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Shipping needs act quickly to achieve 5% zero-emission bunker fuel target by 2030, report warns

Report revealed that while it is possible for scalable zero-emission fuels to make up 5% of international shipping fuels by 2030 – shipping’s breakthrough target – the window of opportunity will close soon.

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UMAS, a partnership between UMAS International Ltd and the University College London (UCL) Energy Institute, on Wednesday (18 October) said a new report by them and two other partners found that while it is possible for scalable zero-emission fuels to make up 5% of international shipping fuels by 2030 – shipping’s breakthrough target – the window of opportunity will close soon and rapid action is required from the industry.

The report from UMAS, Getting to Zero Coalition, and Race to Zero, titled Climate Action in Shipping, Progress towards Shipping’s 2030 Breakthrough, painted a mixed picture when it comes to shipping’s core challenges of sourcing zero-emission fuels and deploying zero-emission vessels. 

Zero-emission fuel bunker production currently in the pipeline could end up covering just a quarter of the fuel needed to deliver the breakthrough. However, if more projects are successful, zero-emission fuel production could be up to twice as much as is needed, even when accounting for other sectors’ fuel needs.

 On vessels, the picture is less rosy. Despite headline-grabbing orders for methanol-fuelled ships, continuing the current trajectory of orders might only deliver one-fifth of the needed vessels to achieve the breakthrough target.

“The last 12 months have seen a positive shift in maritime decarbonisation efforts. Now is the time to see strong progress in terms of commitment for zero carbon fuels and freight from the industry so that the needed rapid scale-up of these fuels in the energy mix is achieved,” says Dr Domagoj Baresic, Research Associate at UCL and Consultant at UMAS, and lead author of the report. 

Progress on policy is critical to enabling the needed scale-up of supply and demand. Major progress has been achieved with the adoption of an ambitious greenhouse gas (GHG) emissions reduction strategy by the International Maritime Organization (IMO), which will be followed in 2025 by the adoption of concrete global measures to achieve the strategy’s goals. Because these measures are to be implemented after 2027, industry and national governments will need to make concerted, immediate efforts (e.g. through green corridors and national policy) to stimulate supply and demand in the intervening period and ensure that the industry is prepared to deliver on the IMO strategy before 2030.

“With the revision of the IMO’s greenhouse gas strategy, the industry’s direction of travel is clear. Especially in these early years, we need to be able to assess how fast we’re moving in that direction. This report shows that the industry is progressing, but that action still needs to accelerate,’’ said Jesse Fahnestock, Project Director at the Global Maritime Forum.

Launched in conjunction with the Global Maritime Forum’s Annual Summit in Athens, the report assessed progress towards the goal of having scalable zero-emission fuels account for 5% of international shipping fuels by 2030. This is the threshold needed to rapidly scale the uptake of such fuels and achieve full decarbonisation by at least 2050. Notably, the recently revised IMO strategy includes a new level of ambition and sets an important target of at least 5% – striving for 10% – uptake of zero or near-zero GHG emission fuels by 2030. 

The report marked a significant milestone on the road to COP28 later this year in Dubai, providing a stocktake of progress. It evaluates the shipping breakthrough goal against five key levers for change: technology and supply; finance; policy; demand; and civil society action.

“The technology to facilitate production, distribution and bunkering of SZEF is progressing well, however the extent of its scale-up throughout the rest of the decade is not guaranteed. To become fully aligned with the 2030 5% breakthrough target, all sectors of the maritime industry must rally around the historic ambitions set out in the 2023 IMO GHG Strategy and work to establish a robust demand base for SZEF, thereby providing producers with the confidence they need to invest in new capacity projects.” said James Stewart, Research Assistant at UCL and Consultant at UMAS, and co-author of the report.

The report indicated that financing for achieving the breakthrough is partially on track, with the amount of shipping finance covered by the Poseidon Principles surpassing USD 200 billion and the climate alignment of these investments improving from 4% to 6% on a weighted average basis. The ability of the industry to continue to improve alignment as requirements tighten remains to be seen.

“Evidence suggests that clear signals needed for ship owners to make long-term decisions towards sustainable zero-emission fuel-capable vessels with the least amount of commercial uncertainty are still lacking, despite the industry being at a critical juncture where a significant structural shift needs to occur. It is therefore imperative that strong, effective legislation and incentives are rapidly put into place to catalyse the necessary transition.” said Dr Vishnu Prakash, co-author of the report.

“The key message from this work is that there remains insufficient current and future demand (both in terms of vessels and cargo) to match the supply required to be on track with the breakthrough goal. Despite the numerous headline grabbing announcements for orders dual fuel methanol ships (assuming they actually run on e-methanol) they form a tiny fraction of the overall no. of ships required.” said Dr Nishatabbas Rehmatulla, Principal Research Fellow at UCL and Principal Consultant at UMAS, co-author of the report.

Note: Read the full report “Climate Action in Shipping: Tracking Progress towards shipping’s breakthrough goals” here.

Photo credit: william william on Unsplash
Published: 23 October, 2023

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Methanol

VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Firm was appointed by OCI Methanol Europe to conduct a quantity and quality assessment of a methanol bunker fuel delivery to “Eco Maestro” in Singapore.

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VPS conducts assessment on first SIMOPS methanol bunkering op in Singapore

Marine fuels testing company VPS on Tuesday (28 May) said it was appointed by OCI Methanol Europe, part of the OCI Global Group, to conduct a quantity and quality assessment of a methanol fuel delivery to Eco Maestro in Singapore.

Captain Rahul Choudhuri, President Strategic Partnerships, VPS, said VPS survey experts Rafael Theseira and Muhd Nazmi Abdul Rahim were at hand during the methanol bunkering to ensure the 300 metric tonnes of methanol transfer was carried out smoothly, having been involved in the first methanol bunkering a year ago. 

Manifold Times recently reported X-Press Feeders, Global Energy Trading Pte Ltd (GET), and PSA Singapore (PSA) successfully completing the first simultaneous methanol bunkering and cargo operation (SIMOPS) in Singapore.

A X-Press Feeder container vessel, Eco Maestro, on its maiden voyage from Asia to Europe was successfully refuelled with close to 300 mt of bio-methanol by GET, a MPA licensed bunker supplier, using MT KARA

The ISCC-certified bio-methanol used for the SIMOPS was produced by green methanol producer OCI Global and supplied via GET, a ISCC-certified supplier.

Captain Choudhuri said the role of the marine, petroleum or bunker surveyor has evolved over the years in shipping and maritime affairs, but the principles have not - and that is to provide independent assessment of the quality and quantity of the product transfer. 

“This may seem obvious but this quality and quantity control is crucial to avoid commercial discrepancies, shortages or fraud,” he said.

“Safety training is critical and we have been on top of this having completed the required MPA fire-fighting course and the IBIA Methanol training course. We will work more with the Singapore Maritime Academy for trainings in future,” he added.

In August last year, Singapore-headquartered independent common carrier X-Press Feeders launched its first ever dual-fuel vessel Eco Maestro in China.

Manifold Times previously reported VPS stating it was the first company to complete a methanol bunker quantity survey (BQS) operation in Singapore on 27 July last year.

VPS was appointed by Maersk and Hong Lam Marine Pte Ltd, to undertake the very first bunker quantity survey (BQS) of a methanol fuel delivery, supplied by Hong Lam to the Maersk vessel on its maiden voyage to Europe. 

Related: First SIMOPS methanol bunkering operation completed in Singapore
Related: VPS completes quantity survey on Singapore’s first methanol bunkering op
Related: Singapore bunkering sector enters milestone with first methanol marine refuelling op
Related: X-Press Feeders launches its first methanol dual-fuel vessel “Eco Maestro” in China

 

Photo credit: VPS
Published: 29 May 2024

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LNG Bunkering

Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Agreement builds on the success of the previous contract Gasum has had with Equinor; Gasum’s bunker vessels “Coralius”, “Kairos” and “Coral Energy” will be used for the bunkering operations.

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Gasum and Equinor ink continuation of long-term LNG bunkering agreement

Nordic liquefied natural gas (LNG) bunker supplier Gasum on Tuesday (28 May) said it signed a long-term contract with Norway-based global energy company Equinor whereby Gasum continues to supply LNG to Equinor’s dual-fuel chartered fleet of vessels. 

The agreement builds on the success of the previous contract Gasum has had with Equinor. Gasum’s bunker vessels Coralius, Kairos and Coral Energy will be used for the bunkering operations.

The agreement also includes additional support services such as cooling down and gassing up, which has also been a part of Gasum’s previous collaboration with Equinor. 

Gasum has organised three separate LNG cool down operations for Equinor in Skagen so far this year.

Both Gasum and Equinor have committed to sustainability goals to enable a cleaner energy future. Equinor’s ambition is to become a net-zero emissions energy company by 2050.

Using LNG in maritime transport means complete removal of sulfur oxides (SOx) and particles, and reduction of nitrogen oxides (NOx) emissions of up to 85 percent as well as a reduction in CO2 emissions by at least 20%. LNG is interchangeable with liquefied biogas (LBG/bio-LNG), which reduces carbon dioxide emissions by 90% compared to conventional fuel such as marine gasoil (MGO).

With LNG and bio-LNG the maritime industry can reduce emissions already today, instead of waiting for future solutions. Gasum’s strategic goal is to bring yearly seven terawatt hours (7 TWh) of renewable gas to market by 2027. Achieving this goal would mean combined carbon dioxide reduction of 1.8 million tons per year for Gasum’s customers.

Related: Equinor Energy AS extends LNG bunkering agreement with Gasum
Related: Gasum expands LNG bunkering business to ARA region through partnership with Equinor

 

Photo credit: Gasum
Published: 29 May 2024

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Methanol

Consortium inks MoU for facility in Egypt to produce green methanol bunker fuel

AD Ports Group, Transmar and Orascom Construction will develop a green methanol storage and export facility, which will provide bunkering solutions for mainliners who have ordered green methanol powered vessels.

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Consortium inks MoU for facility in Egypt to produce green methanol bunker fuel

AD Ports Group, a facilitator of global trade, logistics and industry on Tuesday (28 May) said it signed a memorandum of understanding (MoU) with container shipping line and terminal operator Transmar and global engineering and construction contractor Orascom Construction for the development of a green methanol storage and export facility. 

AD Ports Group said the facility will aim to supply low-carbon fuel for maritime transport, presenting an opportunity to establish clean alternative energy storage solutions globally.

Green methanol is a synthetic fuel produced renewably and without polluting emissions, and can be produced from green hydrogen. This chemical compound can be used as a low-carbon liquid fuel and is a promising alternative to fossil fuels in areas where decarbonisation is a major challenge.  

Aside from the maritime industry, green methanol can help decarbonise other hard-to-abate industries, including chemical and plastics. 

“The addition of a facility in this area will provide bunkering solutions for those mainliners who have ordered green methanol powered vessels and is aligned with AD Ports Group’s overall decarbonisation strategy and expansion into clean energy liquid bulk storage,” the Group added.

Captain Ammar Mubarak Al Shaiba, CEO – Maritime & Shipping Cluster, AD Ports Group, said: "By signing this MoU with Orascom Construction who have vast international experience in bulk liquid terminals for Methanol storage, and Transmar, who have decades of expertise in this region and within terminal operations, AD Ports Group and its subsidiaries are taking a significant step towards the sustainable future of energy.”

“This initiative not only aligns with the UAE's decarbonisation goals but also accelerates the energy transition in shipping, positioning us at the forefront of the green hydrogen revolution and enabling us to contribute to global environmental stewardship and economic diversification."

 

Photo credit: AD Ports Group
Published: 29 May 2024

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