Major shipping and energy players took the stage to discuss their respective companies’ plans in the coming years at the 22nd edition of Singapore International Bunkering Conference, also known as SIBCON 2022, on Thursday (6 October).
Bart Hellings, Director, GoodFuels, who was moderating the session Alternatives Business Case: Green Methanol, Biomethane and Biofuels asked panellists on the transition from fuel oil and LNG to green methanol, biomethane and biofuels.
He also posed questions on availability and infrastructures for alternative bunker fuels, including business cases for the use of green fuels and how important sustainable marine fuels are to shipowners.
Questions answered by panellists included: If shipowners are willing to share with charterers the cost of more expensive lower emission fuels, and how will green methanol avails impact the route flexibility of Maersk’s future methanol-powered vessels, and more.
A.P. Moller – Maersk
“Maersk has a goal of being carbon neutral in 2040 and we are working on three main pathways,” said Berit Hinnemann, Head of Decarbonisation Business Development and interim Head of Green Fuels Sourcing, A.P. Moller – Maersk.
“The first is biofuels which we are already using now and is part of our green shipping product as well.
“The second is green methanol which we have 19 vessels on order; and though the solution is technically ready the challenge is still fuel supply.”
Hinnemann further explained Maersk is exploring green ammonia but did not see it being “technically ready” just yet.
“There are efforts to focus on technical and safety aspects of this. For green methanol, we have formed green methanol partnerships and are working full speed ahead on implementing that solution,” she said.
On 5 October, Maersk announced it has ordered a further six large ocean-going vessels that are able to sail on green methanol. The six vessels will be built by Hyundai Heavy Industries (HHI) and have a nominal capacity of approx. 17,000 TEUs to replace existing capacity of the Maersk fleet.
When asked if the availability of green methanol will impact Maersk vessel flexibility in routes, Hinnemann replied the vessels’ tank size is sufficient to provide enough fuel for a full round trip on methanol.
“This gives us some flexibility in the beginning, but in terms of infrastructure and so on it is new,” she explains.
“This, of course, means different challenges for us especially in the beginning as to how we deploy our vessels. Usually deployment is not affected by where fuel is available.
“But of course, infrastructure will be a challenge in the beginning. But again, the ability to make a full round trip gives us some options here.”
Farid Trad, Vice President Bunkering and Energy Transition of CMA CGM, said although it was well understood that liquified natural gas (LNG) is a great option as a transitional fuel, the global player in sea, land, air and logistics solutions believes all fuel alternatives need to be explored.
“We are investing in assets in energy power and methanol, scaling up bioenergy and optimising operation and processes,” he stated.
“We believe there are huge gains in reducing the carbon intensity of our assets. Recently, we announced the launch of a special energy fund of USD 1.5 billion spanned over five years to invest in the scaling up and acceleration of CMA CGM’s energy transition.”
While the cost of alternative fuels have been more expensive, he said the change will also bring value for stakeholders.
“It will be an investment that will bring other investments. Investments will be the way of doing business for everybody. At the end of the journey, there will be new value created for everybody and I think this will be the conviction of everybody taking this on.”
Peter Björkborg, Sustainability and Transformation Manager of Stena Bulk said the tanker shipping company is focusing on two main marine fuels which are biofuels and methanol in the coming years.
“Biofuel is definitely one of the fuel options we’re looking into where we have been running a number of projects on it as we did with BP and GoodFuels as well as with other bunker suppliers. I believe it works and we should be able to get past the trial phase of biofuel by now,” he said.
He noted the firm was not concerned on technological and operational issues of running biofuel as a bunker fuel, but more worried on the scale of biofuel production on the commercial end and establishment of quality standards for the material.
“We have experience of using methanol going back to 2015, so we know it works and that it’s a very good fuel in many aspects,” he shared.
“This has been a focus area for us not because we believe it’s the only option but it is the option we know best and that we believe in.”
“We also believe it has a credible pathway in the long run not only to address the SOx and NOx issues but also to seriously tackle greenhouse gas emissions. So I think the most critical part of our strategy is to be very open, agile and adaptive.”
He recommended partnerships between marine fuel suppliers and customers to form long term commitments for risk sharing and costs on the back of building up the availability and infrastructure of alternative bunker fuels.
Björkborg said as a shipowner, Stena was willing to share the cost of decarbonising when in charter with more expensive low emission fuel on board.
Biofuels have remained as a main focus for major energy company BP, stated Hugh Roberts, Regional Marine Manager – EU & SA of BP, during the panel discussion.
He said biofuels will be a massive part of the firm’s portfolio in its short to mid-term plans and also shared the oil major if looking into solutions to scale up other low carbon fuels such as hydrogen and ammonia.
“These are areas that I know a lot of large companies are looking into at the moment. But for us to get to that stage, cross sector engagement is absolutely critical,” he believed.
He shared availability of alternative fuels such as biofuels have been challenged with significantly different mandates as seen in Europe despite massive amounts of voluntary demand for biofuels.
Another challenge the product faces is also the production and sourcing of feedstock.
“But to diversify, it requires massive engagement across a range of parties such as manufacturers, customers, and regulators which is a highly complex task on the back of competition between different sectors,” he said.
Concluding remarks from moderator
To conclude, moderator Hellings said: “Overall it was inspiring to hear from all participating panellists that these major shipowners and industry leaders have each individually built impressive track records when it comes to experimenting with alternative fuel options over the past few years, focusing on decarbonising their fleet.”
“Even though the fuel types they invest in differ from company to company, it was interesting to conclude that these three fuels play a big role as a transition fuel for every panellist, probably for the next decade or two.”
“Especially given that all panellists agreed that these fuels have proven their technological and operational readiness and are ready to be scaled up today already. Overall it was encouraging to zoom in to all these different decarbonisation strategies and to discuss important factors like logistics and technological readiness. We know for a fact that there is no one single solution when it comes to decarbonising global shipping, but dedicated panel discussions like these give us a glimpse into what this probable portfolio of solutions might look like.”
Manifold Times was an official media partner of SIBCON 2022; a series of articles related to the event written by the Singapore bunkering publication are as follows:
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Related: Singapore: MPA develops framework to support biofuel bunker fuel deliveries
Related: SIBCON 2022: SGTraDex enters MOU with six bunkering sector tech providers
Related: SIBCON 2022: S&P Global Market Intelligence and Bunkerchain in MoU
Related: SIBCON 2022: Singapore sets out to drive transformation in bunkering
Related: SIBCON 2022: Development of ISO 8217:2024 in progress; but ‘ineffective’ without industry adoption, foresees VPS
Related: SIBCON 2022 Interview: ExxonMobil to invest more than USD $15bn on GHG reduction initiatives by 2027
Related: SIBCON 2022 Interview: Eaglestar discusses challenges and possible solutions in embracing ammonia as a bunker fuel
Related: SIBCON 2022 Interview: Digitalisation in bunkering ops, can lower costs and enable decarbonisation, says StormGeo
Related: SIBCON 2022 Interview: Co-Convenors offer insights into Singapore’s upcoming Digital Bunker Document Standard
Related: SIBCON 2022 Interview: MFMs relevant for custody transfer of future liquid-based marine fuels, confirms Endress+Hauser
Related: SIBCON 2022 Interview: Clyde & Co discusses handling of bunker fuel quality disputes, alt fuels contracts
Related: SIBCON 2022 Interview: Singapore Bunkering TC Chairman shares republic’s direction on future marine fuel
Photo credit: Manifold Times
Published: 2 November, 2022
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