Alternative Fuels

SIBCON 2022 Interview: Eaglestar discusses challenges and possible solutions in embracing ammonia as a bunker fuel

Ammonia availability, bunkering facilities, storage, and transhipment are the key challenges in the ammonia bunkering supply chain, shares Capt. Peter Liew, Managing Director/Chief Executive Officer of Eaglestar.

Published

2 years ago

October 11, 2022

Admin

The following interview with Capt. Peter Liew, Managing Director/Chief Executive Officer of Eaglestar, is part of coverage for the upcoming Singapore International Bunkering Conference and Exhibition (SIBCON) 2022, where Manifold Times is an official media partner. Eaglestar is a world-class provider of global integrated marine services and a member company of the MISC Group.

Capt. Peter Liew gives his take on how shipowners can decide between the types of alternative fuel solutions for their new and existing assets and elaborates on MISC Group’s roadmap to adopting ammonia as a bunker fuel. He also shares challenges the shipping industry will face in embracing ammonia as a marine fuel with possible solutions to overcome them.

MT: What is MISC’s view and roadmap on the adoption of ammonia as a bunker fuel?

View

MISC is supportive of the various alternative fuels and technology that will help us to achieve our net-zero greenhouse gas (GHG) emissions commitments by 2050. We have revised our baseline year to 2008 to align with the International Maritime Organization’s (IMO) 2030 and IMO 2050 targets.

MISC believes that ammonia is one of the viable pathways to support decarbonisation in the maritime industry, in line with the IMO’s 2050 goals. We also believe that collaboration is vital to support the overall agenda of decarbonising the maritime industry. It is important for the leaders and industry players to continue engaging and exploring together the opportunities that are arising and how the risks related to new fuel adoption can be managed through collaborations.

MISC is a proud partner of The Castor Initiative, a multi-stakeholder global coalition that is committed to jointly developing commercially viable deep-sea zero-emission vessels (ZEV) fuelled by ammonia by 2030 in line with the IMO’s GHG aspirations.

Moving forward, MISC Group will progressively renew its fleet to high-efficiency dual-fuel engine vessels from now to 2030. The Group will also execute continuous operational efficiency improvements with the aim of reducing the energy consumed on voyages as well as implement strategies to optimise the technical and operational efficiencies of our vessels. MISC expects to progressively change its fleet to ZEV from 2031 as part of its net-zero GHG emissions commitment by 2050.

Road Map

MISC believes that our pathways towards decarbonisation by 2050 will be achieved by simultaneously executing our short and medium term goals together.

Our transition plan between 2021 to 2030, is to progressively renew our fleet with high- efficiency, dual-fuel vessels, in addition to promoting advanced technologies that minimises emissions from our vessels. To complement our efforts as a member of The Castor Initiative, the MISC Group is committed to developing zero-carbon emission vessels with our strategic partners.

In the long term, starting 2031 (if not sooner) until 2050, we will progressively undergo a fleet renewal to zero-carbon emission vessels. We will also focus on continuous operational efficiency improvements by adopting new technological innovations on existing and new builds to continuously improve energy efficiency and reduce carbon emissions.

For carbon removal technology which depends on its viability, we aim to adopt carbon capture retrofits in our existing newer vessels to remove excess carbon emissions. Carbon offset is one of the key building blocks in MISC’s net-zero GHG emissions commitments by 2050 to compensate for residual emissions not possible to be abated.

MT: As ship/crew/technical manager, how does Eaglestar support in achieving MISC’s decarbonisation goal?

Eaglestar plays a pivotal role in supporting MISC Group’s decarbonisation journey in terms of developing our global maritime workforce, and our subject matter experts are capable of addressing the spectrum of technical and operational challenges that confront the introduction of alternative fuels. Our collective wealth of expertise coupled in ship management puts us at the forefront of executing MISC Group’s decarbonisation goals.

Eaglestar provides a comprehensive range of integrated marine services and delivers a suite of solutions ranging from fleet management and operations and maintenance (O&M) to crew management and manning services, dry-docking management as well as project management services for newbuild construction, conversion projects and vessel repair life extension for internal and external customers.

We operate and maintain a modern and diversified fleet of vessels including LNG carriers (conventional steam and DFDE), Ethane carriers, LNG Bunkering Vessel (LBV), Crude Oil carriers, Dynamic Positioning shuttle tankers (DP2 standard), Product/Chemical vessels (Type II), LNG Floating Storage Units (FSUs), Marine Containment Vessels and Petroleum tankers(Aframax) propelled by LNG dual fuel engines (LNG and Fuel Oil) supported by a team of highly skilled, competent and dedicated professionals. Our Centre of Excellence leverages upon the combined resources and experience of more than 60 years as proven by our excellent HSE performance in the shipping industry, enabling us to better serve key vessel segments in various markets and to achieve short-medium and long-term decarbonisation goals.

Eaglestar’s advantage as one of the earliest ship managers of LNG and dual-fuel vessels within the maritime industry, enables us to play a vital role to support this aspiration by contributing our extensive knowledge and capabilities in technological solutions and maritime talents. We have embarked on the initiatives to fortify our human capital and people capabilities to support MISC Group as well as The Castor Initiative’s aspirations which will ultimately contribute to the maritime industry’s decarbonisation goals.

MT: Which types of vessels will be ideal candidates to consume as ammonia as a bunker fuel and why?

In our opinion, any vessel can be the ideal candidate to consume Ammonia as fuel. In deciding the types or alternative fuel solutions for its new and existing assets, a ship owner should take the following matters, among others, into consideration.

The readiness/maturity of the specific fuel technology.
The containment system requirements for safe storage and bunkering arrangements.
The fuel availability and bunkering infrastructure, and trading routes.
The people’s capability for the safe operation and handling of toxic substances.
The required rules and regulations to meet industrial strict safety and technical standards requirements.

It is undeniable that there may be potential risks that are associated with new fuel technologies. Hence collaboration and sharing of those risks among all industry players along the value chain are imperative. However, building a new vessel without an alternative fuel solution, in our opinion, is careless and irresponsible.

MT: What kinds of challenges will the shipping industry face when embracing ammonia as a bunker fuel? What are the solutions?

Ammonia, in its natural form, as we all know, is a toxic substance, and the challenge is in ensuring that the fuel can be transported, stored, and consumed safely. Our seafarers must be trained and equipped with the skills and knowledge required to handle ammonia in the safest manner. Existing international rules, regulations, and controls need to address these specific risks.

Ammonia as a fuel is a new technology, thus it has technical and operational challenges. Hence it is imperative, that time should be given to develop this technology without pressure, and it is equally important for all parties who are involved in the development of this technology to work together rather than against each other.

The availability of ammonia as fuel and its pricing in relation to conventional fuel are challenges that need to be addressed. It is crucial to have the commitment from fuel suppliers to make the fuel available at the right location and quantity. The price disparity between ammonia and conventional fuel, if not properly addressed, could potentially derail the commercialisation of ammonia as bunker fuel. Hence, it is imperative to level the playing field by instituting a global carbon tax or carbon levy to make ammonia a viable fuel.

In summary, it is true, like any other fuel technology; ammonia fuel technology confronts multiple challenges. Consequently, it is vital that all industry players and stakeholders along the value chain (regulators, policymakers, authorities, shipyards, classification society, engine manufacturers, ammonia producers, facility providers, charterers, and financiers/bankers) collaborate to overcome these challenges and equally share the risks associated with this fuel technology.

MT: What changes will the bunkering industry need to undergo in order to support shipping’s switch to ammonia bunkers?

Ammonia availability, bunkering facilities, storage, and transhipment are the key challenges in the bunkering supply chain. With the currently established global grid of ammonia terminals and storage, a similar bunkering grid could be established quickly and cost-efficiently by converting small gas tanker vessels to bunker barges. In the long-term, marine bunkering infrastructures should include bunkering from both bunker ships and onshore storage. Ramping up production is required to meet at least 30% of marine fuel demand in 2050, which is around 150 million tons/year.

Special considerations should be made to risk assessment measures to prevent accidents. This would take into consideration the probability of leakage, gas detection systems, and certification along the supply chain. Also, the development of new regulations and rules are needed and could very much be extended and fortified from existing rules. The bunkering operation itself would be very similar to when bunkering other gaseous fuels, except the main hazard would be the fuel toxicity rather than flammability, and the procedures for ammonia bunker barges need to be developed. It is crucial to develop the people’s capabilities to trans-ship and handle ammonia as bunker fuel, safely and effectively.

For certification and traceability, while traditional fuels have a wide and complex range of properties, ammonia is a clean fuel consisting of only one compound, which eliminates all variations between types and qualities, thereby greatly simplifying fuel sourcing, qualification and analysis.

MT: Is the ammonia bunker fuel future nearby, or still far away?

It depends on how one perceives what is near or far away. Currently, ammonia in many ways, in

our opinion, is relatively the most matured and viable zero-carbon fuel technology solution. There are many various active industry initiatives that are currently and seriously pursuing ammonia as bunker fuel.

Decisive and affirmative government actions and investment commitment are fervently needed to scale up the use of ammonia as bunker fuel. The Castor Initiative is one of the advance groups of like-minded industry stakeholder collaboration that is currently pursuing to deliver a dual fuel ammonia vessel in 2025/26.

A list of other interviews conducted by Singapore bunkering publication Manifold Times on occasion of SIBCON 2022 are as follows:

Photo credit: Eaglestar
Published: 11 October, 2022

Alternative Fuels

DNV: Use of ammonia as a bunker fuel among highlights in IMO MSC 109

Amendments to the IGC Code to enable the use of ammonia cargo as fuel were adopted and interim guidelines for the general use of ammonia as fuel were approved during session.

Published

11 hours ago

December 9, 2024

Admin

Classification society DNV on Saturday (7 December) shared a statutory news article that provides a summary of the 109th session of the International Maritime Organization’s (IMO) Maritime Safety Committee (MSC 109) including adopted amendments to the IGC Code to enable the use of ammonia cargo as fuel and approved draft interim guidelines for ammonia as a marine fuel.

The following is an excerpt from the news update relating to bunker fuels:

The 109th session of the IMO’s Maritime Safety Committee (MSC 109) was held from 2 to 6 December 2024. Amendments to the IGC Code to enable the use of ammonia cargo as fuel were adopted, and interim guidelines for the general use of ammonia as fuel were approved. The IGF Code was amended to improve the safety of ships using natural gas as fuel. MSC 109 further approved draft SOLAS amendments to enhance the safety of pilot transfer arrangements and progress was made on the new safety code for Maritime Autonomous Surface Ships.

Meeting highlights

Adopted amendments to the IGC Code to enable the use of ammonia cargo as fuel
Adopted amendments to the IGF Code for ships using natural gas as fuel
Approved draft interim guidelines for ammonia as fuel
Approved draft amendments to SOLAS Regulation V/23 and the related performance standards to improve the safety of pilot transfer arrangements
Advanced the non-mandatory Code on Maritime Autono- mous Surface Ships (MASS)

Amendments to mandatory instruments

Ammonia cargo as fuel (IGC Code) MSC 109 adopted amendments to Paragraph 16.9.2 of the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code) to enable the use of ammonia as fuel on ammonia carriers.

An MSC circular to encourage the voluntary early implementation of the amendments to Chapter 16 was approved.

The amendments will enter into force on 1 July 2026.

Safety of ships using natural gas as fuel (IGF Code)

MSC 109 adopted amendments to the International Code of Safety for Ships Using Gases or Other Low-flashpoint Fuels (IGF Code), based on experience with the code since its entry into force in 2017.

The amendments include:

Clarified application provisions
Alignment with the IGC Code on suction wells for fuel tanks extending below the lowermost boundary of the tank
Alignment with the IGC Code on discharge from pressure relief valves to discharge to tanks under certain conditions
Clarified requirements to fire insulation for deck structures in relation to fuel tanks on open deck
Clarified requirements for hazardous ducts through non-hazardous spaces and vice versa
Updated requirements for the hazardous zone radius for fuel tank vent mast outlets, increasing to 6 metres for zone 1 and 4 metres for zone 2

The amendments will enter into force on 1 January 2028.

Goal-based new ship construction standards

Goal-based standards (GBS) for the new construction of bulk carriers and oil tankers are, conceptually, the IMO’s rules for class rules. Under the GBS, IMO auditors use guidelines to verify the construction rules for bulk carriers and oil tankers of class societies acting as Recognized Organizations (Resolution MSC.454(100)).

Initial GBS verification of Biro Klasifikasi Indonesia (BKI) BKI has requested GBS verification of their ship construction rules for bulk carries and oil tankers. MSC 109 agreed that the BKI rules comply with the GBS, provided non-conformities and observations are rectified and verified in a new audit.

North Atlantic wave data (IACS Recommendation No. 34, Revision 2) MSC 109 noted that IACS is currently undertaking a review of its Common Structural Rules (CSR) for bulk carriers and oil

tankers to reflect advances in data, materials, technologies and calculation methodologies. The CSR are implemented in the individual class rules of the IACS members, which are subject to compliance with the GBS.

MSC 109 further noted that IACS has now issued a revision of the North Atlantic wave data to ensure more scientific data as a basis for the rule formulas in the CSR. The new scatter diagram in Revision 2 of IACS Recommendation No. 34 shows the probability of occurrence of different sea states and is based on wave data from advanced hindcast wave models combined with ships’ AIS data for all SOLAS vessels in the period from 2013 to 2020.

MSC 109 agreed that an observation from the initial CSR audit in 2015, that the scatter diagram in Revision 1 of IACS Recommendation No. 34 was based on past statistics, was now considered addressed.

MSC 109 further invited IACS to provide more information about the assumptions, modelling and technical background for Revision 2 of IACS Recommendation No. 34, and agreed that the GBS audit of the revision to follow should be carried out in conjunction with the consequential rule changes in the CSR.

New technologies and alternative fuels

Identification of gaps in current IMO instruments MSC 109 continued its consideration of potential alternative fuels and new technologies to support the reduction of GHG emissions from ships from a safety perspective. The intention is to identify safety obstacles, barriers and gaps in the current IMO instruments that may impede the use of the various alter- native fuels and new technologies.

MSC 109 agreed to add “swappable traction lithium-ion battery containers” to the list of alternative fuels and new technologies. The list already includes fuels and technologies such as ammonia, hydrogen, fuel cell power installations, nuclear power, solar power, wind power, lithium-ion batteries and supercapacitor energy storage technology.

Recommendations to address each of the identified barriers and gaps in the IMO regulatory framework will be considered in a Correspondence Group until MSC 110 (June 2025). Application of the IGF Code

MSC 109 agreed on draft amendments to SOLAS to clarify that the IGF Code applies to ships using gaseous fuels, whether they are low-flashpoint or not. The term “gaseous fuels” was added to the definitions in SOLAS Regulation II-1/2 and to the application provisions of SOLAS Regulations II-1/56 and 57.

The draft amendments are expected to enter into force on 1 January 2027, subject to adoption by MSC 110 (June 2025).

Carriage of cargoes and containers

Ammonia as fuel

MSC 109 approved draft interim guidelines for the safety of ships using ammonia as fuel.

Ships carrying liquefied gases in bulk (IGC Code)

MSC approved draft amendments to the IGC Code to incorporate the large number of Unified Interpretations developed since the latest major review of the code, which entered into force in 2016. The primary objective of the draft amendments is to remove ambiguity and promote the consistent implementation of the IGC Code requirements.

Photo credit: CHUTTERSNAP on Unsplash
Published: 9 December, 2024

Methanol

Methanol Institute welcomes HIF Global as its newest member

HIF Global will collaborate with industry leaders, policymakers, and stakeholders to promote the adoption of methanol-based solutions and e-Fuels in the transition to a low-carbon future.

Published

11 hours ago

December 9, 2024

Admin

HIF Global joins Methanol Institute as its newest member

The Methanol Institute (MI) on Thursday (5 December) welcomed HIF Global as its newest member.

HIF Global is an innovator in the production of e-Fuels, offering sustainable alternatives to fossil fuels that are compatible with today’s transportation and industrial infrastructure.

As part of MI’s membership, HIF Global will collaborate with other industry leaders, policymakers, and stakeholders to promote the adoption of methanol-based solutions and e-Fuels in the transition to a low-carbon future.

MI said HIF Global’s pioneering approach combines renewable energy with technology to produce green hydrogen through electrolysis and capture CO₂ from atmospheric, biogenic, and industrial sources.

These components are then synthesised to create e-Fuels, including e-Methanol for ships, e-SAF for planes, and e-Gasoline for cars, which are crucial to decarbonizing global transportation and reducing greenhouse gas emissions.

At the heart of HIF Global’s operations is HIF Haru Oni in Magallanes, Chile, the world’s first operating e-Fuels facility, which was inaugurated in December 2022. The company is scaling its production globally, with projects underway in the United States, Chile, Australia, Uruguay and Brazil. Its most advanced commercial-scale project, the HIF Matagorda e-Fuels Facility in Texas, is designed to produce 1.4 million metric tons (466 million gallons/1.76 billing liters) of e-Methanol annually once fully operational.

“We are thrilled to welcome HIF Global to the Methanol Institute,” said CEO of MI Greg Dolan.

“HIF Global’s work in e-Fuels, particularly e-Methanol, is a crucial contribution to the energy transition. Their innovative approach underscores methanol’s potential as a key solution for decarbonizing transportation and industry, and we look forward to collaborating to accelerate this transformation.”

Cesar Norton, President and CEO of HIF Global, said: “e-Fuels are essential to achieving a sustainable future. We applaud the Methanol Institute for their leadership in methanol markets and join them to drive forward the vision to expand e-Methanol based e-Fuels that support our global circular economy.”

“Together we will advance the energy transition by pioneering e-Methanol solutions that utilize existing infrastructure to inspire innovation and reduce costs.”

Photo credit: Methanol Institute
Published: 9 December, 2024

Biofuel

ENGINE: The Week in Alt Fuels: Golden B100 window

In the past week, ENGINE has seen delivered 100% used cooking oil methyl ester biofuel (UCOME B100) indicated way above its estimated UCOME cargo price in Singapore.

Published

11 hours ago

December 9, 2024

Admin

Bunker tanker “MT MAPLE” owned Global Energy Group

Sometimes first-movers can gain an advantage by offering products that others can’t with handsome margins to show for.

That is what’s happened in certain biofuel bunker markets. Bunker suppliers with chemical bunker tankers seem to be reaping the rewards of their investments with sizeable bunker delivery price premiums.

In the past week we have seen delivered 100% used cooking oil methyl ester biofuel (UCOME B100) indicated way above our estimated UCOME cargo price in Singapore. If bunker suppliers fix stems at these price levels, it could help their payback times on chemical tanker investments.

To break down our estimate, PRIMA Markets has assessed UCOME FOB China – a major producer - at $1,000-1,015/mt in the past week. The freight rate for a 40,000 mt medium-range tanker sailing from China to Singapore has been $15/mt. Delivered B100, meanwhile, has been indicated at $1,290-1,300/mt, which leaves $260-285/mt to cover logistics costs like storage, handling and delivery to a receiving ship with a chemical bunker tanker.

That looks like a chunky bunker margin compared to estimates from the ARA, where we have recently seen delivered UCOME B100 fixed at both $5/mt premium and $5/mt discount to Argus UCOME barges, a key benchmark for UCOME pricing in the region. B100 bunker prices are sharper in the ARA not just because of a more established pricing index, but because a greater number of suppliers can offer B100. They are not bound by the same biofuel delivery vessel restrictions as in other bunker locations.

So-called IMO Type II chemical tankers - which can also typically supply methanol - are required to be allowed to supply bio-bunker blends above 25% in ports outside of the ARA, where stems are delivered by river barges exempt from the IMO rules. A growing number of bunker suppliers have invested in them, but only a few of these vessels have entered into operation yet.

Vitol Bunkers, Global Energy, Fratelli Cosulich, BMT, Stena Oil and Peninsula are among the few suppliers with chemical bunker tankers in their fleets that can deliver B100 stems in non-ARA ports today. Singaporean Consort Bunkers has placed orders for up to 20 of these chemical tankers, while Fratelli Cosulich has another two on order and Peninsula-affiliated Hercules Tanker Management has six with an option for another four.

TFG Marine’s Singapore entity will take four of Consort Bunker’s vessels and one of Fratelli Cosulich’s vessels on time charters. TotalEnergies and Mitsui & Co. have both supplied B100 in Singapore with Global Energy’s Maple chemical tanker.

Because of early entries into this burgeoning B100 market, these suppliers are among the only 1-3 suppliers in a given bunker location. Biofuel bunker demand to date has mostly revolved around Scope 1 and 3 emission reductions, with container liners and car carrier companies as typical uptakers.

But with FuelEU Maritime less than a month away, more companies will be enquiring about stems with higher biofuel contents. They will run some vessels on B100 and average out their greenhouse gas (GHG) intensity reductions across a pool of vessels, or sell their compliance surpluses in one of the many over-the-counter markets that have popped up.

That leaves a golden pricing window for forward-thinking bunker suppliers as biofuel goes from niche to necessity for more EU-trading vessels.

In other alternative news this week, a string of headlines showed that LNG is still very much in vogue.

LNG bunker supplier Titan has expanded a deal to supply mass-balanced liquified biomethane (LBM) to Norwegian shipping firm United European Car Carriers' (UECC) dual-fuel LNG vessels. Since July, over 95% of the fuel delivered to UECC’s vessels by Titan has been mass-balanced LBM.

More and more fleet renewal programmes boast lower-carbon vessels. A.P. Moller-Maersk has had bragging rights for its methanol-capable container ship orders this decade, before recently pivoting to LNG orders and getting some flack from environmental organisations. This week it put in orders for 20 container ships with LNG-capable engines, and with that it concluded its fleet renewal order target this time around.

And Canadian bunker supplier Seaspan Energy has delivered its first ship-to-ship LNG bunker stem to a container ship in California’s Port of Long Beach.

By Erik Hoffmann

Photo credit: Global Energy Trading
Source: ENGINE
Published: 9 December, 2024