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Analysis

MPA completes investigations into bunker fuel contamination; temporary suspends Glencore’s Bunkering Licence

MPA has also asked Glencore to improve its internal procedures to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality, it states.

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The Maritime and Port Authority of Singapore (MPA) on Wednesday (3 August) said it has completed investigations into bunker fuel contamination in Singapore port.

Background:

MPA was notified on 14 March 2022 that a number of ships had been supplied with High Sulphur Fuel Oil (HSFO) containing high concentration levels of Chlorinated Organic Compounds (COC) (1,2-Dichloroethane, Tetrachloroethylene) in the Port of Singapore. MPA provided two interim updates on 13 April 2022 and 5 May 2022.

The following are the conclusions of MPA:

Key Findings

MPA earlier updated on 5 May 2022 that the source of the affected HSFO fuel containing high concentration levels of COC, supplied by Glencore Singapore Pte Ltd (Glencore) and PetroChina International (Singapore) Pte Ltd (PetroChina) [1], was traced to fuel loaded on a tanker at the Port of Khor Fakkan, United Arab Emirates. Forensic fingerprinting analysis of the fuel samples taken from the tanker showed a match with samples taken from several affected ships that had taken HSFO from both Glencore and PetroChina.

MPA also established that both Glencore and PetroChina, as MPA-licensed bunker suppliers, had carried out tests on the fuel supplied to ships prior to their sale based on the international standards of petroleum products of fuel - International Organization for Standardization 8217 (ISO 8217) [2]

MPA found no evidence that Glencore or PetroChina had intentionally contaminated the HSFO.

Action taken against Glencore for contravention of MPA’s Bunkering Licence Terms and Conditions 

Between 21 and 23 March 2022, the fuel oil testing laboratory engaged by Glencore reported results showing that the samples taken from the parcels of fuel oil Glencore purchased, contained concentrations of COCs that ranged from approximately 2,000 ppm to 15,000 ppm. COCs are not commonly present in bunker fuel, especially at such elevated levels.

MPA’s investigation found that despite this, Glencore continued to supply bunkers blended with the fuel purchased that was contaminated with high levels of COC to vessels in the Port of Singapore from 22 March 2022 to 1 April 2022.

By doing so, Glencore contravened the terms and conditions of its Bunkering Licence (Bunker Supplier) in failing to ensure that no bunkers supplied by it were contaminated. Glencore was given the opportunity to comment on these findings before MPA finalised its conclusions.

A total of 24 vessels were supplied with the affected fuel by Glencore from 22 March to 1 April 2022, and at least 3 vessels have reported issues with their fuel pumps and engines.

MPA will suspend Glencore’s Bunkering Licence (Bunker Supplier) for two months with effect from 18 August 2022. MPA has also asked Glencore to improve its internal procedures to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality.

No action taken against PetroChina 

MPA’s investigation also revealed that PetroChina had stopped delivery of the contaminated fuel promptly by 19 March 2022 once it received its own test results that the fuel it supplied was contaminated with COC. MPA has therefore decided not to take any action against PetroChina.

Licensed Bunker Suppliers to Strictly Adhere to the Terms and Conditions of Licences

MPA takes compliance with its bunkering licensing regime seriously.

MPA has reminded all licensed bunker suppliers to adhere strictly to the terms and conditions of their licences. MPA takes a serious view of contraventions of the bunker supplier licence terms and conditions, and will not hesitate to suspend or cancel the relevant licences, where necessary. MPA has also reminded licensees to immediately report to MPA any irregularity in any bunker operation or contravention of any provision under the terms and conditions of their bunker supplier licence.

MPA to Work Together with Shipping Industry to Strengthen Fuel Quality Checks

MPA’s quality fuel assurance measures comprise the Bunker Quality Inspection System (BQIS) and the Intensified Bunker Quality Checks (IBQC). The BQIS tests the quality of bunkers supplied to vessels while the IBQC tests bunkers carried by bunker tankers before supply to vessels. On average, over 1,300 bunker samples are tested annually under the BQIS and IBQC to verify compliance with ISO 8217. While the occurrence of COC is rare in bunkers, MPA has now included COC to be tested under both BQIS and IBQC.

MPA and the Singapore Shipping Association (SSA) will co-chair an industry expert group to establish a list of chemicals to be tested and their corresponding concentration limits. The expert group is expected to make its recommendations on additional measures to strengthen quality assurance of bunkers delivered in Singapore. The Chemical Metrology Division from Singapore’s Health Sciences Authority (HSA), the International Council on Combustion Engines (CIMAC) [3] and the International Bunker Industry Association (IBIA) [4], have expressed support for MPA’s efforts to strengthen fuel quality checks and have confirmed their participation in the expert group. In addition, experts from testing laboratories and other relevant bodies will also be involved in the expert group.

MPA, in consultation with Standards Development Organisation [5], will also continue to share relevant information with the ISO, as part of the ISO’s ongoing review of the ISO 8217 standards.

[1] Part of the affected HSFO was sold by Glencore to PetroChina who in turn had supplied to ships in the Port of Singapore.
[2] ISO 8217 - International Standards Petroleum products — Fuels (class F) — Specifications of marine fuels – Table 2.
[3] CIMAC is a leading non-profit Association of the internal combustion machinery industry.
[4] IBIA is a non-governmental organisation for the global bunker industry with members from across the industry value chain in more than 70 countries.
[5] In 2011, Enterprise Singapore appointed the Singapore Chemical Industry Council Limited (SCIC) as a Standards Development Organisation (SDO) to administer the standardisation work of the Chemical Standards Committee (CSC) which supports chemical and related industries.

Related: MPA investigation traces contaminated bunker fuel back to source at Port of Khor Fakkan
RelatedMPA: Glencore and PetroChina supplied contaminated bunkers to about 200 ships in the Port of Singapore

 

Photo credit: Manifold Times
Published: 3 August, 2022

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Research

Yamna identifies five potential global ammonia bunkering hubs

Unlike methanol, ammonia is not constrained by biogenic CO2 availability, and its production process is relatively simple.

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Yanma projected ammonia bunkering hubs

Specialised green hydrogen and derivatives platform Yamna in early December identified several potential ammonia bunkering hubs around the world.

The hubs are Port of Rotterdam, Port of Algeciras, Suez Canal, Jurong Port, and Port of Salalah.

“The shipping industry faces an ambitious challenge: reducing emissions by 20% by 2030 (compared to 2008 levels) and achieving net-zero emissions by 2050, in alignment with IMO targets,” it stated.

“Achieving these goals in the medium to long term depends on the adoption of alternative low-emission fuels like green ammonia and methanol.

“Among these, ammonia is attracting growing interest as a viable option. Unlike methanol, it is not constrained by biogenic CO2 availability, and its production process is relatively simple.”

However, the firm noted kickstarting ammonia bunkering on a large scale required four enablers to align:

  • Ammonia fuel supply
  • Application technology
  • Bunkering infrastructure
  • Safety guidelines and standards

It believed ammonia bunkering hubs will first emerge where affordable and scalable ammonia supply is available.

Yanma Why use ammonia for bunkering fuel

 

Photo credit: Yanma
Published: 31 December 2024

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Research

Port of Long Beach releases Clean Marine Fuels White Paper

Document intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

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Clean Marine Fuels Port of Long Beach (December 2024)

The Port of Long Beach (PLB) in late December released the Clean Marine Fuels White Paper as part of efforts to identify solutions capable of reducing emissions from ships.

“To understand the opportunities and challenges related to the adoption of clean marine fuels, the Port of Long Beach hired ICF Consulting to develop this white paper as an educational resource and guidance document,” stated PLB

“This document is also intended to prepare and position the port and its stakeholder for adopting low carbon alternative fuels.

“The white paper provides high level information on the array of currently available low carbon marine fuels, along with an exploration of the potential infrastructure needs for their deployment.”

The document covers the use of different types of clean bunker fuels such as green hydrogen, green methanol, green ammonia, renewable LNG and biofuels for shipping.

“The shift to clean marine fuels is no longer optional but a necessity for the sustainability of the maritime industry,” stated PLB in its closing remarks.

“This transition, while presenting challenges such as high costs, limited fuel availability, and the need for extensive infrastructure development, is advancing due to evolving policy frameworks and growing industry commitment.

“Addressing these obstacles will require targeted initiatives and robust collaboration between public and private sectors. Continued policy support, government funding, and sustained industry commitment will be essential to driving this progress and ensuring the long-term sustainability of maritime operations.”

Editor’s note: The 123-page Clean Marine Fuels White Paper may be downloaded from the hyperlink here.

 

Photo credit: Clean Marine Fuels White Paper
Published: 26 December 2024

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Port & Regulatory

Clyde & Co: FuelEU Maritime Series – Part 6: Legal issues

Bunker purchasers should consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

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CHUTTERSNAP MT

Global law firm Clyde & Co on Thursday (19 December) released the final instalment of its six-part series uncovering the FuelEU Maritime Regulation.

In it, the firm looked at the legal issues that could potentially arise between various parties, such as owners, charterers, ship managers, bunker suppliers, and ship builders, as a result of the compliance requirements imposed by the Regulation.

The following is an excerpt from the original article available here:

Bunker supply contracts - legal issues

Both vessel owners and bunker purchasers will want to ensure that they are able to take advantage of the preferential treatment provided under the FuelEU Regulation for consuming renewable fuels, including biofuels and renewable fuels of non-biological origin (RFNBOs) (such as methanol and ammonia).

Article 10 of the FuelEU Regulation states that such fuels must be certified in accordance with the Renewable Energy Directive (RED) 2018/2001. If the fuel consumed by the vessel does not meet the applicable standards or have the appropriate certification, then it “shall be considered to have the same emissions factors as the least favourable fossil fuel pathway for that type of fuel[1].

In order to confirm that the fuel complies with greenhouse gas (GHG) intensity and sustainability requirements, the vessel owner and bunker purchaser will want to ensure that the bunker supplier provides the appropriate certification required under the FuelEU Regulation. The EU has required certification of such fuels, with the aim of guaranteeing “the environmental integrity of the renewable and low-carbon fuels that are expected to be deployed in the maritime sector.”[2]

The FuelEU Regulation provides that the GHG intensity of fuel is to be assessed on a “well-to-wake” basis, with emissions calculated for the entire lifespan of the fuel, from raw material extraction to storage, bunkering and then use on board the vessel.

Vessel owners and bunker purchasers will, therefore, need to be mindful of the importance of establishing how “green” the fuel actually is, and of the risk of bunker suppliers providing alternative fuels that will not allow for preferential treatment under the FuelEU Regulation.

It would, therefore, be advisable for bunker purchasers to consider whether the wording of their bunkering supply contracts is sufficient to ensure that the fuel is properly certified under the FuelEU Regulation. This could include contractual provisions that require the supplier (i) to provide a bunker delivery note (BDN), setting out the relevant information regarding the supply (such as the well-to-wake emission factor), and (ii) to provide the necessary certification under a scheme recognised by the EU.

Bunker purchasers should also be mindful that bunkering supply contracts often contain short claims notification time bars and provisions restricting claims for consequential loss. Issues could therefore arise where a purchaser tries to advance a claim against the supplier for consequential loss due to a lack of certification, but the bunker supplier argues that such losses are excluded under the terms of the bunker supply contract.

Bunker purchasers should therefore consider the wording of their bunker supply contracts carefully and ensure that they are comfortable with the contractual provisions.

 

Photo credit: CHUTTERSNAP from Unsplash
Published: 26 December 2024

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