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VPS: Rising fuel quality issues linked to rising fuel costs

Pearson Correlation Coefficient value of 0.701 shows rise of crude oil price leading to reduced bunker fuel quality and an increase of marine fuel off-specs.

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Steve Bee, Group Commercial & Business Development Director of marine fuels testing company VPS, recently shared his thoughts with Singapore bunkering publication Manifold Times on the relationship between the price of crude oil and bunker fuel quality. 

13 June, 2022

Over the past few years, the world appears to have moved from one crisis to the next. Most recently, the COVID pandemic causing huge global disruption and restrictions to people and businesses, followed by the recent Russia-Ukrainian conflict and concerns over the innocent loss of lives and the greater worry of potential escalating conflict.

For global shipping, both of these events have given rise to many additional challenges to which ship owners and operators have either had to overcome or continue to tackle.

One key concern for the industry is the escalating cost of fuel due, in the main,to the Russian-Ukrainian war, an issue which is also impacting upon every walk of life. For shipping, the cost of fuel has always been the major cost in relation to every single voyage and the demand for good quality fuel, at competitive prices, remains paramount, especially in these times of significantly increased costs.

However, in a recent in-depth study carried out by VPS during Q1-2022, a strong correlation between crude oil price and bunker fuel off-specs was identified. Based on data covering the past 10 years and using a huge dataset of our 1.2 million fuel samples tested during this period, a correlation can be shown, which is graphically illustrated in Graph 1:

VPS: Rising fuel quality issues linked to rising fuel costs

The relationship between the price of crude oil and bunker fuel quality (measured by the number of off-spec samples) was measured using the Pearson Correlation Coefficient giving a value of 0.701, indicating a strong correlation. This correlation shows that an increase in crude oil price will result in reduced bunker fuel quality and an increase in marine fuel off-specs.

In recent weeks, VPS has seen an increase in the number of Bunker Alerts (BAs) issued corresponding with crude oil price, with a 60% increase this year versus the corresponding period in 2021. It should be noted that VPS only issues a BA when we have an off-spec parameter for 3 vessels within one week for the same port and parameter. The BAs that we have issued in 2022 have been across a range of 8 different ports for 9 different parameters and for the different bunker fuel types of VLSFO, HSFO and MGO. This suggests a general reduction in fuel quality across geographies caused by different factors and fuel types.

A good example of the type of -spec parameter that we have identified resulted in a major marine fuel quality issue identified in Singapore. This quality issue was in relation to chemical contamination of HSFO fuel delivered to over 200 vessels, which caused major operational problems to approximately 80 vessels. VPS led the way in identifying and quantifying the specific contaminants as several chlorinated hydrocarbons and assisted its customers in overcoming the subsequent issues of receiving and in many cases burning this affected fuel. The fuel had been supplied by two suppliers, with one actually providing the other with this contaminated product. It is alleged the first supplier blended a contaminated cutter stock to HSFO fuel, prior to it being sold.

VPS can only stress that the asset protection provided by proactive fuel management and testing has never been so important in protecting vessels from damage. Therefore, ISO8217 testing, plus chemical screening by GCMS-Headspace analysis, additional coldflow properties testing, such as wax appearance temperature (WAT) testing and routine fuel system checks (FSC), can provide even greater added-value to ship owners and operators, at a time of great uncertainty and increased risk, with respect marine fuel purchase and usage. 

Related: VPS provides update on bunker fuel contamination cases in Singapore
Related: VPS identifies potential bunker fuel contamination crisis unfolding at Singapore

 

Photo credit: VPS
Published: 14 June, 2022

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LNG Bunkering

CLPe and CNOOC form joint venture to offer LNG bunkering in Hong Kong

Joint venture will sell and supply LNG as bunker fuel to ships in port of Hong Kong, supporting the development of the LNG fuel bunkering sector in Guangdong-Hong Kong-Macao Greater Bay Area.

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CLPe and CNOOC form joint venture to offer LNG bunkering in Hong Kong

CLPe Holdings (CLPe), CLP Group’s wholly-owned subsidiary, recently signed a Cooperation Framework Agreement with China National Offshore Oil Company Guangdong Water Transport Clean Energy Company Limited (CNOOC) on the formation of a joint venture to provide liquefied natural gas (LNG) fuel bunkering services in the port of Hong Kong.

Under the agreement between CLPe and CNOOC, the planned joint venture will sell and supply LNG as bunker fuel to ships in the port of Hong Kong, supporting the development of the LNG fuel bunkering sector in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and further consolidating Hong Kong’s position as a leading international maritime centre.

Separately, CLPe signed an agreement to extend its partnership with TELD New Energy Company Limited (TELD) on electric vehicle (EV) charging and other innovative energy services in the GBA.

“The two agreements will bring together the industry-leading expertise and experience of CLP and our partners to enable the transportation sector’s low-carbon development in the GBA, aligning with the Action Plan on Green Maritime Fuel Bunkering recently issued by the Hong Kong Government, which promotes the city’s growth as a high-quality green maritime fuel bunkering centre to steer the shipping industry’s smart and green transformation,” said CLP Holdings Limited Chief Executive Officer and Executive Director T.K. Chiang. 

Hong Kong-listed CLP Holdings Limited is the holding company for the CLP Group, which has a diversified portfolio of generating assets that uses a wide range of fuels including coal, gas, nuclear and renewable sources

“The superior capabilities of CNOOC and TELD will help CLP expand our energy infrastructure and solutions business in the GBA, and deliver the best technologies and services to LNG fuel bunkering and EV charging customers.”

Related: Hong Kong unveils action plan to become green maritime bunkering centre

 

Photo credit: CLP Group
Published: 4 December, 2024

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Methanol

VPS examines methanol as a marine fuel for decarbonisation

Steve Bee of VPS explores methanol’s potential as a bunker fuel, the challenges ahead, industry standards to support its usage and VPS’s role in supporting this transition.

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Steve Bee, Commercial Director of marine fuels testing company VPS, on Tuesday (3 December) explored methanol's potential as a marine fuel, the challenges ahead, industry standards to support its usage and VPS's role in supporting this transition: 

Introduction

It’s very apparent, global shipping’s drive to decarbonise is well underway. The ship-building profile is changing dramatically, highlighted by the 2023 order book showing 539 new builds capable of running on low-to-zero carbon fuels, being ordered. This equates to 45% of all orders in terms of gross tonnage. LNG dual-fuel vessels are currently the most popular vessels of choice, but Methanol-capable vessels have gained traction. Looking at Jan-Sept 2024, 49% of the gross tonnage on order was for vessels configured to be alternative fuels ready, with this specific order book growing by 24% year on year. It’s obvious that shipping is keeping its options very much open and looking for as much flexibility as possible, when it comes to the fuel choices for its ships.

The industry currently bunkers 230 Million mt of fuel per year. Burning this fuel equates to emissions of 716M mt of CO2-equivalent, as the majority of the fuel burnt continues to be traditional fossil fuels. However, the list of environmental legislation and directives to reduce emissions from shipping is ever-increasing in order to reduce SOx, NOx, Particulate Matter, CO2, Methane and other Green House Gases.  It is this regulatory demand which is driving the developments of numerous alternative low-to-zero carbon fuels for marine use.

VPS has been and continues to be, at the forefront of fuels research & development and continues to pioneer and develop test methods for such fuels.

Methanol bunkers and bunkering facilities are growing with 13 ports now offering methanol. But this methanol is predominantly grey, and Tank-to-Wake emissions from grey methanol are similar to conventional fossil fuels. The maritime sector must look to use the sustainable “green” methanol options of e-methanol, bio-methanol, or blue methanol:

VPS examines methanol as a marine fuel for decarbonisation

IRENA forecast e-methanol will reach a production level of 250M mt and bio-methanol will reach 135M mt by 2050. 

Currently we see 39 methanol-powered ships on our sees, but a further 262 are on order.

As with all fuels, there are numerous pro’s and con’s to using methanol as a marine fuel: 

Methanol fuel handling and management is certainly easier than that for LNG, with retrofit costs being less expensive and easier. Plus, green methanol sources offer almost near-zero GHG emissions.

In terms of ECA compliance Methanol conforms to SOx, NOx and PM content. It is biodegradable, miscible with water and a liquid at atmospheric pressure, all of which are positive factors in terms of fuel management and handling.

As demand grows, methanol should become more cost competitive, with increasing number of ports providing methanol.

However, methanol has half the energy of maritime’s current fossil fuels and a Flash Point of only 12ºC. Current availability of green methanol, is still an issue, yet this year industry news has highlighted that some green methanol projects have been cancelled, eg one in Antwerp (Orsted) and Flagship-One in Sweden.

Over the past 2 years, VPS have made significant investments in CAPEX for new laboratory equipment, plus the training of laboratory staff, technical advisors and bunker quantity surveyors, in order to survey, sample and test methanol bunkers.

The summer of 2023 saw VPS act the partner of choice to Maersk and undertook work during the maiden voyage of the Laura Maersk. We surveyed, sampled and tested, the methanol loadings in Singapore, Port Said and Rotterdam. As part of the requirements, changes to bunkering practices and procedures included heightened H&S processes, increased levels of tank cleaning, the use of closed-sampling devices and the use of biofuel as the pilot fuel, which also required testing. Testing was under the International Methanol Producers and Consumers Association (IMPCA) specification, with the results all on specification from all three loadings.

Since then, VPS has also worked with OCI covering similar work on the ECO Maestro.

In October 2024, it was announced at SIBCON-24, that Singapore will release a new technical reference standard for Methanol before year end, which covers fuel transfer, quality and quantity measurements as well operational and safety instructions as well as crew training. VPS has been closely involved in the development of this new Methanol Standard by being part of the Working Group.

This same group will also release a similar standard for Ammonia in 2025.

The announcement from Singapore was followed by a further notification from the International Standards Organisation (ISO) in November 2024. The ISO announcement highlighted the release of the publication of the first edition of their international standard for methanol as marine fuel, ISO 6583:2024.  This standard sets the requirements and limits for three methanol grades for marine: MMA, MMB and MMC. It uses the IMPCA specifications as a starting point, with some properties less critical for marine and other fuel related aspects not covered. Grade MMC allows for wider tolerances in certain characteristics compared to MMB, while MMA includes additional requirements for lubricity and cleanliness. The new Singapore Methanol Standard will make reference to the ISO 6583 for quality requirements under its custody transfer section.

Summary

As decarbonisation and legislation drives the development of low-to-zero carbon fuels, demand for methanol will grow as it provides an excellent way to achieve immediate reductions of emissions compared to fossil fuels.

VPS are experienced in providing methanol surveying, sampling and testing work and capable of offering key technical support to our customers.

All of this is evidence that the global shipping industry is well on its way and intent on delivering upon its decarbonisation goals, but with many challenges still to overcome.

Related: SIBCON 2024: Singapore launches two new bunkering standards, revises third benchmark
Related: ISO publishes international standard for methanol as a marine fuel

 

Photo credit: VPS
Published: 4 December, 2024

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Shipping Corridor

Ports of Tyne and IJmuiden launch Green North Sea Shipping Corridor project

Success of the project will drive the development of port infrastructure for electrification and the bunkering of clean powered vessels, says Matt Beeton, CEO at Port of Tyne.

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Ports of Tyne and IJmuiden launch Green North Sea Shipping Corridor

Port of Tyne on Tuesday (3 December) said it launched a new project to create the Green North Sea Shipping Corridor, between the Port of Tyne in North East England and the Port of IJmuiden, situated directly by the sea at the entrance to the North Sea Canal Area and close to Amsterdam. 

The port said the project is part of a GBP 9million (USD 11.4 million) investment announced by Maritime Minister Mike Kane in October, to decarbonise shipping and turbocharge green jobs, from which the port was successful in winning the International Green Corridors Fund.

During a visit, representatives from each organisation which includes the two ports as well as Copenhagen-listed transport and logistics company DFDS, London-listed environmental, engineering and strategic consulting company Ricardo plc and maritime data and communication provider KSVA, set in motion the scheme.

“This initiative aligns with the partners’ commitment to sustainability and plans for DFDS to target a significant reduction in CO2 emissions, by transitioning to methanol-fuelled RoRo/RoPax vessels, driving the shift towards a greener future for global trade,” Port of Tyne said in a social media post. 

Separately, Ricardo said it will be the lead environmental consultancy in the next phase of the development of the green corridor project. 

“Ricardo will provide its expertise and insight in sustainable shipping and low-carbon fuels choice to help determine a viable path for decarbonisation between the two ports,” the firm said. 

Matt Beeton, CEO at the Port of Tyne, said: “This initiative represents another step forward for the port in our sustainability journey. By establishing this green corridor between the Port of Tyne and the Port of IJmuiden, we aim to significantly reduce carbon emissions between the Northeast of England and northern Europe, with the aim of saving up to 850,000 tonnes of CO2 annually.”

“The success of this project will bring more green jobs to the region and drive the development of port infrastructure for electrification and the refuelling of state-of-the-art clean powered vessels.”

Peter van de Meerakker, Managing Director of Zeehaven IJmuiden N.V. - Port of IJmuiden, said: “With the ‘zero emission’ new tonnage of DFDS, we are taking an important step forward, since a lot still needs to be done on both sides of the North Sea and this project helps enormously speed up and achieve our goals.”

 

Photo credit: Ricardo
Published: 4 December, 2024

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