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.

Published

1 year ago

April 13, 2023

Admin

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

Biofuel

Argus Media: Bunkering sector needs deeper dive into B24 bio bunker fuel market

‘As we advance into 2025, the need to understand how B24 matures in terms of market fundamentals, pricing and dynamics will be a key indicator for the marine sector,’ says Mahua Chakravarty of Argus.

Published

2 days ago

October 4, 2024

Admin

Argus Media organises free admission ‘Argus Asia B24 Forum’ for bunkering sector

Ahead of Argus Asia B24 Forum, Manifold Times interviewed Mahua Chakravarty, Head of Marine Fuels Pricing (Asia) of independent global energy and commodity market intelligence provider Argus Media; she explains the growing prominence of B24 bunker fuel in the marine sector and believes it is imperative for the bunkering sector to deepen its knowledge on it:

MT: Why is it important for the bunkering sector to know more about the B24 bunker fuel market?

B24 has emerged as the first alternative marine fuel that allows ship-owners and charterers a drop-in fuel option, and make greenhouse gas (GHG) savings, for their voyages into EU and territorial waters.

It has proved to be the most practical solution for ship-owners that eliminates costly retrofitting charges. The easy availability of used cooking oil methyl ester (UCOME) as a blendstock from China and southeast Asia, also adds to its overall attractiveness as an alternative fuel.

B24 consumption in the port of Singapore recorded multi-fold jumps to touch 518,000t in 2023 as ship-owners fuelled for trials in preparation for the implementation of EU-led mandates like the EU Emissions Trading Scheme (ETS) and the Carbon Intensity Index (CII) rating. In 2024, B24 demand has continued to grow with 377,800t of consumption seen up to August, according to statistics from the Maritime and Port Authority of Singapore (MPA).

As we advance into 2025, the need to understand how B24 matures in terms of market fundamentals, pricing and dynamics will be a key indicator for the marine sector. Being the first generation of new marine fuels, B24 has shown the way that biofuel blends can provide a solution for ship-owners/charterers to meet compliance mandates set by the EU and IMO.

MT: Why has Argus developed its own B24 Singapore price index? What's so special about it and why should the industry adopt it as a benchmark?

Argus was the first to launch its spot B24 delivered on board (DOB) Singapore assessment in January 2023, thus introducing price discovery for this market at its point of inception. The past 1.5 years of daily price assessments of B24, using a robust market survey approach, has built Argus’ understanding of this market from the start.

We have seen the growth of liquidity and the quest among refiners, traders, ship-owners to find pricing solutions for a nascent market. We have been at the forefront of capturing spot liquidity growth and in assessing prices for this market.

This index is now considered a key price assessment by key refiners, traders, ship-owners and other stakeholders in the market.

MT: What takeaways can each segment of the bunkering sector such as bunker buyers, bunker traders, and shipowners receive from the upcoming Argus B24 forum?

The Argus B24 Asia Forum is aimed at showcasing some of these learnings by a global team that covers key markets like Singapore, China and Europe. Our global team will present their insights on the key trends driving demand for marine biodiesel globally.

As the marine sector marches onwards with the bunkering of higher biofuel blends, this forum will allow the audience to reflect on the key factors that have driven the marine biodiesel sector. It will provide insights to make better decisions about infrastructure, pricing, feedstock-related issues and what blends are likely to be prevalent in the coming year.

We will be hosting a panel discussion at this forum that will include key players driving the marine biodiesel space in Singapore and other regions.

The Argus Asia B24 Forum will be held in The Village Hotel (The Events Centre by Far East Hospitality), Sentosa, Singapore (Google Maps) on 8 October between 4.00pm to 7.00pm Singapore Time.

Participants are encouraged to register for the free event via the custom link here.

Photo credit: Argus Media
Published: 4 October 2024

Alternative Fuels

Report: E-Fuels projected to be available for next ZEMBA tender

Zero Emission Maritime Buyers Alliance and LR report found sufficient predicted supply of both e-methanol and e-methanol-capable vessels in container segment to support ZEMBA’s focus on e-fuel deployment.

Published

2 days ago

October 4, 2024

Admin

A new report released on Thursday (3 October) by the Zero Emission Maritime Buyers Alliance (ZEMBA) and Lloyd’s Register Maritime Decarbonisation Hub found that e-fuel-powered shipping services are projected to be available for ZEMBA’s next tender.

Specifically, the report – which summarises the findings from a request for information (RFI) that the two organizations co-ran earlier in 2024 – found sufficient predicted supply of both e-methanol and e-methanol-capable vessels in the container segment to support ZEMBA’s focus on e-fuel deployment.

ZEMBA’s next tender is expected to launch in early 2025, with the aim to purchase the environmental attributes associated with e-fuel powered services starting in 2027.

“ZEMBA's aim is to open the door to new and increasingly scalable solutions through each of our tender processes,” said Ingrid Irigoyen, President and CEO of ZEMBA.

“Because there are scale limitations to those low carbon fuels that rely on biogenic feedstocks, rapid deployment of hydrogen-derived e-fuels this decade is crucial to ensure that the maritime sector gets on a 1.5 aligned pathway toward full decarbonisation by 2050, at the latest.

“We’re pleased that the RFI results suggest that the maritime sector will be ready to provide ZEMBA’s climate-leading freight buyer members with e-fuel powered shipping for our next tender.”

Nearly 50 ship operators and fuel suppliers from around the world responded to the ZEMBA RFI, which was intended to assess the market readiness of commercial deployment of e-fuels in shipping.

The report focuses on the implications of the RFI's results for ZEMBA’s next tender and how these findings relate to overarching trends in commercial deployment of e-fuels in the maritime sector. The RFI did not ask about the projected cost or price of e-fuel-powered services.

“The results of the RFI offer a valuable glimpse into the emerging market for e-fuels and e-fuel-capable vessels,” said Dr Carlo Raucci, Director of Sustainable Fuels and Strategy at Lloyd's Register Maritime Decarbonisation Hub.

“Despite the current gap between e-fuel supply and vessel availability, it's encouraging to see the potential for e-fuels to make a significant impact on the maritime sector. We're excited to collaborate with ZEMBA on their second tender, which could be instrumental in driving the widespread adoption of scalable e-fuels in shipping.”

ZEMBA’s upcoming tender builds upon lessons learned during its inaugural tender, which was successfully completed in April 2024. Global carrier Hapag-Lloyd was the winner of the first tender and is supporting members to collectively avoid at least 82,000 metric tonnes of CO2e in 2025 and 2026.

The majority of RFI respondents predicted that commercial e-fuels deployment in the maritime sector would be feasible starting in 2027 and 2028, with limited deployment potentially as early as late 2026. However, in the next few years, the RFI results identified a mismatch in the supply of certain e-fuels and corresponding e-fuel capable vessels on a fuel-by-fuel basis.

Containerships capable of operating on e-methane are already available now, but the RFI found no e-methane production projects post-final investment decision (FID).

Conversely, e-ammonia production projects under construction appear to be sufficient to meet ZEMBA’s estimated demand, but the first e-ammonia-capable containerships are unlikely be on the water by 2027.

The RFI suggests e-methanol is the most likely pathway for ZEMBA’s next tender because of alignment between sufficient projected e-methanol fuel production and e-methanol-capable containership vessels on the water in 2027.

However, across fuel types, the report highlights that a significant number of e-fuel projects remain at pre-FID stage, casting doubt on whether those projects would begin production on their projected timelines and, related, if e-fuel-capable dual fuel vessels will actually run on e-fuels.

One finding from ZEMBA’s inaugural tender was that announcements for e-fuel development projects often do not correlate to commercial readiness within predicted timeframes. ZEMBA received no e-fuel-powered bids for its first tender.

Commitments from ZEMBA members for e-fuel-powered shipping services through the next tender will aim to provide encouragement to ship operators and others across the maritime value chain to enter into longer term offtake e-fuel contracts of their own.

ZEMBA intends to announce details about its next e-fuel-focused tender before the end of 2024, with the aim to solicit bids in early 2025. Ahead of this tender, ZEMBA is recruiting additional climate-leading companies who are seeking to credibly reduce their Scope 3 emissions, manage long-term cost of the energy transition, and kickstart a zero-emission market in the maritime sector.

Note: The report can be found here.

Photo credit: Chris Pagan on Unsplash
Published: 4 October, 2024

Alternative Fuels

Greece joins Clean Energy Marine Hubs to support low-carbon fuels

Greece, ABS, WEF and other partners joined the initiative that aims to accelerate and de-risk the production, transport and use of low-carbon fuels that will be transported by shipping for the world.

Published

2 days ago

October 4, 2024

Admin

Greece joins Clean Energy Marine Hubs to support low-carbon fuels

The Clean Energy Marine Hubs (CEM Hubs) on Wednesday (2 October) welcomed the government of Greece and new partners ABS, Lloyd’s Register Maritime Decarbonisation Hub, OCIMF and the World Economic Forum to the initiative that aims to accelerate and de-risk the production, transport and use of low-carbon fuels that will be transported by shipping for the world.

Greece is one of the leading maritime countries in the world, representing 20% of global shipping and is largest ship-owning nation in dwt, and will play a significant role in driving forward the initiative.

The Minister of Environment and Energy, Greece, Mr. Theodoros Skylakakis, highlights that: “The protection of the marine environment is at the top of Greece’s political agenda. The contribution of the oceans and seas is not only vital for the regulation of the climate, but also for our very survival on the planet.”

“Climate change as well as marine pollution, through (amongst others) unsustainable maritime transport, lead to the destruction of the marine environment and the loss of the unique biodiversity. We are therefore committed to the CEM- Hubs Initiative and are happy to join forces with all other partners to achieve our shared goals.”

The Minister of Maritime Affairs and Island Policy Greece, Mr. Christos Stylianides, said: “Greece decided to join the CEM Hubs platform on the basic understanding that promoting the worldwide use and transportation of low-carbon fuels at scale is the most essential prerequisite for the energy transition of shipping.

“Being a traditional maritime nation with a strong interest in the provision of maritime transport services worldwide, and as a shipping hub in the Eastern Mediterranean, we will be delighted to work with all CEM Hubs partners and contribute to its objectives.”

New partners joining the initiative each bring unique skills and expertise to evolve the CEM Hubs to the next level. The World Economic Forum is the international organization for public-private cooperation, providing a global, impartial and not-for-profit platform for meaningful connection between stakeholders. ABS is a global leader in providing classification services for marine and offshore assets.

Lloyd’s Register Maritime Decarbonisation Hub is also a leading provider in decarbonisation services to the marine industry. Oil Companies International Marine Forum (OCIMF) is a voluntary association of oil companies with an interest in the shipment and terminalling of crude oil, oil products, petrochemicals and gas.

The announcement was made during the Clean Energy Ministerial Meeting (CEM15) which supports the G20 Energy Transition Agenda. The maritime industry and energy Ministers met to discuss how to move forward with the implementation of the infrastructure architecture for future fuels production, transport and use across countries and sectors, including shipping.

Roberto Bocca Head, Centre for Energy and Materials; Member of the Executive Committee, World Economic Forum, said: “Embracing a low-emissions energy system will require resilient digital and physical infrastructure to support the deployment of new technologies. Industrial clusters such as marine hubs will play a critical role in establishing the necessary infrastructure for a multi-fuel future. This partnership between the World Economic Forum’s Transitioning Industrial Clusters initiative and the Clean Energy Marine Hubs aims to accelerate public-private collaboration to drive economic growth, employment and reducing emissions.”

The CEM Hubs initiative, which is co-led by a taskforce of CEOs, is a partnership between the International Association of Ports and Harbors (IAPH), the Clean Energy Ministerial (CEM), and International Chamber of Shipping (ICS).

Note: More information on the initiative can be found here.

Photo credit: International Chamber of Shipping
Published: 4 October, 2024