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Alternative Fuels

Sea Commerce: ‘Why the time has come for Methanol as a marine fuel’

Organises its 15th global seminar on methanol as a marine fuel with support of the Association of Turkish Coaster Owners & Operators and sponsorship by Methanol Institute in Istanbul on 7 March.




istanbul seminar mar 7th 2023

Sea Commerce organized its 15th global seminar on methanol as a marine fuel with the support of the Association of Turkish Coaster Owners & Operators (KOSDER) and sponsorship by the Methanol Institute in Istanbul on 7 March 2023.

The event provided an update on the uptake of methanol as a marine fuel and its growing acceptance by shipowners. With technological and regulatory challenges associated with methanol as a marine fuel largely resolved, orders for 23 dual fuel/methanol-powered ships have been ordered in February bringing the orderbook to 106 ships.

Mrs Pinar Kalkavan Sesel, Chairperson of KOSDER, highlighted the new regulations impacting on the maritime industry:

“These regulations have come into effect as emissions from ships, which increase in line with the demand for maritime transport have increased. The aim of these regulations passed by the International Maritime Organization (IMO) to reduce the growth of emissions rate within set timescales puts the maritime sector into a serious adaptation process.”

Methanol, which is frequently described as one of the most mature alternative marine fuels, is also promising to be the marine fuel of the future. Methanol has been in the maritime industry for more than a century and safely carried as a cargo for decades. Only lately has it been seen as the ideal fuel for the maritime industry to help meet the IMO's carbon emissions and intensity reduction goals by 2050.

The seminar also highlighted the efforts that the maritime sector is making on an international scale to operate sustainably thereby helping to decrease adverse climate events which have many negative social, environmental and industrial impacts.

Mrs Pinar Kalkavan Sesel thanked Capt. Alavi for facilitating KOSDER’s participation at the event. This was the 15th methanol awareness event organized by Sea Commerce. Earlier, at the start of the seminar, the organizers and participants paid their respects to those who died or suffered from the terrible earthquake and prayed for them and the welfare of those who survived.

International Maritime Organization regulations on handling methanol are well developed within the IGF Code and the Methyl/Ethyl Interim Guidelines. Still to come could be rules for methanol bunkering and standards for fuel quality.

While revisions to the IMO’s 2050 targets are still currently being debated, it is widely agreed that a full life cycle approach will be taken when evaluating the GHG performance of future fuels. This is expected to lead methanol production towards recycled carbon feedstocks and generation technologies that involve renewable energy.

Taking a lifecycle approach that includes Scope Three emissions including the energy necessary to create the hydrogen from which methanol is produced, e-methanol does have a carbon footprint but it is about 20 times less than marine gasoil, LNG, or methanol produced from natural gas, and about three times less than green methanol produced from biomass.

Today, methanol made from natural gas offers a lifecycle greenhouse gas reduction of 5%- 15% compared to diesel as well as immediate reductions in sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter.

Methanol offers a 2% lower fuel consumption per kWh than diesel fuel, and engine corrosion and fuel slip are not an issue due to the high combustion rate achieved by engine designers. 

MAN Energy Solutions is among those who believe that Methanol is one is one of the most viable pathways for decarbonizing shipping as it can provide carbon neutrality when produced from renewable energy in connection with biogenic CO2.

A study conducted by Imperial College London Consultants (October 2021) on European biomass availability concludes that “the potential availability of sustainable biomass, with no harm to biodiversity, could support an advanced and waste-based biofuel production of up to 175 Mtoe in 2050. In other words, European sustainable biomass alone could more or less support the global marine requirement of 178mt for biomass.”

istanbul seminar mar 7th 2023

Currently, Methanol mostly in conventional form is available in over 100 ports globally.

The Methanol Institute, in discussing the European Union’s 'Fit for 55', measures aimed at reducing 55% of carbon emissions by 2030, suggested that the revision of electricity market could positively impact e-methanol availability with 10bn liters or 8m tonnes per year potentially available by 2027.

Wartsila, with 10 years’ experience of methanol engine development and operation, felt that “The technology is robust and proven in the marine environment with excellent performance”. Proof of concept remains Stena Germanica -the first non-tanker methanol powered vessel which was converted in 2015 with Wärtislä Sulzer ZA40S engines and continues to perform without any issues.

A large dual-fuel two-stroke engine running on methanol could cost up to $4m more on a newbuilding and up to U$9m more for retrofit (assuming the parent engine cost is about US$4-5 million, based on figures from MAN Energy Solutions.

These costs are partially mitigated because the engine can be Tier III compliant without the need for an exhaust gas recirculation system (US$1m) or a selective catalytic converter (US$1m). The need to continually run air compressors to support these after-treatment systems adds further to their cost.

Experience to date has shown that operating a dual-fuel methanol engine can add about 5% to Opex due to training and maintenance. However the technology behind using Methanol as a fuel is well proven and has been in service since 2016. Combined with the fact that no cryogenic equipment is needed and the supply pressure is only 13 bar.

Uzmar Shipbuilding expressed the view that the main challenge in designing a methanol powered tugboat was to accommodate various equipment in very limited space onboard. This was achieved with combination of guidance from the classification society and designers experienced on alternative fuel applications.

There are STCW training requirements for crews — basic IGF Code training for seafarers and advanced training for masters and engineers. In addition, MAN ES recommends proprietary training on its ME-LGIM engine.

Sea Commerce focused on the bunkering aspect of the methanol supply chain. Unlike the competing cryogenic fuels (LNG, Ammonia, and Hydrogen) where a completely new bunkering infrastructure setup is required, methanol bunkering is similar to existing LSFO/MGO bunkering operation with very minor, low cost modifications necessary to existing bunkering delivery infrastructure including trucks and barges.

For example; a cost of the LNG bunkering ship of 7500 CuM (abt 3400 ts) costs run close to US$38-40 million compared to methanol bunkering vessels where the cost for a 3,000 tonnes (3,000cum) are about US$8-10 million (based on China shipyard prices). It is also feasible to convert an existing Type three tanker already employed as a bunkering vessel to methanol supply, at a cost US$0.5-1m depending on the region or area where the conversion is done.

Sea Commerce approached The Indian Register of Shipping (IRClass) to undertake a gap analysis on the conversion of existing bunkering vessels to partially or fully carry methanol and what is required to comply with SOLAS and IBC Code requirements. The presentation reflected a detailed analysis of converting an existing 5,000t (Type 3) bunkering vessel.

Speakers at the seminar “Rise of Methanol as a Future Proof Marine Fuel” were Rafik Ammar, Public and Govt. Affairs EU at Methanol Institute; Dagfinn Lunde, Partner at DAGMAR; Elif Ceren Gülcek, Board member at Turkish Shipyard Association (GISBIR); Vijay Arora, Managing Director at Indian Register of Shipping; Prof. Dr. Mustafa İnsel, Business Development Manager at Hidroteknik Nautical Design Ltd; Nalan Erol, Shipyard R&D Leader at UZMAR Shipyard; Toni Stojcevski, General Manager Large Projects at Wartsila; Pavel Chernyshov, Co-Founder/Partner at Arkview Capital; Jorgen Vedsted, Manager, Sales & Promotion at MAN Energy Solutions and Saleem Alavi, President, Sea Commerce America.

The event was moderated by Mustafa Murtahoglu, Partner at Energy Petrol and Constantine Orphanos, Sales and Purchase at Oceanus Tankers.

Captain Saleem Alavi is president of Sea Commerce America


Photo credit: Sea Commerce
Published: 13 April, 2023

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LNG Bunkering

Singapore: Pavilion Energy supplies LNG to TFG Marine dual-fuel bunker tanker

“MT Diligence” was refuelled with 34 cubic metres of LNG bunker fuel, supplied by Pavilion Energy, marking the first LNG bunkering of TFG Marine’s bunker vessel.





Singapore: Pavilion Energy supplies LNG to TFG Marine bunker tanker

Global marine fuel supply and procurement firm TFG Marine on Monday (20 May) announced the completion of the first liquefied natural gas (LNG) refuelling of its dual-fuel bunker tanker MT Diligence this week in Jurong Port, Singapore.

The 34 cubic metres (m3) of LNG to power the MT Diligence was supplied by the Marine division of Singapore-headquartered Pavilion Energy. 

“Deploying a vessel that can be powered by LNG as well as conventional low sulphur marine fuels helps TFG Marine to meet its licence requirement with the Maritime and Port Authority of Singapore (MPA),” TFG Marine said in a social media post.

Singapore: Pavilion Energy supplies LNG to TFG Marine dual-fuel bunker tanker

“Built and operated for TFG Marine by CBS Ventures Pte Ltd, the 5,000 dwt MT Diligence has been designed to our technical specifications, including stringent safety considerations and has joined our supply fleet this year in the major bunkering centre of Singapore.”

Manifold Times previously reported TFG Marine christening the first LNG dual-fuel bunker tanker to join its fleet.  

The newbuild vessel, MT Diligence, has joined the company's low sulphur fuel oil and biofuel supply operations in the major bunkering centre of Singapore.

Related: LNG dual-fuel bunker tanker “MT Diligence” joins TFG Marine fleet for Singapore ops


Photo credit: TFG Marine
Published: 21 May 2024

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Argus Media: Low-carbon methanol costly EU bunker fuel option

Despite GHG emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.





resized argusmedia

Ship owners are ordering new vessels equipped with methanol-burning capabilities, largely in response to tightening carbon emissions regulations in Europe. But despite the greenhouse gas (GHG) emissions savings that low-carbon methanol provides, it cannot currently compete on price with grey methanol or conventional marine fuels.

17 May 2024

Ship owners operate 33 methanol-fueled vessels today and have another 29 on order through the end of the year, according to vessel classification society DNV. All 62 vessels are oil and chemical tankers.

DNV expects a total of 281 methanol-fueled vessels by 2028, of which 165 will be container ships, 19 bulk carrier and 14 car carrier vessels. Argus Consulting expects an even bigger build-out, with more than 300 methanol-fueled vessels by 2028.

A methanol configured dual-fuel vessel has the option to burn conventional marine fuel or any type of methanol: grey or low-carbon.

Grey methanol is made from natural gas or coal. Low-carbon methanol includes biomethanol, made of sustainable biomass, and e-methanol, produced by combining green hydrogen and captured carbon dioxide.

The fuel-switching capabilities of the dual-fuel vessels provide ship owners with a natural price hedge. When methanol prices are lower than conventional bunkers the ship owner can burn methanol, and vice versa.

Methanol, with its zero-sulphur emissions, is advantageous in emission control areas (ECAs), such as the US and Canadian territorial waters. In ECAs, the marine fuel sulphur content is capped at 0.1pc, and ship owners can burn methanol instead of 0.1pc sulphur maximum marine gasoil (MGO). In the US Gulf coast, the grey methanol discount to MGO was $23/t MGO-equivalent average in the first half of May. The grey methanol discount averaged $162/t MGOe for all of 2023.

Starting this year, ship owners travelling within, in and out of European territorial waters are required to pay for 40pc of their CO2 emissions through the EU emissions trading system. Next year, ship owners will be required to pay for 70pc of their CO2 emissions. Separately, ship owners will have to reduce their vessels' lifecycle GHG intensities, starting in 2025 with a 2pc reduction and gradually increasing to 80pc by 2050, from a 2020 baseline.

The penalty for exceeding the GHG emission intensity is set by the EU at €2,400/t ($2,596/t) of very low-sulplhur fuel oil equivalent. Even though these regulations apply to EU territorial waters, they affect ship owners travelling between the US and Europe.

Despite the lack of sulphur emissions, grey methanol generates CO2. With CO2 marine fuel shipping regulations tightening, ship owners have turned their sights to low-carbon methanol.

But US Gulf coast low-carbon methanol was priced at $2,317/t MGOe in the first half of May, nearly triple the outright price of MGO at $785/t. Factoring in the cost of 70pc of CO2 emissions and the GHG intensity penalty, the US Gulf coast MGO would rise to about $857/t. At this MGO level, the US Gulf coast low-carbon methanol would be 2.7 times the price of MGO. By comparison, grey methanol with added CO2 emissions cost would be around $962/t, or 1.1 times the price of MGO.

To mitigate the high low-carbon methanol costs, some ship owners have been eyeing long-term agreements with suppliers to lock in product availabilities and cheaper prices available on the spot market.

Danish container ship owner Maersk has led the way, entering in low-carbon methanol production agreements in the US with Proman, Orsted, Carbon Sink, and SunGas Renewables. These are slated to come on line in 2025-27. Global upcoming low-carbon methanol projects are expected to produce 16mn t by 2027, according to industry trade association the Methanol Institute, up from two years ago when the institute was tracking projects with total capacity of 8mn t by 2027.

By Stefka Wechsler


Photo credit and source: Argus Media
Published: 21 May 2024

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Bunker Fuel

Bunker Holding, 123Carbon and BV launch carbon insetting solution

Bunker Holding has concluded its first blockchain-powered carbon insetting operation in a new partnership with 123Carbon and Bureau Veritas.





Bunker Holding:Bunker tanker vessel supplying marine fuel to a cargo ship at anchorage

Marine fuel supplier Bunker Holding on Thursday (16 May) said it has concluded its first blockchain-powered carbon insetting operation in a new partnership with carbon insetting experts 123Carbon and Bureau Veritas.

This insetting partnership allows for the additional cost delivery of lower carbon, alternative marine fuels – such as sustainable biofuel – to be shared by carriers, freight forwarders, and cargo owners within the same value chain; allocated based on a globally accepted book and claim methodology.

“We’re excited to work with 123Carbon and Bureau Veritas, as we believe in complete transparency of how insets are created and transferred. Insetting is not new, but one concern within the maritime sector is under what circumstances alternative fuels are supplied, and who owns the emissions reductions,” said Tobias Troye, Head of Carbon Solutions at Bunker Holding.

By combining its alternative fuel supply expertise, its global access to low-carbon fuels and extensive carrier network with 123Carbon’s secure platform, Bunker Holding said it can offer carriers, freight forwarders, and cargo owners complete transparency and assurance regarding how their insets reduce maritime emissions.

“We are delighted that Bunker Holding not only uses our advanced platform for the issuance of the certificates, but has also chosen a fully branded solution to deliver the certificates in a secure environment to its customers,” said Jeroen van Heiningen, Managing Director of 123Carbon.

Working with 123Carbon’s blockchain-based insetting platform, and Bureau Veritas as third-party assurance partner to verify the fuel intervention and all related documentation, ensures that all insets are issued according to Smart Freight Centre’s Book & Claim methodology and 123Carbon’s assurance protocol.

To facilitate the intervention, Bunker Holding connected three different parties: the cargo owner, who wishes to reduce their scope 3 emissions and is willing to pay the “green premium”, the ship operator, to decarbonise its vessels through the use of biofuels, and the biofuel supplier, to deliver safe, high-quality low-carbon fuels. Due to the commitment from the cargo owner to purchase scope 3 insets, Bunker Holding was able to offer the biofuel at a more competitive cost to the ship operator, enabling the carrier to use biofuels instead of conventional fossil fuels.

“As a group, we are operationalising our decarbonisation strategy, and one key component has been to develop our alternative marine fuel supply capabilities, among others by securing fully certified biofuel availability in more than 100 ports around the world. The relative higher cost of alternative fuels may still prevent carriers to bunker it. However, carbon insetting helps bridge that gap, as it enables cost sharing and also sends an important demand signal to alternative fuel producers to scale up production,” said Valerie Ahrens, Senior Director of New Fuels and Carbon Markets at Bunker Holding.


Photo credit: Bunker Holding
Published: 21 May 2024

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