Issues of using methanol as a marine fuel was the focal point of discussion by panellists at the recent VPS-organised Fuel Quality, New Fuels & Decarbonisation Challenges seminar held in Shanghai, China on 28 March.

Chimbusco – Working on three aspects of methanol as marine fuel

Tian Ming, General Manager, Enterprise Management & Development Division, Chimbusco shared the company has been working on three areas, include availability, bunkering ports, and standards, for the use of methanol as a bunker fuel.

“As far as we know the availability of green methanol is very limited and there will be a big gap between supply and demand. In China, we pay attention to green methanol projects but found they are too far from mass production,” said Mr Tian.

He noted methanol can only be currently supplied as a bunker fuel at less than ten ports in the world while Shanghai port will start supplying green methanol soon.

“Last year at a decarbonisation forum we launched marine fuel quality and delivery standards for methanol. With such standards we hope we can have safe fuel supply [for methanol],” noted Mr Tian.

“This year, we will be focusing on the supply of marine biofuel and green methanol, and consider the design of a more environmentally friendly refuelling barge.”

The Methanol Institute – Market imbalance for forecasted demand and supply

Zhao Kai, Chief Representative China, the Methanol Institute (MI) similarly noted a shortfall in future methanol bunker supply due to a chicken and egg situation between producers and shipowners.

“We currently have about over 260 new vessels in the orderbook and 100 ships due for retrofits to use methanol as a bunker fuel which will generate more than 20 million mt in market demand,” explained Mr Zhao.

He noted MI has not been able to track much development in renewable methanol supply agreements between producers and shipowners.

“The renewable methanol supply side wants prices to be higher, but shipowners want to wait for lower prices. MI is doing a lot of work in the background to help both supply and demand sides establish a working relationship.”

Green Marine Group – Safety an important factor amidst maritime energy transition

Donnie Bagang, Managing Director of Green Marine Group and the first Chief Engineer in the world to run a methanol-fuelled tanker, emphasised the ongoing transition in the shipping industry towards cleaner fuels. He highlighted the significance of crew training and risks associated with new fuels in this changing landscape.

Bagang also gave a practical example that a simple leakage of the same rate/quantity in similar operating conditions could introduce either a minor incident for methanol fuel or life-threatening situation in the case of ammonia fuel.

Recognising the industry is now moving in the right direction formulating regulatory requirements for the new fuels, he emphasised: “We do not need to reinvent the wheel completely. Instead, we should look into our present framework, identify training gaps, and bridge those gaps.”

“All these new fuels have been transported as cargo for a very long time and having them marine fuel does not make them a different chemical.”

VPS – No need to ‘reinvent the wheel’ to use methanol as bunker fuel safely

Captain Rahul Choudhuri, President Strategic Partnerships, VPS shared the firm undertook the very first methanol bunker quantity survey (BQS) in Singapore for Maersk’s first methanol-powered container ship, the Laura Maersk.

“There were lots of precautions taken like fire training, proper sample bottles etc and the process shows there is no problem with using methanol as a bunker fuel while ensuring proper Q&Q controls are in place. The IMPCA standards for the methanol cargo industry are already in place,” said Captain Choudhuri.

“Methanol has been carried as a cargo on product tankers for many years. There is no need to reinvent the wheel and we can learn from experience gained from the cargo trading industry. VPS is ready to help shipowners manage the safe use of methanol as a marine fuel.”

Proper management of traditional fossil-based bunker fuel and its alternative variants such as biofuel will continue to be an important topic for the future, he added.

GARD – New marine fuels introduce different risk profile for vessels

Yang Yang, Senior Lawyer, Defence/Charterers & Traders Claims Asia, GARD spoke about the risks insurers take in order to support shipping’s decarbonisation journey.

“As one of the world’s largest marine insurers, based on data from the tens of thousands of claim we handled each year, the risk profile between different type of vessels are very different,” said Mr Yang.

“We can make forecasts based on historical data. In terms of transition risks, we have a unique advantage due to the wealth of data that emanates from our claims portfolio. This claims data gives us a view of the risks when it comes to the industry’s performance in management of change such that the impact of change is measurable. It is likely to bring in an uptick in claims frequency, and change often comes with a price tag. For a vessel with a new fuel, insurers do not have much claims experience or data to base our assessment on. As such, insurance companies should engage all stakeholders to increase risk awareness. One thing remains important and that is proper crew training to mitigate risk. As claims start being notified, we start building our own experience and then we are able to map out risk profiles based on the fuel used for propulsion.”

DNV – Safety still important on the road towards decarbonisation

James Huang, Senior Vice President, DNV who was also moderator for the event stressed the shipping sector should not neglect safety while on the road towards decarbonisation.

“Shipping is a traditional industry and the maritime sector transports about 90% of the world’s goods. The shipping sector is transforming due to decarbonisation but traditional issues such as safety still exist,” said Mr Huang.

He noted DNV identifying three safety related risks for the shipping sector.

“The first is increased number of accidents. Based on 2022 statistics, 50% of accidents are based on machine failures much like the recent case of a containership hitting a bridge at Baltimore. The second is cybersecurity, and third is new risks posed by consumption of new marine fuels,” stated Mr Huang.

“We need to look at the whole value chain to identify and cope with risks as shipping moves to adopt new types of bunker fuels on a larger scale.”

Related: China introduces country’s first marine methanol bunkering standards 
Related: China: Chimbusco releases methanol bunkering code of practice draft to industry
Related: VPS shares its experience with methanol as a bunker fuel
Related: Baltimore bridge collapse: FuelTrust highlights bunkering activities of Singapore-registered “Dali”

Photo credit: VPS
Published: 9 April 2024