Alternative Fuels

Shipping decarbonisation moving at faster pace than 20-year wait for LNG as marine fuel, observes DNV expert

‘Clearly, collaboration is the fuel for the future,’ says Dr Shahrin Osman, Regional Head of Maritime Advisory, Director of Maritime Decarbonization and Autonomy Centre of Excellence Asia – Pacific at DNV.

Published

3 years ago

March 29, 2022

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Decarbonisation for the maritime sector is taking place at a faster pace when compared to the timeline for the adoption of liquified natural gas (LNG) as a marine fuel, observes an expert at classification society DNV.

Dr Shahrin Osman, Regional Head of Maritime Advisory, Director of Maritime Decarbonization and Autonomy Centre of Excellence Asia – Pacific at DNV, believes there is now a “clear urgency” for the entire shipping industry to decarbonise.

“The first ship to use LNG as a marine fuel started operating 20 years ago and it is only today the material has become a mainstream bunker fuel,” he told Singapore bunkering publication Manifold Times on the side lines of Asia Pacific Maritime (APM) 2022.

“People are now collaborating a lot more than they used to; for example, the Global Centre for Maritime Decarbonisation (GCMD) is a public-private investment initiative formed at a scale we did not foresee taking place a couple of years ago.

“A clear urgency has also result in funding being easier to obtain for decarbonisation studies.”

Dr Shahrin pointed out GCMD in January commissioning an ammonia bunkering safety study for defining a set of safety guidelines and operational envelopes to establish the basis of a regulatory sandbox for ammonia bunkering trials at two Singapore sites.

“Clearly, collaboration is the fuel for the future. With ammonia bunkering studies done now, we will be able to identify key pain points and safety concerns, while finding their respective solutions, at an early stage.”

Multi-Fuel Future Planned for Singapore’s Bunkering Sector

The Maritime and Port Authority (MPA)’s target of reducing absolute emissions from domestic harbourcraft by 15% from 2021 levels by 2030 means local vessels will be transitioning to solutions offered by blended biofuel, LNG, diesel-electric hybrid propulsion, and full-electric propulsion.

The 1,600 licensed diesel-powered harbourcraft operating in Singapore will find electrification the easiest route towards decarbonisation, believes Dr Osman.

He noted MPA and Singapore Maritime Institute (SMI) in August 2021 awarding funding of SGD 11.3 million to three consortiums to research, design, build and operate fully electric harbourcraft over the next five years.

Funding for these projects will enable various technologies and charging infrastructures to be studied, test-bedded and deployed across different types of harbourcraft and operating profiles, through use cases proposed by the consortiums.

“Harbourcraft will be the first ones adopting electrification due to ease of entry. By 2030, technology could even produce batteries with higher energy density allowing electrically propelled feeder vessels to operate from Singapore to Port Klang, Jakarta and within the region,” he shares.

“With batteries, you not only reduce emissions but also forego the need to pay for bunker fuel.”

Biofuels also present themselves as attractive options for meeting MPA’s 2030 emission targets for the short term due to minimal CAPEX and immediate emission reductions (if using a B100 variant).

Further, biofuels are seen as the only immediate option available for the aviation industry’s pathway towards its decarbonisation route; a direction which will could further drive up prices of the material in the long term should it face similar demand from shipping.

However, other alternative fuels have a lower calorific value that requires significant onboard storage as compared to VLSFO.

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Hence, LNG will continue to be the obvious choice as a transitional bunker fuel for international going ships, highlights Dr Shahrin.

“We believe in fuel flexibility and at the moment LNG is the obvious choice for international going ships,” he said.

“This is because at the moment there are no other alternative marine fuels which have the infrastructure to support vessels undergoing deep sea operations,” he explains, while adding LNG’s benefits goes far more than the 20% to 25% carbon reductions offered.

“Too much emphasis on carbon reductions have been placed. By going to LNG, you are also helping the community closer to the coast line improve their health by eliminating local pollution such as SOx, NOx and PM from emissions. This is especially true for countries with shorelines such as Singapore.

“This is the reason why we have to go for LNG and there are no other options now.”

A Suggestion to Establish a NOx Fund for the Singapore Maritime Sector

Moving forward, Dr Shahrin suggests Singapore could implement a fund as an instrument to help early movers of maritime decarbonisation.

In 2008, the Norwegian Business Sector established the NOx-fund to achieve emission reductions, where the shipping, oil and gas, land-based industry and others, instead of a state tax, pay a far lower fee through NOx-payments.

This development established a private fund which collected approximately USD 100 million per annum.

In return, ships, platforms and industry plants can apply for funding in NOx-reducing measures through investment in technologies including selective catalytic reduction systems, technical energy efficiency measures, process optimisation and alternative fuels such as LNG, battery electrification, and shore power/offshore wind for platforms.

Funding is based on actual documented NOx-reduction in Norwegian domestic trade, but limited up to 70% funding of the extra investment cost.

“In Norway, every ship which visits its ports has to pay to the NOx fund so this fund helps stakeholders pay for future investments,” shares Dr Shahrin.

“Today, the majority of the NOx-fund portfolio has even expanded to include technologies related to CO2 reduction, in addition to NOx.

“Probably, Singapore could consider something around that so money taken from emissions taxes (i.e. a NOx fund) can support a system to encourage infrastructure improvement.”

This is how the NOx Fund works

Note: DNV has since 2008 been hired by the NOx-fund as their advisor, basically encompassing:

Evaluating and making recommendations with regards to technologies and project funding for all applications. DNV’s support recommendations are presented to the NOx-fund Board (DNV participates in the Board meetings as advisor, not member), prior to the Board’s support decisions.
Verification of actual implementation and emission reducing effect when measures are put into operation (typically for 1-2 years of operating of the measure) – as basis for the actual payment of fundings.
Providing a wide range of techno-economic and strategic advisory and analysis for the development and adjustment of the support arrangement – such that incentives are up to date with technology development and industry needs, and the NOx-fund can prioritise with regards to “what gives maximum reduction for money, in the right time”.

Photo credit: DNV, Business Sector’s NOx Fund
Published: 29 March, 2022

LNG Bunkering

New MOL vessel to be supplied LNG bunker fuel in Japan before voyage to Australia

After departing from Saijo Shipyard, LNG fuel will be supplied directly to “Verde Heraldo” through shore-to-ship bunkering at Senboku Terminal of Osaka Gas, and is then scheduled to sail for Australia.

Published

8 hours ago

April 22, 2025

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New MOL vessel to be supplied LNG bunker fuel in Japan before voyage to Australia

Mitsui OSK Lines (MOL) on Friday (18 April) said the naming and delivery ceremony for the LNG-fuelled Capesize bulker, which MOL ordered for JFE Steel Corporation, was held at the Saijo Shipyard of Imabari Shipbuilding.

The vessel was named the Verde Heraldo, which means “Green Pioneer” in Spanish, by JFE Steel President and CEO Masayuki Hirose. MOL executives including President & CEO Hashimoto were also on hand for the ceremony.

After departing from Saijo Shipyard, LNG fuel will be supplied directly to the vessel through shore-to-ship bunkering at the Senboku Terminal of Osaka Gas, and is then scheduled to sail for Australia.

The Verde Heraldo will sail under long-term transport contracts to supply raw materials for JFE Steel's mills, providing both reduced environmental impact and safe and reliable marine transport services.

About Verde Heraldo

LOA: 299.99 m
Breadth: 50.00 m
Draft: 18.436 m
Deadweight tonnage: 210,321 tonnes
Shipyards: Imabari Shipbuilding and Nihon Shipyard

Photo credit: Mitsui OSK Lines
Published: 22 April, 2025

Alternative Fuels

Indonesia and HDF Energy partner to study hydrogen solutions for maritime decarbonisation

Agreement between HDF Energy, Indonesia’s Ministry of Transportation, PLN and ASDP outlined a joint study to decarbonise Indonesia’s maritime sector using locally produced green hydrogen.

Published

8 hours ago

April 22, 2025

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Indonesia and HDF Energy partner to study hydrogen solutions for maritime decarbonisation

PT HDF Energy Indonesia, a subsidiary of French hydrogen infrastructure developer HDF Energy, recently signed a Memorandum of Understanding (MoU) with Indonesia’s Ministry of Transportation (MoT), state-owned electric utility PT PLN (Persero) and ferry operator PT ASDP Indonesia Ferry (Persero).

The agreement outlined a joint study to decarbonise Indonesia's maritime sector using locally produced green hydrogen. The study will be conducted in collaboration with, and co-funded by, the International Maritime Organization (IMO).

The MoU was signed during the Global Hydrogen Ecosystem Summit on April 15, 2025 in Indonesia.

The study will focus on Eastern Indonesia, a region with plenty of sun and home to many of ASDP's strategic ferry routes. HDF Energy is currently developing 23 Renewstable® hydrogen power plants in the region. These facilities combine a solar park with substantial on-site energy storage in the form of green hydrogen to provide non-intermittent, stable and 100% clean electricity to the grid, day and night.

By generating surplus green hydrogen at a competitive marginal cost, Renewstable® plants also pave the way for the supply of green hydrogen to decarbonise maritime transport. The hydrogen produced will be used to power the high-power fuel cells developed and manufactured by HDF Energy in France, a modular, reliable solution tailored to the conversion of maritime fleets.

With this project, HDF Energy is deploying an integrated approach: producing competitive green hydrogen locally and offering a zero-emission maritime vessels' propulsion solution based on its fuel cells.

ASDP, which operates one of the world's largest ferry networks, plays a critical role in connecting Indonesia's remote islands. As a key player in the maritime sector's energy transition, the company will contribute to the study to identify opportunities for converting its fleet and port infrastructures. The aim is to replace traditional diesel engines with solutions based on green hydrogen and renewable electricity, in order to significantly reduce emissions.

PLN has already taken a proactive role in launching hydrogen pilot projects across the country. The company previously signed an MoU with HDF Energy to accelerate the deployment of Renewstable® hydrogen power plants as a green alternative to diesel-based power — a collaboration representing potential investments of up to USD 2.3 billion, supported by international development institutions including the U.S. International Development Finance Corporation (DFC).

On the same occasion, HDF also signed an MoU with PT Pelayaran Bahtera Adhiguna (PT BAg), a national shipping company specialising in sea transportation services for primary energy distribution across Indonesia. The partnership reflects a joint commitment to assessing hydrogen as a clean alternative to power auxiliary systems on large vessels.

Mathieu Geze, HDF Energy's Director for APAC and President Director of PT HDF Energy Indonesia, stated: “We are proud to reaffirm our commitment to a Net Zero emission future through this strategic collaboration. Working together with PLN, ASDP, the Ministry of Transportation, and with PT Bag, we aim to place Indonesia at the forefront of green hydrogen innovation in the Asia-Pacific. Our fuel cells represent a decisive step forward in the decarbonization of maritime transport in the Indonesian archipelago, as well as a formidable showcase for French innovation on the international stage.”

On a regional scale, this partnership in Indonesia is part of HDF Energy's development drive in Southeast Asia.

On 11 April, in the Philippines, HDF signed a MoU with the Department of Transportation to harness green hydrogen—produced by HDF's Renewstable® power plants currently under development—to power the next generation of hydrogen-fuelled maritime vessels.

The following day in Vietnam, HDF entered into a strategic partnership with ACST, an organisation affiliated with the Ministry of Construction, to advance green hydrogen solutions, including the retrofitting of diesel ferries with HDF's hydrogen fuel cells.

Photo credit: HDF Energy
Published: 22 April, 2025

Biofuel

Argus Media: IMO incentive to shape bio-bunker choices

IMO proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward.

Published

8 hours ago

April 22, 2025

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An International Maritime Organization (IMO) proposal for ship owners who exceed emissions reduction targets to earn surplus credits will play a key role in biofuel bunkering options going forward.

22 April 2025

The price of these credits will help determine whether B30 or B100 becomes the preferred bio-bunker fuel for vessels not powered by LNG or methanol. It will also influence whether biofuel adoption is accelerated or delayed beyond 2032.

At the conclusion of its meeting earlier this month the IMO proposed a dual-incentive mechanism to curb marine GHG emissions starting in 2028. The system combines penalties for non-compliance with financial incentives for over-compliance, aiming to shift ship owner behavior through both "stick" and "carrot" measures. As the "carrot", ship owners whose emissions fall below the IMO's stricter compliance target will receive surplus credits, which can be traded on the open market. The "stick" will introduce a two-tier penalty system. If emissions fall between the base and direct GHG emissions tiers, vessel operators will pay a fixed penalty of $100/t CO2-equivalent. Ship owners whose emissions exceed the looser, tier 2, base target will incur a penalty of $380/t CO2e. Both tiers tighten annually through 2035.

The overcompliance credits will be traded on the open market. It is unlikely that they will exceed the cost of the tier 2 penalty of $380/t CO2e. Argus modeled two surplus credit price scenarios — $70/t and $250/t CO2e — to assess their impact on bunker fuel economics. Assessments from 10-17 April showed Singapore very low-sulphur fuel oil (VLSFO) at $481/t, Singapore B30 at $740/t, and Chinese used cooking oil methyl ester (Ucome), or B100, at $1,143/t (see charts).

If the outright prices remain flat, in both scenarios, VLSFO would incur tier 1 and tier 2 penalties, raising its effective cost to around $563/t in 2028. B30 in both scenarios would receive credits putting its price at $653/t and $715/t respectively. In the high surplus credit scenario, B100 would earn roughly $580/t in credits, bringing its net cost to about $563/t, on par with VLSFO, and more competitive than B30. In the low surplus credit scenario, B100 would earn just $162/t in credits, lowering its cost to approximately $980/t, well above VLSFO.

At these spot prices, and $250/t CO2e surplus credit, B100 would remain the cheapest fuel option through 2035. At $70/t CO2e surplus credit, B30 becomes cost-competitive with VLSFO only after 2032. Ultimately, the market value of IMO over-compliance credits will be a major factor in determining the timing and extent of global biofuel adoption in the marine sector.

By Stefka Wechsler