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IMO 2020

Wood Mackenzie: China MGO demand to rise 5 million mt by 2020

Shift of volume will come from Singapore market due to stricter policies for marine fuel specifications.

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Research and consultancy firm Wood Mackenzie believes demand for marine gas oil (MGO) at China will increase by about 5 million metric tonnes (mt) by 2020 due to the International Maritime Organization (IMO) sulphur cap.

“The Chinese government is making great effort to turn some major ports in to bunkering hubs by setting up free-trade zones in Zhoushan and Hainan, which are strategically located,” said Yujiao Lei, a consultant at the firm, as quoted in recent reports.

“As such, we expect 90 kb/d (around 5 million mt) of bunker demand to shift from Singapore to China in 2020 for international shipping.

“By generating this demand, the Chinese government is not only creating a bunkering industry but also providing a solution for its refining industry's diesel surplus.

“Additional marine fuel demand in China to meet IMO regulations will also put the country very close to Singapore in terms of total marine fuel demand.”

Lei, meanwhile, noted the Chinese government announcing the start of China’s emission control area (ECA) effective 2019; vessels will be required to use 0.5% sulphur limit marine fuel within 12 nautical miles of the coast in addition to berthing operations.

The government also suggested the implementation of a 0.1% sulphur cap on marine fuel by 2020, though this is to be subjected to further review.

“The new regulations demonstrate the central government’s strong commitment to fight pollution from mobile sources,” she notes.

“Coming only days after the announcement of the country’s ‘blue sky defence’ action plan, the extension of the ECAs is a clear sign that China will strive for 100% compliance when the IMO's global sulphur cap regulation starts in January 2020.”

According to Lei, China's bunker fuel demand currently exceeds 650 kb/d; the volume consumed is mainly fuel oil and MGO, where nearly two-thirds of it is used in inland waterways and the remainder in the coastal areas.

Nearly 300 kb/d of MGO is used as a bunker fuel, with varying sulphur levels, within inland waterways.

“To combat this, the government announced last month a unified diesel specification (China VI or 0.001% wt% sulphur) for marine use in China starting January 2019,” she says.

“In addition to MGO, about 100 kb/d of high-sulphur fuel oil (HSFO) is also consumed in the inland waterways. However, HSFO use in inland waters will no longer be allowed from 2019, unless the vessels are fitted with sulphur-reducing equipment, such as scrubbers.”

Lei expects a demand shift of 100 kb/d from HSFO to China VI diesel, which “should come as good news for Chinese refiners that receive higher prices for domestic diesel sales compared with exports.”

“However, this also means higher shipping costs for consumers and industries, such as power plants and steel, if the additional freight cost is passed on as vessels switch from HSFO to expensive China VI diesel,” she says.

Moving on, Lei believes the ECA extension in 2019 will have “minimal impact”.

“Firstly, the majority of marine traffic is currently concentrated in the existing ECAs, so the extension is unlikely to significantly affect shipping or provide upside to bunker demand,” she explains.

“However, shippers operating in the new ECA zones will have to make some changes, such as carrying dual fuels to comply with the regulation.

“Secondly, China's coastal ECAs only reach 12 nautical miles out to sea, and ships generally tend to slow down as they near the coast, so fuel consumption in these areas is minimal.”

Manifold Times in April interviewed several Singapore-based players who believe the republic will still remain a bunker hub come 2020.

Related: Singapore: Still the leading bunker hub come 2020, say players
Related: Singapore could lose some bunker market share to China by 2020

Published: 25 July, 2018
 

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Port & Regulatory

X-Press Feeders inks MoU with six European ports for green shipping corridors

Firm signed a MoU with Ports of Antwerp Bruges, Tallinn, Helsinki, HaminaKotka, Freeport of Riga and Klaipeda Port to develop infrastructure for provision and bunkering of alternative bunker fuels, among others.

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X-Press Feeders inks MoU with six European ports for green shipping corridors

Singapore-based global maritime container shipping company X-Press Feeders on Friday (5 April) signed of a memorandum of understanding (MoU) with six European ports: Port of Antwerp Bruges (Belgium), Port of Tallinn (Estonia), Port of Helsinki (Finland), Port of HaminaKotka (Finland), Freeport of Riga (Latvia) and Klaipeda Port (Lithuania).

This landmark agreement signifies a joint commitment to accelerate the establishment of green shipping corridors and the broader decarbonisation of the marine sector in Scandinavia and the Baltic Sea. Through this MOU, X-Press Feeders and the participating ports will pool resources and expertise to develop and implement sustainable practices for maritime operations.

Under the MOU:

  • Parties will work together to further develop infrastructure for the provision and bunkering of alternative fuels such as green methanol,
  • Encourage the development of supply chains for fuel that are zero or near to zero in terms of greenhouse gas emissions
  • Provide further training programs for port workers and seafarers with regards to the handling of alternative fuels
  • Leverage digital platforms to enhance port call optimisation
  • Parties will have regular meetings to update and discuss progress on actions for further developing green shipping corridors.

The MOU underscores the collective dedication to broader decarbonisation efforts within the maritime sector.

The collaboration between the parties will begin with the establishment of these two shipping routes:

  • Green Baltic X-PRESS (GBX): Rotterdam > Antwerp Bruges > Klaipeda > Riga > Rotterdam
  • Green Finland X-PRESS (GFX): Rotterdam > Antwerp Bruges > Helsinki > Tallinn > HaminaKotka > Rotterdam

These services are scheduled to commence in Q3 2024, marking a significant step towards more environmentally sustainable shipping services in Europe. This development is significant as these will be the very first scheduled feeder routes in Europe powered by green methanol, an alternative fuel that produces at least 60% less greenhouse gas emissions than conventional marine fuel.

X-Press Feeders’ green methanol is sourced from fuel supplier OCI Global. The green methanol is made from green hydrogen and the decomposition of organic matter, such as waste and residues. 

OCI’s green methanol is independently certified by the International Sustainability and Carbon Certification (ISCC) Association headquartered in Germany. The ISCC system promotes and verifies the sustainable production of biomass, circular and bio-based materials and renewables.

X-Press Feeders’ Chief Operating Officer, Francis Goh, said: “By working together – X-Press Feeders and the six partner ports – aim to efficiently implement green shipping corridors and lead the maritime industry in sustainability. We chose the Nordic and Baltic states as the first markets to deploy our green methanol powered vessels because we found the ports and our customers in these markets to be very receptive.”

“This MoU represents a significant milestone in our commitment to a sustainable future for the maritime industry. By collaborating with these leading European ports, we can collectively drive the adoption of green technologies that accelerate the decarbonisation of our industry.”

Vladas Motiejūnas, Harbor Master of the Port of Klaipėda, said: “In recent years, Klaipeda Port has taken significant strides towards sustainability. This year marks the commencement of construction for green hydrogen production and refuelling stations at the port, along with the implementation of shore-side power supply (OPS) stations for roll-on/roll-off ferries.”

“Furthermore, Klaipeda Port proudly enters 2024 with the Port Environmental Review System (PERS) certification, underscoring our commitment to environmental stewardship. Already, methanol bunkering operations are available at Klaipeda Port.”

“The integration of Klaipeda Port into environmentally sustainable shipping services by X-Press Feeders is a testament to our unwavering dedication to fostering a greener port.”

 

Photo credit: X-Press Feeders
Published: 8 April 2024

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LNG Bunkering

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

Bunker barge “FlexFueler001” delivered 110 mt of LNG bunker fuel to chemical tanker “Liselotte Esberger”, marking a milestone since it was the first time Titan delivered to a vessel of E&S Tankers.

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Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

LNG bunker fuel supplier Titan on Monday (19 February) said it executed a successful LNG bunkering operation for E&S Tankers, a joint venture of Essberger Tankers and Stolt Tankers as an operator of chemical tankers within Europe. 

The refuelling operation took place at the port of Antwerp on 15 January. 

“Our vessel, FlexFueler001, flawlessly delivered 110 mt of LNG to the Liselotte Esberger, marking a milestone since it is the first time we deliver to a vessel of E&S Tankers,” it said in a social media post. 

“This operation underscores our dedication to sustainable shipping practices and showcases our commitment to environmentally friendly solutions. We're proud to collaborate with E&S Tankers and look forward to furthering our shared mission.”

Titan completes successful LNG bunkering op of E&S Tankers ship in Antwerp

According to E&S Tankers website, the 7,135 dwt Liselotte Essberger arrived in Hamburg from a shipyard in China on 5 December 2023 and was christened the following day.  

The vessel is first of a total of four newbuildings ordered by the firm that are equipped with LNG dual-fuel engines.

Related: E&S Tankers launches second LNG dual fuel chemical tanker “John T. Essberger”

 

Photo credit: Titan and E&S Tankers
Published: 20 February, 2024

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Shipping Corridor

Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Creating green shipping corridors between South Korea, the United States and Japan’s top two busiest routes can reduce up to 41.3 million tCO2 each year, says Korean NPO Solutions for Our Climate.

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Report: Korea-US-Japan green shipping corridors can lead to significant environmental impact

Korea-based non-profit organisation Solutions for Our Climate (SFOC) on Tuesday (13 February) said creating green shipping corridors between South Korea, the United States and Japan's top two busiest routes – Busan-Tokyo and Yokohama; Busan-Los Angeles and Long Beach– can reduce up to 41.3 million tCO2 each year. 

This is equivalent to annual emissions from over 9 million passenger vehicles in the United States.

“We evaluated the anticipated impact of several proposed KoreaUnited States-Japan green shipping corridors involving ports of Busan (KRPUS), Incheon (KRINC), and Gwangyang (KRKAN) —South Korea’s three major container ports,” SFOC said in the report. 

Each of the three South Korean ports will have the most significant environmental impact if connected to ports of Tokyo (JPTYO)/Yokohama (JPYOK) in Japan and ports of Los Angeles (USLAX)/Long Beach (USLGB) in the United States. 

“If container ships that travel KRPUS – JPTYO/ JPYOK and KRPUS – USLAX/USLGB are converted to zero emission ships, we can expect significant reduction in global carbon dioxide emissions, approximately 20.7 million tCO2 and 20.6 million tCO2, respectively,” it added. 

Accordingly, reducing GHG emissions in the global maritime shipping will require coordinated multilateral commitments and actions.

The green shipping corridor initiative is a global effort to align the shipping industry with the 1.5°C trajectory. It aims to:

  • Create maritime routes in which mainly zero-emission ships travel
  • Run ports with 100 percent renewable energy
  • Enforce mandatory use of on-shore power for docked vessels.

“With increasing global shipping emissions, green corridors are key to decarbonising the sector,” SFOC said. 

“Our latest report on green corridors comes on the heels of South Korea and the United States' announcement to work together to implement cross-country green shipping corridors between several of their key ports.”

 

Photo credit: Solutions for Our Climate
Published: 14 February, 2024

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