Rasmus Stute from DNV interviews Sameer Kalra, President of the Marine Division and Executive Vice President at Alfa Laval, on key industry trends including the company's innovative approach to the energy transition, emphasizing fuel-agnostic solutions, energy efficiency and close collaboration with third parties to meet future challenges:

We met recently at the SMM trade fair, always a really important date on the shipping calendar. What were your takeaways?

The first thing that stood out to me was that energy efficiency seems to be really high on the agenda, alongside LNG as an alternative fuel. Secondly, digitalization seems to be much more in focus than just a couple of years ago. This is why it is so great to come to these trade shows; you can hear what the industry’s talking about and it really helps to calibrate your own views.

At SMM, we launched our latest Maritime Forecast to 2050, which focuses on the building blocks needed for the energy transition in shipping. From Alfa Laval’s perspective how are you going to respond to the energy transition? Is this a significant challenge or something you’ve already anticipated?

The one thing that Alfa Laval is absolutely known for is being innovative from the beginning and that’s still part of the company’s DNA. So when we started working around decarbonization and the energy transition roughly five or six years ago, we took the position that as Alfa Laval we needed to put our money where our mouth was. And, instead of just telling others to decarbonize, we also set some goals for ourselves for 2030. Right now, we expect to meet our Scope 1 and 2 net zero targets ahead of schedule. (PS: After this interview took place, Alfa Laval announced an updated goal to achieve net zero in its own operations by 2027, covering Scope 1 and 2 emissions.) 

However, challenges remain, particularly supporting customers in areas outside our direct control, such as fuel choice. Shipowners have a tough challenge, finding a vessel design and choosing a fuel that is economically viable, commercially attractive and future-proof for the next 20–25 years. Recognizing this complexity early on, we positioned ourselves to support shipowners with versatile, future-ready solutions. In particular, one major initiative has been to ensure our product portfolio is fuel-agnostic. 

Additionally, we have prioritized the development of new platforms focused on energy efficiency. Another key step has been the acquisition of StormGeo, which, whilst unconventional for a company like Alfa Laval, aligns with our strategy to address the evolving energy efficiency and sustainability demands of the maritime industry. Ultimately, our commitment is to provide solutions that enable both immediate and long-term decarbonization goals.

You mentioned key elements like energy efficiency and fuel flexibility, and you have set up your company to address these challenges. Looking ahead to 2030, what do you envision will be your most important products to support customers with these trends?

It is challenging to be definitive about specific products, but we can identify trends. Our energy efficiency portfolio will play an increasingly important role, even more so than it does today. Transitioning to clean fuels will also grow in importance. If I were to highlight one area, it would be energy efficiency over the short term. 

Given the challenges in scaling up the supply of green methanol and ammonia by 2030, boosting energy efficiency becomes an essential, immediate necessity for the industry. At Alfa Laval, all three of our divisions – Marine, Energy, and Food and Water – will contribute to these efforts. In the near term, we will focus on enhancing energy efficiency in existing systems whilst introducing new, innovative energy efficiency platforms across our product portfolio to support our customers in navigating this energy transition.

I’ve a follow-up question on the energy transition. How do you feel about the role of carbon capture and storage in this process?

From our perspective, carbon capture and storage (CCS) is set to play an important role, particularly on the energy side. However, the role of onboard carbon capture specifically is less clear. These are two different challenges and we need to approach them with an open mind. For instance, it’s possible that LNG could be a transitional fuel that achieves a 20% reduction in emissions. If onboard carbon capture technology could add another 10–15% reduction on top of that, it might be a viable step forward. 

However, there are still many questions to address. We need to solve challenges related to the footprint of onboard carbon capture systems, as well as their cost-benefit ratios. These are critical factors that must be worked out before onboard carbon capture becomes a widespread solution. That said, I have confidence in the ingenuity of the maritime industry, and I am optimistic that we will find ways to overcome these challenges. 

And whilst there are still questions to answer, I firmly believe that carbon capture and storage, both on land and onboard, could make a significant contribution towards accelerating the energy transition.

Note: The full interview by DNV can be found here.

Photo credit: Venti Views on Unsplash
Published: 14 January, 2025

The approximate 200 bunker tankers operating at the world’s largest bunkering port are a prime candidate for electrification, believes the Managing Director of marinEV, a business within Yinson GreenTech, the green technologies unit of Malaysia-listed Yinson Holdings Berhad.

Jan-Viggo Johansen was speaking to Manifold Times on the sidelines of Offshore Energy Week (OSEA) 2024 when he noted Singapore bunker tankers primarily operating over short distances within port waters and nearby shipping lanes, making them promising candidates for electric or hybrid-electric propulsion.

“These vessels spend a significant portion of their time at port, transferring marine fuel to docked or anchored ships, and are not required to undertake long-haul journeys,” he explained.

“This operational profile allows them to leverage charging infrastructure during docked periods or quick turnarounds.

“Electrification is particularly viable for vessels designed for short trips between terminals, shipyards, and anchored ships within Singapore’s waters, presenting a strong opportunity to adopt more sustainable propulsion systems.”

Electrification of bunker tankers at the republic presents both opportunities and challenges, added Johansen.

“One key challenge is the higher upfront capital cost compared to conventional fuel-powered vessels, driven primarily by the expense of battery systems and retrofitting existing fleets. However, the short operational distances typical of Singapore’s bunker tanker market could accelerate economic viability. Operators can gain returns on investment through reduced fuel consumption, lower maintenance costs, and potential access to regulatory incentives,” he said.

“On the opportunity front, electrification enhances the environmental profile of companies within the sector. As the global shipping industry increasingly prioritises sustainability, the ability to operate electric-powered vessels provides a competitive advantage. Bunker suppliers and operators can leverage this shift to meet the growing demand for green shipping solutions while aligning with international sustainability goals.”

Johansen, meanwhile, shared Yinson GreenTech's marinEV division has been collaborating with the Maritime and Port Authority of Singapore (MPA) to advance high-power DC charging solutions, including the Megawatt Charging System (MCS), within Singapore's ports.

MCS technology is designed to deliver large amounts of energy in significantly shorter durations, catering to the charging needs of larger vessels such as ferries and harbour tugs which rely on substantial battery capacity and require rapid turnarounds to ensure operational efficiency and flexibility.

“The strong support from MPA, enthusiasm from industry leaders in adopting greener practices in their operations and the substantial commercial and environmental benefits have positively charged the growth of electrified solutions in the marine space over the past few years,” stated Johansen.

“We are proud to be part of an innovative maritime community working towards cleaner port waters through vessel electrification and developing MCS charging infrastructure to support the growth of electric vessels in the industry. “

Manifold Times earlier reported Yinson GreenTech launching Singapore’s first fully electric hydrofoil vessel, the Hydroglyder, at OSEA 2024.

Related: Yinson GreenTech reveals Singapore’s first fully electric hydrofoil vessel
Related: Goal Zero Consortium launches Singapore’s first electric cargo vessel Hydromover

Photo credit: Yinson GreenTech
Published: 26 November 2024

Lack of knowledge on pricing, quality and product availability for biofuels is leading to hesitation in signing term agreements, FincoEnergies told ENGINE.  

When it comes to biofuels, a lack of knowledge and visibility on biofuel prices is one of the main reasons shipping companies are hesitant to close term contracts today, Johannes Schürmann, commercial director of FincoEnergies’ marine division said.

"We have pitched to quite a few customers about closing a term contract, maybe a 1- or 2-year contract based on one biofuel pricing index, but we haven’t succeeded," Schürmann explained. "The main reason is that internally, they need board approval to lock in certain price levels. They prefer using a floating price with a fossil index, like ICE Gasoil plus a fixed premium, to calculate their exact financial exposure."

While some globally accepted pricing indexes for biofuels exist, shipping companies often lack access to these essential price points. And without reliable pricing information, these companies struggle to make informed decisions, making them reluctant to engage in long-term commitments. 

“The main reason is they have no clue [about] the pricing indexes in biofuel,” Schürmann said.

To address this, Schürmann argued for fixed-term contracts, which lock in prices over an agreed period, reducing exposure to spot market fluctuations and easing logistical challenges related to adjusting barge or cargo deliveries.

Another challenge is uncertainty about availability of biofuels, particularly outside major bunkering hubs like ARA and Singapore. Suppliers in more and more ports have launched biofuel bunker operations, but there is a perception among shipowners that availability is still lacking and that opting for biofuels to comply with regulations like FuelEU Maritime in the EU can reduce their flexibility if they call at ports without availability.

Term contracts can help mitigate these risks by sending firm demand signals to suppliers, who can then plan future investments and establish logistics to meet increased bunker demand, according to Schürmann.

The sulphur factor for biofuels  

Different grades of biofuels can be used in the road, shipping or power generation industries. However, quality differences among these grades can significantly impact pricing in the shipping sector, Schürmann emphasised. This variability can make it difficult for buyers to predict costs accurately, which in turn can influence their decision to sign term contracts.

Some biofuels can be used interchangeably as road or bunker fuels. Others have higher sulphur content, which makes them unsuitable for road while still acceptable for shipping. 

For instance, a product with 20 ppm sulphur content cannot be used by vehicles because it exceeds the road standard cap of 10 ppm. But it can be used in shipping since it is below the International Maritime Organisation's (IMO) 0.10% - or 1,000 ppm - cap. This product may be sold at a discount because it is limited to bunkering, he explained.  

Biomethanol's quality and pricing labyrinth  

The pricing situation becomes even more challenging for new alternative fuels like low-carbon methanol or ammonia, Schürmann argued.  

For instance, he said, green ammonia is not yet widely available, making it difficult to establish prices for it. Methanol, and especially biomethanol, currently lacks a standardised pricing mechanism for shipping. Some companies provide individual quotes, but market prices vary widely across suppliers. This can complicate decision-making for buyers considering these emerging bunker fuels. 

Discrepancy in quality and regulations can add another layer of complexity to the pricing structures for fuels like biomethanol. 

Biomethanol quality, especially for prototype batches, can differ significantly. Specifications of methanol supplied for shipping are gradually aligning with the International Methanol Producers and Consumers Association (IMPCA) Reference Specifications.  

The IMPCA reference specs are a set of standards that define fuel quality of methanol by testing for elements like chloride, sulphur, hydrocarbons, acidity and volatility.

These specifications help ensure consistency within methanol grades. But there remains some uncertainty about the range of methanol grades that engine manufacturers like MAN Energy Solutions and Wärtsilä can accept. Engine manufacturers are still determining which specifications to allow and finalise, which complicates methanol's pricing and market readiness.  

As methanol begins aligning with chemical industry specifications, any quality variations or unmet specifications could create price disparities depending on which industries can utilise the product, he added. 

Given this uncertainty, shipping companies might feel it is more prudent to adopt a wait-and-see approach, preferring to engage in spot or very short-term deals like quarterly agreements, rather than committing to multiple-year contracts. 

Addressing the biomethanol demand drought 

FincoEnergies started offering truck-to-ship biomethanol deliveries in the Port of Amsterdam last year. But demand remains low.

“We have had biomethanol in stock for over a year; we have a truck ready to deliver, and we have the parts ready to deliver, but we see that demand for biomethanol is very, very low,” Schürmann said. 

The company is still betting on this fossil fuel alternative because it expects demand to pick up in the near-term.

"Whilst current demand is developing, the company maintains its commitment to biomethanol, supported by industry movements such as Maersk's recent long-term methanol sourcing agreement," he said.

There are now 43 methanol-capable vessels in operation globally and another 342 vessels are on order for deliveries towards 2033, according to classification society DNV's database.

“So yeah, we need to invest in that [fuel],” Schürmann said.  

To offset financial risks, he thinks that fuel suppliers should strike the right balance between spot deliveries and term contracts.  

"There will be shipping companies that close contracts; you only need to find the right ones, and you need to set up a partnership approach.”  

By Konica Bhatt

Photo credit: FincoEnergies
Source: ENGINE
Published: 18 November, 2024