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Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

Singapore can help less developed countries in SouthEast Asia through ‘piloting and scaling fuels and technology as well as a leading hub for green finance’, said DNV Group President and CEO Remi Eriksen.

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Editor's Note: The full recording of the Singapore Energy Transition Conference can be found here.  

Singapore will be an important “flywheel of change and innovation” to accelerate the energy transition, moving faster than others to reach net zero far ahead of 2050 by maturing key technologies and fuels to spur decarbonization.

At the Singapore Energy Transition Conference, which took place on 23 June 2022, DNV Group President and CEO Remi Eriksen drew attention to the key findings in its Pathway to Net Zero Emissions report. This sees CO2 emissions in the South-East Asian region reduce from 1.7 Gt in 2019 to 0.34 Gt in 2050, driven by the rapid penetration of renewables and reductions in fossil fuel use.[1]

He put Singapore in the same category as other highly industrialized regions – Europe, North America, Japan and Korea – which “need to get to carbon negative as fast as possible.”

Mr Eriksen also sees where Singapore can help less developed countries in the region through “piloting and scaling fuels and technology, as well as a leading hub for green finance.”

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

In response to questions from conference moderator Yvonne Chan, he pointed out that DNV modelling shows energy demand in South-East Asia will level off around 2050, but “we forecast a peak in CO2 emissions already by 2030, thanks to better energy efficiency.”

While he admitted that it was not feasible “to completely chase fossil fuels out of the global energy mix in the next 28-30 years,” the DNV Pathway report sees “a huge build out of carbon capture and storage (CCS), direct air capture, and nature-based solutions, to deal with those remaining emissions.”

“Once fossil fuels are fully eliminated from the world’s energy system, we at DNV see the ideal energy mix being 70% direct electrification with renewables and nuclear, 20% indirect electrification via hydrogen and hydrogen-derived products, and 10% biofuels,” Mr Eriksen told the 200 conference delegates present at Suntec Convention Centre, with many hundreds more following the event broadcast online.  

Hydrogen can decarbonize hard to abate sectors

He sees that hydrogen “is critical for decarbonizing the so-called hard to abate sectors”, like high heat industrial processes, long-distance trucking, shipping, and aviation, referencing DNV’s Hydrogen forecast to 2050.[2] 

He added that the intercontinental trade of hydrogen will be almost exclusively in the form of ammonia, the hydrogen carrier, which “is much safer and more convenient to transport” and some 60% of energy-related ammonia will be traded between regions by 2050. 

“Hydrogen, which is the lightest of substances, needs a heavy lift from all of us in this room if we are to have any hope of reaching the Paris targets,” Mr Eriksen emphasized. “In fact, dramatic and urgent changes are needed in all energy value chains, with much smarter end-use enabled by digitalization.”

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

Other speakers and panellists at the Energy Transition conference reinforced the importance of hydrogen.

Jonathan Goh, External Relations Director from the Energy Market Authority (EMA), reported that Singapore also sees hydrogen playing an important role in power generation, as a fuel for industry and transport, including shipping and aviation.  

He referenced the recent Energy 2050 report, which reinforced that Singapore needs to diversify its energy supply and push ahead to develop renewable energy (electricity) imports, hydrogen, solar, and Energy Storage Systems (ESS), while keeping its options open to leveraging new low-carbon alternatives and international carbon markets. 

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

Higher penetration of renewables in regional energy mix

Brice Le Gallo, Regional Director for Energy Systems, APAC for DNV, led the way in the first panel on “SEA’s Pathway to Net Zero” by stressing that electrification will grow to play the most prominent role, with a much higher penetration of renewables in the regional energy mix, stating that “we need to start now!”

When asked to elaborate on whether Russia’s invasion of Ukraine might impact the energy transition, he referenced the DNV report (published on 6 April 2022) “The Ukraine war will not derail Europe’s energy transition.” This pointed to a small acceleration of decarbonization and emission reduction – from increased energy efficiency and lower economic growth – along with a faster renewables buildout.[3]

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

For South-East Asia, Mr Le Gallo sees this helping to create greater diversification of energy sources and advancing domestic production to counter energy security issues, at the same time supporting the drive to renewable energy. 

ACEN CEO Eric Francia said his company – a member of Philippines’ Ayala Corporation – has already committed to the early retirement of its remaining coal plants and has vowed to transition its generation portfolio to 100% renewable energy by 2025.

He told the conference that there needs to be more investment in battery storage in the region to make the most of renewable energy supply coming onstream and he also drew attention to the importance of nature-based solutions, as a means to help reduce greenhouse gas emissions. 

Besides welcoming the move to hydrogen and Carbon Capture Utilisation and Storage (CCUS), Ms Fauziah Marzuki, Head of APAC Gas Power & Carbon at BNEF, advocated looking seriously at Direct Air Capture, a climate technology that effectively sucks CO2 out of the air and puts it to good use.

Business entrenches sustainability in hybrid energy system 

Another panellist, Tan Wooi Leong, Senior Director for Energy and Industrial at Surbana Jurong, said it was important to “entrench sustainability” while decarbonizing all sectors of the business. It’s also inherent to adopt hybrid energy systems, incorporating solar, wind, hydro and any other renewable source, to meet the optimization challenge.      

Dannif Danusaputro, CEO PT Pertamina Power Indonesia, pointed out that while his country has sizeable renewable energy sources, like geothermal and hydro, which have yet to be fully tapped, key priorities are to decarbonize the energy grid, introduce hydrogen into the mix, and utilize CCUS technology as much as possible.

Mr Ariff Adry Adnan, Head of Business Development, Petronas Hydrogen, told the conference that Malaysia’s leading oil and gas company has just unveiled a new entity, Gentari, to accelerate the adoption and commercialization of clean energy. 

He said it would focus on renewable energy, hydrogen, and green mobility solutions, stressing that it was important to capitalize on available technologies and talent to achieve greater scale and pace of change. 

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

Advancing maritime decarbonization at home and abroad

In the second panel of the day, which focussed on Maritime decarbonization, Datuk Yee Yang Chien, President and CEO of the MISC Group, confirmed that his company was committed – as a founding member of the Castor Initiative – to the development and construction of two very large crude carriers (VLCC). Designed for the use of green ammonia as a propulsion fuel, the first of these dual-fuel tankers would enter into service in late 2025 and the second in early 2026.

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

He also reinforced that much more needs to be invested for decarbonization and the energy transition to net zero to be achieved in a timely fashion. 

Professor Lynn Loo, CEO of the Global Centre for Maritime Decarbonisation (GCMD), provided an update on the progress of the ammonia safety study in Singapore – being led by a DNV consortium, with Surbana Jurong and Singapore Maritime Academy – which she says is “on track” and results will be “shared with the world” in the first quarter of 2023. 

She also told the audience that besides the testing and adoption of zero carbon fuels, including biofuels, the maritime industry needs to control methane leakage and work on greater energy efficiency for ships at sea and in port. 

Energy efficiency reduces carbon intensity of existing vessels 

Cristina de Santa Maria, Regional Manager South East Asia, Pacific and India, Maritime for DNV, also reinforced the importance of energy efficiency for the industry, as a means to reduce the carbon intensity of existing fleets of ships. She pointed to four measures which can be taken up now:

  • Fuel refits, including the option for ships to get converted to take multiple alternative fuels;
  • Energy saving devices, enabling vessels to gain a 10% to 15% reduction in fuel consumption;
  • Optimizing fleet operations, including weather routing and port call management, enabled by digitalization;
  • CO2 abatement through on board CCUS, which can give LNG a longer lifespan.

She also stressed how important it is to collaborate across all disciplines and sectors:

“We shouldn’t see decarbonization as a race or competition, but rather a team sport. We win or lose together. Collaboration is the true future fuel.” 

DNV Opportunity for Singapore to accelerate the energy transition as the flywheel of change and innovation

The fourth member of the panel discussing “Maritime Decarbonization – from Pilots to Scale” was Tat Win Law, Singapore Country Chairman for Chevron, who summed up by drawing attention to three P’s: pilots, partnerships and policies. 

He mentioned that globally his company is already embarking of what it calls Chevron New Energy and in Singapore it is taking a pragmatic approach to the energy transition, which included joining GCMD. 

But ringing in the minds of all delegates – in person or online – must have been the words of Mr Eriksen who prefaced the panel discussions by saying: “The serious push to net zero means that the ASEAN energy co-operation will need to lift its ambitions considerably. 

“That means tough policy, but also a huge amount of opportunity for far sighted businesses – in hydrogen, ammonia, and CCS. 

“I have no doubt that Singapore will be an important flywheel of change and innovation.”

[1] Pathway to Net Zero DNV: https://eto.dnv.com/2021/about-pathway-to-net-zero
[2] Hydrogen Forecast to 2050: https://www.dnv.com/focus-areas/hydrogen/forecast-to-2050.html
[3] DNV report on the impact of Russia’s war on the energy transition: “The Ukraine war will not derail Europe’s energy transition”.

 

Photo credit: DNV
Published: 29 June, 2022

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Alternative Fuels

IUMI: How can liability and compensation regimes adapt to alternative bunker fuels and cargoes?

Existing international liability and compensation regimes do not fully cater to the changes that the use of alternative marine fuels will bring.

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Dangerous cargo

By Tim Howse, Member of the IUMI Legal & Liability Committee and Vice President, Head of Industry Liaison, Gard (UK) Limited

The world economy is transitioning, with industries across the board seeking to reduce their carbon footprint and embrace more sustainable practices. As part of this, there is a huge effort within our industry to look to decarbonise, using alternative fuels such as biofuel, LNG, LPG, ammonia, methanol, and hydrogen.

Until now there has been much focus on carbon emissions and operational risks associated with the use of alternative fuels. This includes increased explosivity, flammability, and corrosivity. An ammonia leak causing an explosion in port could result in personal injuries, not to mention property damage, air, and sea pollution. In addition, alternative fuels may not be compatible with existing onboard systems, increasing the risk of breakdowns and fuel loss resulting in pollution. Apart from these safety concerns, which particularly concern crew, air pollution and other environmental impacts need to be addressed.

However, the green transition also presents us with a separate regulatory challenge, which has received less attention so far. So, whilst carbon emissions and safety concerns are rightly on top of the agenda now, the industry also needs to prioritise the potential barriers in the legal and regulatory frameworks which will come sharply into focus if there is an accident.

If anything, historic maritime disasters like the Torrey Canyon spill in 1967, have taught us that we should look at liability and compensation regimes early and with a degree of realism to ensure society is not caught off-guard. With our combined experience, this is perhaps where the insurance industry can really contribute to the transition.

Currently, existing international liability and compensation regimes do not fully cater to the changes that the use of alternative fuels will bring. For example, an ammonia fuel spill would not fall under the International Convention on Civil Liability for Bunker Oil Pollution Damage (Bunkers Convention), potentially resulting in a non-uniform approach to jurisdiction and liability. Similarly, an ammonia cargo incident would not fall under the International Convention on Civil Liability for Oil Pollution Damage (CLC). Uncertainties may also exist in the carriage of CO2 as part of Carbon Capture and Storage (CCS) projects, which may be treated as a pollutant, with corresponding penalties or fines.

A multitude of questions will arise depending on what happens, where it happens, and the values involved, many of which may end up as barriers for would be claimants. How will such claims be regulated, will there be scope for limitation of liability, and would there be a right of direct action against the insurers? In the absence of a uniform international liability, compensation and limitation framework, shipowners, managers, charterers, individual crew, and the insurers may be at the mercy of local actions. Increased concerns about seafarer criminalisation (even where international conventions exist, ‘wrongful’ criminalisation does still occur) may emerge, creating another disincentive to go to sea.

When being carried as a cargo, the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea (HNS), which is not yet in force, may resolve some of these issues for alternative fuels and CO2. However, until HNS comes into force, there will be no international uniformity to liability and compensation for the carriage of alternative fuels and CO2 as cargoes. This creates uncertainties for potential victims and their insurers, who may face increased risks and costs, due to the potential inability of existing regulations to provide protections.

The situation is even less clear in the case of bunkers. The rules for using alternative fuels as bunkers might require a separate protocol to HNS, a protocol to the Bunkers Convention, or a whole new convention specifically for alternative fuels.  Relevant considerations for the appropriate legislative vehicle include states’ preparedness to reopen the Bunkers Convention, the ability to conclude a protocol to HNS before it comes into force, and whether a multi-tier fund structure is needed for alternative fuels as bunkers (perhaps unnecessary because bunkers are usually carried in smaller quantities compared to cargoes).

Until then, what we are left with are the existing international protective funds, designed to respond at the highest levels to pollution claims resulting from an oil spill, without any similar mechanism in place to respond to a spill of alternative fuels, which are themselves so central to a green transition. Somewhat perversely, victims of accidents involving an oil spill may therefore enjoy better protections than victims of an alternative fuels spill.

In summary, while the use of alternative fuels will no doubt help to reduce the industry's carbon footprint, there are safety and practical hurdles to overcome. Stakeholders must also come together to find solutions to complex - and urgent, in relative terms - legal and regulatory challenges.

 

Photo credit: Manifold Times
Source:  International Union of Marine Insurance
Published: 13 June 2024

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Ammonia

Expert discusses technical considerations of using ammonia as marine fuel

Ammonia as bunker fuel poses significant safety challenges due to its toxicity and flammability, says Senior Marine Surveyor Muammer Akturk.

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Technical considerations of ammonia as marine fuel

Muammer Akturk, a Senior Marine Surveyor specialising in alternative bunker fuels, on Monday (10 June) published an article on technical considerations of using ammonia as a marine fuel in his Alternative Marine Fuels Newsletter.

The article dives into the use of ammonia as a marine fuel, focusing on the safety and technical considerations necessary for its implementation.

Ammonia is recognised for its potential as a zero-carbon fuel, making it an attractive option for reducing greenhouse gas emissions in the shipping industry. However, it poses significant safety challenges due to its toxicity and flammability.

Key points discussed include:

  1. Safety Measures: The importance of stringent design and operational safety measures to prevent ammonia releases and mitigate risks during both normal and emergency conditions is emphasized. This includes the need for gas dispersion analyses and the use of safety systems like gas detectors and alarms
  2. Regulatory Framework: The article reviews the latest regulations and guidelines developed to ensure the safe use of ammonia as a marine fuel. This includes the IACS Unified Requirement H1, which provides a framework for controlling ammonia releases on vessels
  3. Engineering Considerations: Technical aspects such as fuel storage, handling systems, and the role of risk assessments in identifying potential hazards and implementing preventive measures are detailed
  4. Human Factors: The article also considers the human factors approach to safety, emphasizing training and the importance of designing systems that account for human errorOverall, the article aims to provide a comprehensive overview of the challenges and solutions associated with using ammonia as a marine fuel, highlighting the importance of safety and regulatory compliance in its adoption.

Editor’s note: The full article can be found at the link here.

 

Published: 13 June 2024

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Methanol

Green Marine Fuels Trading, Vopak team up on green methanol port storage facilities

Green Marine Fuels revealed a strategic collaboration with Vopak to secure necessary port storage to accommodate green methanol supply in Shanghai, Tianjin and later in Singapore.

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Green Marine Fuels Trading, Vopak team up on green methanol port storage facilities

Green Marine Fuels Trading on Tuesday (11 June) announced a strategic collaboration with Royal Vopak Terminals in the key ports of Shanghai Caojing and Tianjin Lingang, China. 

The firm said the milestone agreement marked the next phase of methanol supply chain infrastructure expansion for Green Marine Fuels Trading, securing necessary port storage capacity to accommodate projected supply of green methanol from Chinese business partners.  

Green Marine will be undertaking a similar cooperation plan with Vopak Singapore as well. 

Gavin McGrath, Director at Green Marine, said: “This is an important milestone in the evolution of Green Marine Fuels Trading and further underscores our preparedness to supply green methanol to the imminent green transition within the shipping industry.” 

“Our leadership in the global methanol marine fuel sector uniquely positions us to bridge the gap between methanol producers and buyers, with storage and supply infrastructure being a crucial link in the chain.”

“We eagerly anticipate leveraging our expertise in these domains to enrich the Shanghai and Tianjin green port and marine fuel ecosystems.”

Manifold Times previously reported Vopak signing a strategic cooperation agreement with the Vice Mayor of Tianjin delegation to support the repurposing of Vopak Tianjin's infrastructure for new energies, including green methanol, sustainable aviation fuel, and potentially ammonia and liquid organic hydrogen carriers (LOHC).

Vopak said Tianjin Port Group will work closely with Vopak to develop a green methanol bunkering service solution.

Related: Tianjin Port Group and Vopak partner to develop green methanol bunkering service

 

Photo credit: Green Marine Group
Published: 12 June 2024

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