Bunker Fuel

Reed Smith conducts survey on future of sustainable fuels in transportation sector

Survey found that cost of sustainable energy and inadequate supply chain infrastructure are considered the biggest barriers to transitioning to sustainable fuels in next five to 10 years.

Published

7 months ago

June 27, 2024

Admin

The cost of sustainable energy and inadequate supply chain infrastructure are thought to be the biggest barriers to transitioning to sustainable fuel sources, according to transportation industry professionals who took part in a survey spearheaded by global law firm Reed Smith

Perspectives and predictions were gathered from 47 of Reed Smith’s clients across the transportation sector, comprising companies across the globe, working in aviation, shipping, logistics, manufacturing, utilities, and environmental services.

Key findings from the survey (respondents were able to select more than one option for some questions):

Almost half of respondents believe that it would take more than 15 years for transportation to be powered by 100% sustainable fuel sources.
Nearly half of respondents cited dual fuel and LNG as the most likely to be used as a transitional fuel in the next 3-5 years.
Cost and regulatory restrictions are the biggest factors affecting respondents use of sustainable fuel sources.
Over a third of respondents stated that both the cost of sustainable energy and inadequate infrastructure in the supply chain would be the biggest barriers to transitioning to sustainable fuel sources in the next 5-10 years.
One third of respondents cited uncertainty in interpreting/ensuring compliance with new or complex regulations as their key worry in transitioning towards sustainable fuel sources.
Over a third of respondents stated that both the cost of sustainable energy and inadequate infrastructure in the supply chain would be the biggest barriers to transitioning to sustainable fuel sources in the next 5-10 years.
Nearly half of respondents cited biofuel and green hydrogen as the two key sustainable fuel sources they would consider having the most potential for widescale application in the transportation sector.

Thor Maalouf, a Reed Smith partner who advises on all aspects of commercial shipping and maritime law, said: “It is unsurprising that our respondents had more confidence in green biomass derived fuels rather than ‘blue’ fuels.”

“The outlook for likely future regulatory treatment of ‘blue’ fuels, which are created artificially using electricity or other power generated from sustainable sources, is less clear than treatment for green or biomass-derived fuels which have a clearer low-carbon footprint.”

Reed Smith transportation partner Nick Austin commented on the findings that cost and regulatory restrictions are the biggest factors affecting the use of sustainable fuel sources.

He explained: “It is no surprise that costs and regulatory restrictions are cited in the survey as the main factors affecting take up of sustainable fuel.”

“This reflects our experience in maritime decarbonisation, where companies are facing new costs, such as EU ETS, and a range of other initiatives such as the IMO’s Carbon Intensity Indicator (CII) which impose both an administrative and economic burden on vessels to reduce emissions.”

“The reality is that a fundamental change in marine fuels will inevitably require both higher cost and new regulation.”

Austin added: “Alongside cost, our respondents are right to highlight that inadequate infrastructure presents a barrier to the widespread adoption of sustainable fuel. Our clients tell us this frequently and are concerned at the lack of commitment from global governments to support the new infrastructure critical to sustainable fuel coming to market. That will require considerable investment in ports and other land-based facilities at a time of economic uncertainty in many places.”

Antonia Panayides, Reed Smith transportation partner, noted the significant transformations witnessed in the industry over the past decade, propelled by technological advancements, regulatory shifts, and environmental objectives. The impact of events like the global pandemic and geopolitical dynamics have underscored the imperative for foresight and adaptability.

Emphasising the ongoing dialogue around future fuel options, Panayides remarked, “Identifying the best solution, taking into account factors such as cost, safety, storage, and scalability, poses a significant challenge.”

“Therefore, we decided to engage directly with our clients, who are deeply immersed in these issues, to gain insights into their forecasts, perspectives, and to understand the biggest challenges they face.”

Photo credit: Venti Views on Unsplash
Published: 27 June, 2024

Related Topics:Business - Events Port & Regulatory - Decarbonisation

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Bunker Fuel

China: Zhoushan Port achieves 7.26 million mt annual bunker volume for 2024

Zhoushan Hi-Tech Zone Administrative Committee highlighted the progress Zhoushan Port has made in the past year including actively planning to build an alternative fuel bunkering centre.

Published

1 day ago

January 14, 2025

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China: Zhoushan Port achieves 7.26 million mt annual bunker volume for 2024

Zhoushan Hi-Tech Zone Administrative Committee on Friday (10 January) said Zhoushan, the fourth largest bunkering port of the world, delivered 7.26 million metric tonnes (mt) of marine fuel in 2024.

This marked about a 3% increase from 7.04 million mt in 2023.

The committee also highlighted the progress Zhoushan Port has made in the past year including actively planning to build an alternative fuel bunkering centre.

It has successfully obtained approval for the national biodiesel promotion and application pilot project. The construction of a project to produce an annual 1 million mt of marine biodiesel has begun.

The first methanol vehicle-to-ship pilot was carried out, and the first methanol bunkering barge in Zhoushan was officially built and is expected to be put into use by the end of 2025.

The port has also improved the fuel supply efficiency of various bunkering anchorages in Zhoushan including Tiaozhumen Anchorage adding three bunkering anchorages on top of the original five and has successfully carried out night bunkering operations.

Xiushandong and Mazhi anchorages have added a total of three new bonded bunkering anchorages, which can implement all-weather and fully automatic anchorage reservations, and provide advance reservations and priority refueling services for large ships and large orders.

The committee also highlighted Dong Fang Zhao Yang becoming the first domestic bunkering barge to obtain the mass flow meter system certification under the ISO22192:2021 standard. The barge conducted a successful pilot for the bunkering of bonded fuel oil using a mass flow meter at Xiushandong Anchorage on 9 December.

A spokesperson of the committee said Zhoushan will focus on promoting alternative bunker fuels such as biofuel and LNG and accelerating the completion of methanol refuelling safety assessments.

Photo credit: Zhoushan Hi-Tech Zone Administrative Committee
Published: 14 January, 2025

Bunker Fuel

Argus Media: Singapore bunker prices rise to multi-month highs

VLSFO prices on a delivered basis in Singapore jumped by $16.7/t to $590.72/t, the highest since 24 October 2024; HSFO prices jumped by $34.67/t to $507.67/t dob, the highest since 26 July 2024.

Published

1 day ago

January 14, 2025

Admin

Bunker fuel prices in the port of Singapore touched multi-month highs today, supported by a rally crude futures.

13 January 2025

Ice Brent Singapore crude reached $81.23/bl by close of trading in the port city, following the announcement of sweeping sanctions by the US administration on Russian energy exports. Shipowners and bunker buyers in Singapore were cautious about procurement given the elevated prices. Many pushed back their bunker buying, preferring to monitor near-term market developments.

Very-low sulphur fuel oil (VLSFO) prices on a delivered basis in Singapore jumped by $16.7/t to $590.72/t, the highest since 24 October 2024. Deals concluded by 19:00 Singapore time had touched $599/dob and could breach $600/t in the coming days if strength in the energy complex continues.

"Market is firm… I would not dare to fix anything today," a ship owner said, adding that "buyers should be very careful" when making procurement decisions. Another vessel owner said its earliest VLSFO bunker requirement would be for delivery from 26 January, and it was not looking to trade at the moment.

"It is very difficult to know how things will proceed, but think it might move higher," said a UK-based bunker trader.

VLSFO supply availability is limited, which could further support upward movement in prices in the coming days.

High sulphur fuel oil (HSFO) prices jumped by $34.67/t today to $507.67/t dob, the highest since 26 July 2024. Marine gasoil (MGO) prices were at a six-month high $731/t dob in Singapore, up by $30/t from the previous session.

The upside in crude futures was reflected in marine biodiesel prices, with B24 rising in Singapore. B24, which is a blend of 24pc used cooking oil methy ester (Ucome) and 76pc VLSFO, were assessed by Argus$14-15/t higher at $721-726/t dob.

Traders said B24 prices will follow the trend in VLSFO cargo prices, but spot liquidity may remain thin.

"Today people are still trying to figure out what right value is," said a key shipowner and trader, adding that prices could rise further this week.

By Mahua Chakravarty and Cassia Teo

Photo credit and source: Argus Media
Published: 14 January, 2025

Business

Singapore-based EPS to invest in SulNOx, adopt fuel conditioner on at least 30 vessels

EPS will adopt SulNOxEco on a minimum of 30 vessels for a minimum of 18 months use per vessel following an extensive eight-month successful evaluation of SulNOxEco on various EPS-managed vessels.

Published

1 day ago

January 14, 2025

Admin

Singapore-based EPS to invest in SulNOx, adopt fuel conditioner on at least 30 vessels

Maritime green tech firm SulNOx on Monday (13 January) said it has signed an agreement with Singapore-based Eastern Pacific Shipping, which encompasses both investment into SulNOx and a major new product supply contract for its SulNOxEcoTM fuel conditioner (SulNOxEco).

The agreement follows an extensive eight-month successful evaluation of SulNOxEco on various EPS-managed vessels including container ships, tankers, bulk and gas carriers. EPS Ventures Pte. Ltd. (EPSV) will also become a strategic shareholder in SulNOx.

Under the agreement, EPS, which manages a diverse fleet of over 300 vessels on water and on order, will adopt SulNOxEco on a minimum of 30 vessels for a minimum of 18 months use per vessel.

EPS will also provide information in relation to the results of the evaluation, which the Company will be able to use in its marketing activities, along with the ongoing support of EPS.

In addition, EPS will also collaborate with and act as an introducer for SulNOxEco, to some of the world’s largest shipping companies. The agreement itself will generate significant revenue and secure committed minimum product volumes of 250,000 litres. Further, the Board anticipates attracting additional customers and driving substantial further revenue growth.

Cyril Ducau, Chief Executive Officer of EPS, said, “This partnership with SulNOx is a significant step towards achieving EPS’s long-term sustainability objectives. By enhancing our operational efficiency and reinforcing our commitment to meeting global environmental standards, this collaboration further solidifies our position as a proactive leader in sustainable shipping practices.”

Radu Florescu, Chairman of SulNOx, said, “Signing the marquee shipping name of EPS after an extensive evaluation period proves the effectiveness of SulNOx products beyond doubt at a time when the industry is crying out for solutions to reduce fuel consumption and associated emissions against a backdrop of increasing regulation.”

“With this partnership, not only have we secured substantial, committed revenues, but there is also significant additional potential revenue from EPS’ introductions to some of the world’s largest fleets. This transaction marks a new and transformative era for the SulNOx Group, and we look forward to a long and mutually beneficial partnership with EPS, delivering the energy transition together.”

Photo credit: SulNOx
Published: 14 January, 2025