The Week in Alternative Fuels
Here are some of the key developments in alternative bunker fuels from the past week.
PHOTO: A100% hydrogen engine launched at the World Hydrogen Summit in Rotterdam this week. Behydro
A consortium including the Maritime and Port Authority of Singapore (MPA) and Japanese shipping company Kawasaki Kisen Kaisha (K Line) has set out to launch ammonia bunkering in Singapore by 2030.
Ahead of next week’s IMO working group meeting, Japan has proposed a feebate mechanism that rewards owners of zero-emission ships and taxes those with vessels running on carbon-emitting fuels.
Clarksons Research estimates that by the start of next year around 5% of the operational global fleet by tonnage will be capable of running on alternative fuels or propulsion.
Belgian Behydro has developed and launched combustion engines that can run on 100% hydrogen.
Norway’s hydrogen bunkering company Hyon has partnered with Japanese trading and investment firm Mitsui & Co to develop hydrogen bunkering infrastructure in Europe, Asia and other locations with potential hydrogen uptake.
The Port of Rotterdam has, together with a big group of exporting countries and companies, set a goal of supplying northwest Europe with 4.6 million mt/year of hydrogen by 2030.
Clean transport NGO Transport & Environment (T&E) thinks a 6% green hydrogen target for the shipping industry by 2030 can create an entire supply chain network and boost demand for zero-emission fuels.
French container shipping firm CMA CGM has joined the French Jupiter 1000 project to support its e-methane ready fleet.
Japanese shipping company Mitsui O.S.K. Lines (MOL) has put in an order for four 7000-unit capacity LNG car carriers and aims to operate 90 LNG fuelled vessels by 2030.
Here are the top five stories in alternative fuels this week:
Consortium sets out to develop ammonia bunkering in Singapore by 2030
The Maritime Port Authority of Singapore (MPA) and Japanese shipping company Kawasaki Kisen Kaisha (K Line) are the latest entrants in a consortium that plans to develop infrastructure and a supply chain to facilitate ammonia bunkering in Singapore.
The consortium also comprises members from the shipping, offshore, trading, classification society and consultant industries.
In March last year, it launched a joint feasibility study to assess how ship-to-ship bunkering of ammonia can be set up in Singapore. They have looked into technical, commercial and regulatory issues to gauge the viability of developing a supply chain network.
The group has identified potential ammonia supply sources, evaluated infrastructure and supply costs for infrastructure, and come up with some initial designs of ammonia storage tanks and bunker vessels.
The design of one of the bunker vessels has been approved by classification society American Bureau of Shipping.
According to the consortium’s initial analysis, there is currently only one ammonia storage tank available on Singapore’s Jurong Island which is used for other various downstream purposes. But it has been in touch with potential terminal operators on Jurong Island to develop ammonia storage tanks for bunkering.
Ammonia can be sourced from large production facilities planned to be built in Australia, it said.
Last year, global commodity trader Trafigura unveiled plans to develop an ammonia and hydrogen plant near Port Pirie in South Australia and aims to start the exporting green ammonia by 2025.
Maersk, a member of the consortium, will advise on ammonia demand assumptions. The MPA will provide views on regulation, standards and guidelines.
The consortium says it seeks partnerships with maritime industry players such as agents, and Singaporean authorities, to develop an ammonia supply chain in Singapore.
Japan pushes for carbon levy at the IMO to reward zero-emission first movers
Ahead of next week’s IMO working group meeting, Japan has proposed a feebate mechanism that rewards owners of zero-emission ships and taxes those with vessels running on carbon-emitting fuels.
The major shipping nation argues that in order to propel demand for carbon-neutral fuels, it is necessary to provide incentives to first movers. This could break down technical and economic barriers to greater adoption, it says.
Demand for zero-emission vessels (ZEV) is expected to surge in the latter half of this decade as supply and vessel technologies mature and as carbon-neutral fuels become more widely available.
To speed up the transition in its initial stage, first movers should be incentivised, Japan says in a proposal to the International Maritime Organisation’s (IMO) Intersessional Working Group on Reduction of GHG Emissions from Ships.
The working group will meet next week to discuss market-based measures and other greenhouse gas (GHG) reduction measures. It will consider a proposal to set up an International Maritime Research Fund (IMRB), which Japan says could be helpful to acquire knowledge on how to manage and oversee funds generated through market-based measures.
To curb carbon emissions from shipping, Japan proposes an incentive scheme based on a feebate mechanism. The scheme taxes those vessels using conventional oil-based fuels, and rewards owners of ZEVs.
A portion of the revenue generated through these taxes could be offered as rebates on carbon-neutral fuels, thus compensating the price gap between conventional and carbon-neutral fuels.
Japan favours a carbon levy system over a cap-and-trade system, while underlining that it thinks both options could kick-start investments in zero-emission vessels.
A major flaw in a cap-and-trade system is its price volatility and lack of predictability, which can complicate investment decisions for shipping firms.
It argues for a feebate system that would be set by the IMO and periodically reviewed and adjusted.
Several Japanese shipping companies have poured investments into zero-emission vessels. Kawasaki Kisen Kaisha (K Line) aims to have zero-emission vessels in operation by the end of the decade. Mitsui O.S.K. Lines (MOL) has made a lofty goal of putting 110 zero-emission vessels on the water by 2035.
Nippon Yusen Kabushiki Kaisha (NYK Line) is working to develop electric offshore vessels for the power industry, and to develop ammonia-ready LNG-powered vessels. Its subsidiary NYK Bulkship has already taken delivery of three dual-fuel chemical tankers that can run on methanol when it becomes more widely available.
All three of these shipping conglomerates have set net-zero emission targets for 2050.
Japan’s government has embraced ammonia as a future fuel. Last year, it announced ambitious plans to increase ammonia demand from shipping and the power sector to 30 million mt/year by 2050, from a current 1 million mt/year.
By including shipping in its net-zero carbon target for 2050, it has put pressure on its major shipping firms, bunker industry and fuel producers to fall in line.
5% of global fleet alternative fuels-ready by next year – Clarksons
Clarksons Research estimates that by the start of next year around 5% of the operational global fleet by tonnage will be capable of running on alternative fuels or propulsion.
The consultancy argues that even though the orderbook of LNG vessels has swelled with already 676 orders placed, more shipowners are switching to vessels with dual-fuel capability, thus adding flexibility to switch to lower-carbon alternatives in the future.
Updake of alternative fuels is gaining pace rapidly. Of the newbuilds ordered last year, 453 ships were alternative-fuel capable, more than double from the preceding year, Clarksons estimates.
Of current newbuilds in the orderbook, LNG-fuelled make up nearly 35% of the total newbuild tonnage. LPG is the second most favoured alternative fuel with 2% of the total, while other alternative fuels like methanol, ethane, biofuels, hydrogen and battery/hydrogen make up a combined 3%.
LNG bunkering will expand with around 94 more bunkering ports planned, from the current 144.
In addition to carbon-cutting fuel alternative fuels, more vessels have adopted, or are looking to adopt, energy-saving technologies such as propeller ducts, wind kites, Flettner rotors and air lubrication systems.
Over 5,000 vessels are equipped with these energy-saving devises now.
Clarksons also says a widening Hi5 price spread through last year and into this year is set to boost HSFO demand with 256 scrubber-fitted vessels ordered. Around 4,500 vessels, or 23% of the global fleet, are fitted now with scrubbers, it said.
Zero-emission hydrogen engines for ships launched
Belgian Behydro has developed and launched combustion engines that can run on 100% hydrogen.
The engines can be installed on ships and other heavy-duty applications like drilling rigs and trains, Behydro says.
The company is a joint venture between Belgian engine maker Anglo Belgian Corporation (ABC) and shipowner Compagnie Maritime Belge (CMB), which owns and operates around 90 dry bulk, container and chemical tanker vessels.
If the engines are powered by green hydrogen produced from renewable sources, carbon dioxide, sulphur oxide and soot particle emissions can be eliminated.
Behydro has also developed dual-fuel engines that can run on 85% hydrogen and 15% conventional fuels, saying these have potential to curb 85% of emissions and add flexibility when hydrogen is not available.
Hydrogen is currently far from widely available as an alternative fuel, but bunkering hubs like the Port of Rotterdam and a wide range of energy and logistics firms have recently announced ambitions to scale hydrogen production capacity and supply infrastructure.
Rotterdam aims to supply 4.6 million mt/year of hydrogen by 2030
The Port of Rotterdam together with exporting countries and around 70 companies have proposed to supply northwest Europe with 4.6 million mt/year of hydrogen by 2030.
The port authority claims that replacing fossil fuels with this volume of hydrogen could curb carbon dioxide emissions by 46 million mt and contribute to mitigate climate change. It can also boost Europe's energy independence.
It projects hydrogen supply will increase through a combination of imports and new local production and has presented this proposal to European Commission vice-president Frans Timmermans.
Imports from Australia, Latin America and other places with great access to renewable energy for hydrogen production could reach 4 million mt by 2030.
Local production capacity is estimated to be ramped up to around 600,000 mt. Many companies have embarked on projects to produce green hydrogen in northwest Europe. More sunshine, wind and space is required to scale these, the port authority says.
It also plans to build a pipeline to supply hydrogen from Rotterdam to industrial clusters and filling stations, to fuel barges and trucks.
As preconditions for the project to be sustainable, it says the imported hydrogen must be produced from renewable energy sources, and that the price gap between this green hydrogen and other carbon emitting alternatives has to narrow to make it financially viable.
