The Week in Alternative Fuels
Here are some of the key developments in alternative bunker fuels from the past week.
PHOTO: Aerial view of OCI's ammonia import terminal in Rotterdam. OCI
After last week’s high drama at the European Parliament wherein the majority MEPs surprisingly rejected a reform to the EU Emission Trading System (EU ETS) that included shipping, this week kickstarted with closed door negotiations between political parties that later announced a consensus has been achieved. The resulting proposal will be tabled for a second vote next week.
Europe and other regions are looking to develop green shipping corridors to boost uptake of low- and zero-carbon fuels. This week, the Port of Long Beach announced it will join the Shanghai-Los Angeles shipping corridor with an aim to cut shipping emissions on this trans-pacific route towards 2030.
A study by DNV has found that hydrogen should make up 15% of the global energy mix to meet the Paris Agreement target of keeping global warming within 1.5°C above pre-industrial levels. But as things stand now, DNV estimates that hydrogen is only projected to make up 0.50% of the energy mix by 2030, and 5% by 2050. The study highlighted hydrogen derivates such as ammonia and methanol, saying they will play a major role in decarbonising shipping.
Despite hydrogen beingconsidered vital for nations to meet their emission targets, its future availability remains questionable. This week, Adani and TotalEnergies revealed plans to invest $50 billion in developing a green hydrogen production hub and “ecosystem” in India, an a boost to green hydrogen availability prospects. The duo aims to produce 1 million mt/year of green hydrogen at a reasonable cost by 2030.
As more ammonia-powered vessels are set to join the global shipping fleet by 2025, demand for ammonia bunkering is expected to increase this decade. Dutch fertiliser firm OCI said it plans to triple its ammonia terminal import capacity at its Rotterdam terminal, to 1.2 million mt/year by next year, in a move to cater rising bunker demand.
Norwegian engineering firm TECO2030 has launched a hydrogen fuel call tanker concept wherein the tanker will use hydrogen fuel cells to eliminate greenhouse gas emissions on voyages and in port.
London-based Avenir Marine supplied its first bioLNG stem to TT-Line’s RoPax ferry Nils Holgersson in Germany’s Port of Lübeck.
Mediterranean Shipping Company (MSC) argues biofuel is the only low carbon fuel that is currently readily available and can be widely used as a transitional fuel across its fleet without any engine modifications.
Dutch LNG bunker supplier Titan LNG has rebranded itself as “Titan” and intends to offer carbon neutral fuels such as e-methane, methanol and green hydrogen at an unspecified future date.
Norwegian shipowner Ocean Yield has put in an order for a 5,500 TEU dual-fuel container ship that can be converted to run on methanol.
An assessment by Shipping classification society-Lloyd’s Register found that bulk carriers can improve their energy efficiency by up to 29% through installing six 5x30-metre rotor sails.
Italian technology firm Ecospray has launched three carbon capturing systems for vessels and plans to conduct the first onboard trials by the end of this year.
Here are the top five stories in alternative fuels this week:
EU ETS to be tabled for second vote as political parties reach consensus
The major European Parliament parties European People’s Party (EPP), Socialist & Democrats (S&D) and Renew Europe (RE) announced that they have reached an agreement on the EU Emissions Trading System (EU ETS) reform that includes an extension of the ETS to cover shipping.
The ETS breakthrough came a week after the reform was surprisingly rejected by the majority of European Parliament members.
“Last night, Christian Democrats, Social Democrats and Liberals agreed on a new compromise on emissions trading,” said EPP lawmaker Pieter Liese, who was the rapporteur of the ETS proposal.
He reckons that an ETS reform will be supported by a large majority in the Parliament when it will be tabled for a second vote on 22 June.
Last week, the ETS proposal was dramatically rejected with 340 MEPs votes against, and 265 votes in favour, as well as 34 abstentions. Liese found the European Green Party and S&D responsible for the rejection of the Environmental Committee’s proposal on ETS.
The political parties are now backing the proposal, he said.
“We have managed to find a solution in less than a week’s time,” said the committee's president Pascal Canfin.
Last month, the committee voted in favour of an extensive emissions regulations agenda that would include shipping emissions in the EU ETS.
The proposal approved by the committee would extend to cover ETS on all ship emissions from intra-European voyages by 2024. Half of the emissions from voyages to and from EU countries would be included between 2024-2026, before being expanded to 100% from 2027
Following an approval from the committee, the proposal needs a green light from European Parliament members at the upcoming parliamentary session on 22-23 June, and then to be negotiated by EU member states.
Port of Long Beach joins Shanghai-Los Angeles Green Shipping Corridor
The Port of Long Beach has joined the Shanghai-Los Angeles Green Shipping Corridor, aiming to decarbonise shipping on the trans-Pacific trade route by 2030.
The plan was first announced in January through a collaboration between Shanghai, Los Angeles and the C40 Cities Climate Leadership Group.
C40 Cities is a network of major cities across the world that are working to mitigate the climate crisis.
They intend to build a “Green Shipping Corridor Implementation Plan” by the end of 2022, covering goals, interim milestones and roles for participants.
The partners seek to boost uptake of low, ultra-low, and zero-carbon fuelled ships this decade, as well as to improving the efficiency of ships sailing through this corridor and reduce emissions from port operations.
The Port of Long Beach also supports other environmental initiatives under its Green Port Policy and aims to achieve zero-emission terminal operations by 2030.
Long Beach harbor commission president Steven Neal thinks entering this alliance will widen the port’s influence and support its efforts to decarbonise shipping operations.
Hydrogen should make up 15% of energy mix to meet Paris Agreement – DNV
Hydrogen uptake needs to triple to 15% of global energy demand by mid-century to reach the Paris Agreement target of keeping global warming within 1.5°C above pre-industrial levels, says DNV.
But as things stand now, hydrogen is only forecast to make up 0.50% of the energy mix by 2030, and 5% by 2050, shipping classification society DNV forecasts.
“Hydrogen is essential to decarbonize sectors that cannot be electrified, like aviation, maritime, and high-heat manufacturing and should therefore be prioritized for these sectors,” DNV’s group president and chief Remi Eriksen said today at DNV’s Hydrogen Future conference.
Carbon capturing and storage are critical elements in producing low-carbon hydrogen, he added.
The classification society claims that blue hydrogen produced from natural gas with emissions captured will play a major short-term role, especially in Europe where it predicts hydrogen will make up an above-average 11% of the energy mix by 2050.
Blue hydrogen is needed to scale hydrogen infrastructure and can complement green hydrogen in the future, said Equinor Low Carbon Solutions’ project manager Ulrik Olbjørn. German authorities have found both blue and green hydrogen necessary in short term, he added.
Olbjørn argues that a major concern for hydrogen investment is lack of demand, so off-takers need to commit to contracts running for at least 10-15 years to make investments in hydrogen lucrative.
To save costs, existing infrastructure can be used for hydrogen, suggested Uniper Market Analytics’ executive vice president Gregor Pett. Uniper is planning to use decommissioned gas storage sites in Germany for storing hydrogen, he added.
Both Olbjørn and Pett think hydrogen will largely be moved between countries through pipelines as shipping it by sea is prohibitively expensive.
A DNV study has similarly found hydrogen transport through pipelines to be an inexpensive and robust method for distances up to 2,000 km. Transporting hydrogen on vessels, however, is expensive and complicated partly because it needs to be regasified from its cryogenic liquid form at the receiving destination.
It goes on to highlight ammonia as a convenient hydrogen carrier that is easier and more cost-effective to ship. Hydrogen derivatives such as ammonia and methanol will play key roles in decarbonising the shipping sector, said DNV.
“We expect our first ammonia-powered engine to roll out by 2024,” said MAN Energy Solutions Two Stroke Business head Bjarne Foldager.
Adani New Industries Ltd (ANIL) aims to produce 1 million mt/year of green hydrogen by 2030
French oil and gas supermajor TotalEnergies has acquired a 25% stake in ANIL, which plans to invest $50 billion in developing a green hydrogen production and "ecosystem" in India.
“In our journey to become the largest green hydrogen player in the world, the partnership with TotalEnergies adds several dimensions that include R&D, market reach and an understanding of the end consumer,” Adani Group’s chairman Gautam Adani said.
Green hydrogen will be produced using renewable energy sources such as solar and wind at low cost, Adani says.
“This future production capacity of 1 million ton per annum of green hydrogen will be a major step in increasing TotalEnergies’ share of new decarbonized molecules including biofuels, biogas, hydrogen, and e-fuels to 25% of its energy production and sales by 2050,” TotalEnergies chairman and chief Patrick Pouyanné said.
OCI to triple ammonia terminal capacity in Rotterdam to meet rising bunker demand
Dutch fertiliser firm OCI plans to triple ammonia import capacity to 1.2 million mt/year at its terminal in the Port of Rotterdam by next year.
Through this expansion, OCI aims to cater to surging demand from ammonia-powered vessels that are set to join the global shipping fleet by the middle of this decade.
OCI says the terminal's location in Rotterdam makes it well placed as an import hub for ammonia produced at its plants in the Middle East, North Africa and US, and as a bunker facility for ships.
In the first phase of expansion, OCI plans to upgrade existing infrastructure in the terminal. More ammonia storage tanks jetty infrastructure will follow in the later stages.
“We are pleased to announce this milestone, enhancing a key ammonia import and future bunkering hub and aggregation point for low-carbon ammonia at a world-scale port,” OCI’s chief Ahmed El-Hoshy said.
The terminal can be further expanded to import 3 million mt/year of ammonia, claims OCI.
“Ammonia is not only a hydrogen carrier and a feedstock for the chemical industry, its also an important renewable fuel for the shipping sector,” Port of Rotterdam’s chief executive Allard Castelein said.
