London-listed environmental, engineering and strategic consulting company Ricardo plc and maritime data and communication provider KSVA, set in motion the scheme.

“This initiative aligns with the partners’ commitment to sustainability and plans for DFDS to target a significant reduction in CO2 emissions, by transitioning to methanol-fuelled RoRo/RoPax vessels, driving the shift towards a greener future for global trade,” Port of Tyne said in a social media post.

Separately, Ricardo said it will be the lead environmental consultancy in the next phase of the development of the green corridor project.

“Ricardo will provide its expertise and insight in sustainable shipping and low-carbon fuels choice to help determine a viable path for decarbonisation between the two ports,” the firm said.

Matt Beeton, CEO at the Port of Tyne, said: “This initiative represents another step forward for the port in our sustainability journey. By establishing this green corridor between the Port of Tyne and the Port of IJmuiden, we aim to significantly reduce carbon emissions between the Northeast of England and northern Europe, with the aim of saving up to 850,000 tonnes of CO2 annually.”

“The success of this project will bring more green jobs to the region and drive the development of port infrastructure for electrification and the refuelling of state-of-the-art clean powered vessels.”

Peter van de Meerakker, Managing Director of Zeehaven IJmuiden N.V. - Port of IJmuiden, said: “With the ‘zero emission’ new tonnage of DFDS, we are taking an important step forward, since a lot still needs to be done on both sides of the North Sea and this project helps enormously speed up and achieve our goals.”

Photo credit: Ricardo
Published: 4 December, 2024