The global bunker industry’s smooth transition into the low-sulfur era mandated by the International Maritime Organization has sent a strong signal to the sector that it can achieve its next goal of decarbonization equally free of hurdles, industry sources said.

“The IMO deserves credit as it was a [role] model to implement the regulation on an international basis,” Mitsuyasu Kawaguchi, general manager of crude oil and tanker department at Japanese refiner Cosmo Oil said at the 36th Annual Asia Pacific Petroleum Virtual Conference, or APPEC 2020.

In 2019, there were numerous discussions in the marine industry over how the transition to 0.5% fuels would pan out, with a lot of skepticism around VLSFO availability and VLSFO blends as it was expected they would increase operational problems and quality claims.

“What we’ve heard is that they [VLSFOs] burn better, they are cleaner and overall as long as you don’t have compatibility issues on your ship and are not unfortunate enough to get one of the fuels with sediments or unstable trends, they have been very good fuels,” Unni Einemo, director at International Bunker Industry Association, said at the same event.

Meanwhile, Gard, member of the international group of protection and indemnity clubs, said in a statement on Sept. 10 that the most commonly experienced problems with fuel reported to it were high total sediment potential and marginal exceeding of sulfur while the most common operational problems faced onboard was an increase in sludge formation in purifiers and filters.

However the operational problems have not led to a high frequency of major breakdowns or engine damage cases, it said. “Our data for fuel related machinery damage claims shows that the first six months of 2020 saw fewer claims than the same period in 2018 and 2019.”

“On the defence side, the number of case files opened this year on contractual bunker disputes is similar to previous years. So, from Gard’s perspective, the more dire predictions regarding potential engine damage, and a deluge of litigation between owners and charterers have not materialized, at least in this first six-month period,” it added.

So far this year, among all the samples tested by Lloyd’s Register, only 4% of VLSFO and 1.7% of MGO’s has been off-spec, Douglas Raitt, regional advisory services manager Asia at marine classification society Lloyd’s Register, told Platts earlier in September.

This is lower compared to the same period in the preceding year, Raitt added then.

Another aspect was the timely preparation.

“One of the key challenges was actually the maritime industry accepting that the IMO 2020 is here and rather than giving excuses, [one needs to] start early because it is the right thing to do,” Rajalingam Subramaniam, AET’s President & CEO said at APPEC 2020.

“We started using the LSMGO much earlier than the regulatory day,” he added.
Compliance to IMO 2020

Compliance to the rule has also been fairly good despite the challenges posed by coronavirus, or COVID-19, pandemic, industry sources said.

In the first six months of 2020, the number of port state control, or PSC, inspections dropped by nearly 40% due to the COVID-19 outbreak, Gard said.

“Despite that, detentions relating to SOx [sulfur oxides] regulations of MARPOL Annex VI were in double digits in the Tokyo MoU region, with the majority of those being for high sulfur content in the fuel,” it said.

PSC officers are generally aware of and following the IMO guidelines, Gard added, citing its involvement in some of those cases.

The narrowing HSFO-VLSFO price spread brought about by COVID-19, has also prompted shipowners to use more LSFOs, aiding compliance, some industry sources said.

The huge amount of gasoline demand destruction brought large amounts of vacuum gasoil to the middle distillates pool, easing VLSFO prices, Kawaguchi said.

However, Kawaguchi noted that the spread had likely bottomed out. Some sources also resonated this sentiment as, with the easing of lockdown restrictions in many countries, a recovery was underway.

Decarbonization

Meanwhile, with the IMO greenhouse gases emission cut targets looming, decarbonization has become a focal point for the industry, some sources said.

The IMO, in April 2018, laid out its strategy, aiming to reduce the shipping industry’s total GHG emissions by at least 50% from 2008 levels, by 2050, and to reduce CO2 emissions per transport work by at least 40% by 2030.

Ammonia, hydrogen, LNG were among the various alternatives being discussed by several sources at APPEC 2020 to tide over this regulatory challenge.

AET Tankers, for its part, has already invested in dual-fueled LNG technology although LNG was still a transition fuel, Subramaniam said.

The parent company of AET Tankers — the MISC Group — is also part of a joint development project, or JDP, for an ammonia-fueled tanker to advance shipping’s drive towards decarbonization, he said.

“COVID-19 is a massive reset in the industry, It is like a safety car coming in the F1 [Formula 1] race,” Subramaniam said.

Moving forward, the industry will have to adopt a more collaborative approach to stay relevant, he added.
Source: Platts


At the “Future of Shipping: Decarbonisation” webinar jointly organised by the International Maritime Organization (IMO) and Singapore today, leaders from maritime administrations and industry came together to share insights on decarbonisation for shipping in the new normal post-COVID-19. Over 500 participants from 63 countries tuned in to the webinar.

Speaking at the opening of the webinar, Singapore Minister for Transport, Mr Ong Ye Kung, said, “While the world deals with the COVID-19 crisis, it must keep up with the fight against climate change. No one can do this alone. It is a global ambition, to be accomplished by the international maritime community. But we all have capabilities, expertise, and resources to contribute to this endeavour. Singapore will do our part, and we look forward to the maritime community coming together, under the leadership of the IMO, to redouble our efforts and build a better, greener world.” Please refer to the Annex for his full speech.

IMO Secretary-General Mr Kitack Lim called for more action to speed up research into zero carbon marine fuels. The Secretary-General said, “To achieve this, IMO is stepping up its efforts to act as a global forum and promoter in R&D in zero carbon marine fuels, bringing together interested stakeholders from public and private sectors, and also private and development banks and other potential donors around the world.”

The strong turnout at the webinar demonstrated that decarbonisation remains a key priority for the international shipping community despite the COVID-19 pandemic. An important underlying theme in the webinar was the importance of collaboration and coordination amongst all stakeholders across the energy and maritime transport value chains, to achieve IMO’s ambition of reducing total annual Greenhouse Gas emissions by at least 50% by 2050 compared to 2008.

To co-ordinate and spur global efforts, the IMO and Singapore introduced “NextGEN”, a concept for a collaborative global ecosystem of maritime decarbonisation initiatives. “NextGEN” will facilitate information sharing on decarbonisation initiatives across stakeholders such as IMO Member States, industry and academia, identify opportunities and gaps for decarbonisation in the global shipping ecosystem, and create important networks and platforms for collaboration.

Mr Andreas Sohmen-Pao, Chairman, BW Group and Co-Chair of Singapore’s International Advisory Panel on Maritime Decarbonisation (IAP), Mr Wong Weng Sun, President and CEO of Sembcorp Marine Ltd and Co-Chair of the IAP, and Ms Quah Ley Hoon, Chief Executive of the Maritime and Port Authority of Singapore (MPA) spoke on the approach needed to successfully transition global shipping to future green energy sources and meet IMO’s 2050 target.

The “Future of Shipping: Decarbonisation” webinar is the third webinar under the Maritime Perspectives series organised by MPA. IMO and Singapore will co-organise another webinar – “Future of Shipping: Digitalisation”, on 8 October 2020, where experts will discuss the potential that digitalisation has for shipping. Both webinars lead up to the main IMO-Singapore Future of Shipping conference to be held during Singapore Maritime Week 2021.
Source: Maritime and Port Authority of Singapore


Hyundai Samho Heavy Industries has delivered the world’s first very large containership powered by liquefied natural gas (LNG) to Singapore’s Eastern Pacific Shipping (EPS), the South Korean shipbuilder announced Wednesday.

The LNG-powered, 14,800 twenty-foot equivalent unit (TEU) capacity CMA CGM Tenere is one of six containerships in a series being built for EPS by Hyundai Samho, a unit of shipbuilding giant Korea Shipbuilding & Offshore Engineering Co.

The six neo-Panamax box ships are each powered by dual-fuel MAN B&W 11G90ME-GI main engines capable of running on LNG or traditional diesel bunker fuel.

The 366-meter-long vessels were ordered by EPS in April 2018 and will be delivered by the third quarter of 2022. They will be chartered by French container shipping company CMA CGM.

CMA CGM will soon take delivery of even larger LNG-powered containerships, stating with the 400-meter-long, 23,000-TEU capacity CMA CGM Jacques Saadé from Shanghai Jiangnan-Changxing Shipyard. The Chinese shipyard is building nine vessels in the series for CMA CGM, who aims to operate at least 20 LNG-fueled containerships by 2022.

Increasingly, shipowners in various segments—from bulk carriers to cruise ships—are looking to LNG-powered vessels to meet the International Maritime Organization’s (IMO) environmental regulations that call for ship emissions to be reduced by more than 30% by 2025 from 2008 levels. The IMO rules also target 40% emissions reductions by 2030 and by 70% reductions by 2050.

In addition, the IMO regulations that took effect at the start of this year lowered the sulfur cap on bunker fuel content from 3.5% to 0.5%.

The number of LNG-fueled ships is expected to more than double from less than 400 currently to more than 1,000 by 2030, a senior executive at Malaysia’s Petronas said on Wednesday.

Source: maritimeprofessional


Jabatan Laut Malaysia, known as Marine Department Malaysia, on Monday (11 November) released a shipping notice regarding the implementation of IMO 2020 sulphur regulations for the country.

Manifold Times has obtained a copy of the notice Implementation of Sulfur Limits Under Rule 14.1 Appendix IV, MARPOL 73/78; its contents are as follows:

Purpose

  1. This Notice is to inform the shipping community about the requirement of 0.50% m/m Sulphur Content limit on Regulation 14.1, Annex VI of MARPOL 73/78.
  2. The sulphur content of any fuel oil used on board ships shall not exceed 0.50% m/m on and after 1 January 2020 (for ships operating outside an emission control area).
  3. Furthermore, the shipping community are advise to comply to related IMO amendments and guidelines as in Appendix 1
  4. From 1 January 2020, a Malaysia ship which has to procure non-compliant fuel oil due to the unavailability of compliant fuel would need to complete and submit a Fuel Oil Non-Availability Report form (FONAR) to the Malaysia Marine Department, the Port Authorities where the non-compliant fuel was purchased and the destination Port Authorities. Detail information as in Appendix 2.
  5. All Malaysia Ship using new type of 0.5% m/m sulphur compliance fuel oil and plying International Voyages is encourage to submit the Ship Implementation Plan (SIP) for Achieving Compliance with The 0.50% Sulphur Limit as per Appendix 1 in MEPC.1/Circ.878 to Recognised Organisations for verification before 01 January 2020.
  6. Malaysia will enforce the MARPOL Annex VI, Regulation 14.1 on 1 January 2020. All Malaysian ships and Foreign ships plying in Malaysian Waters are required to comply with the regulation.

Inquiries concerning the subject of this Notice should be directed to:

bksas@marine.gov.my ,or

Director
Maritime Safety, Security and Marine Environment Division,
Marine Department Of Malaysia, HQ
P.O. Box 12, Jalan Limbungan
42007 Port Klang, Selangor, Malaysia

Source: manifoldtimes


InterManager – the international trade association for ship and crew managers – has today published an open letter addressed to Mr Kitack Lim, the Secretary-General of the International Maritime Organization, on behalf of its members and associates.

 

The letter urges Mr Lim to offer more support to the global maritime industry with regards to the Singaporean repatriation issue.

 

Several major seaports throughout Asia have tightened crew change restrictions and stepped up screening of seafarers in recent weeks as the coronavirus stages a global resurgence.

 

The Maritime and Port Authority of Singapore recently issued correspondence stating that “the MPA will be giving priority to crew change applications from Singapore-registered ships and applications for sign-off crew only, without signing-on new crew,” a release which has prompted InterManager to issue an open plea to the IMO’s Secretary-General.

 

Speaking of the situation, InterManager’s Secretary-General Capt. Kuba Szymanski said: “If the same rules issued by the MPA of Singapore were applied to all Flag States, it would pose a very dangerous narrative, as ships of other Flag States would not be allowed to perform crew changes anywhere in the world.

 

“We – ship managers – would be unable to change off-signing crew because they would immediately be in breach of safe manning regulations.

 

“We completely understand the concerns that Singapore has, and we support their efforts to look after their citizens. However, no ships means no supplies, so a collaboration between the shipping sector and local administration is of paramount importance, and needs to be a two-way street.”

 

The measures implemented by the MPA of Singapore follows a set of best practices issued on 24th July in light of a resurgence of coronavirus cases, which included isolation periods for on-boarding and off-boarding crews, as well as virus testing.

 

InterManager believes that the restrictions imposed on non-Singapore-registered vessels creates a myriad of issues to the safety of seafarers, and presents a significant breach of seafarers’ humanitarian rights.

 

“Their approach is everything but human-centric,” said Capt. Szymanski.

 

Capt. Szymanski said that officials in Singapore have less than concrete action to help crew repatriation in these troubling times. Recommendations suggested by the MPA are not practical, and InterManager is encouraging anyone who did manage to carry out crew changes in Singapore to get in touch in order to keep a good record of the scale of the problem.

 

“Presently, our records show zero crew changes for non-Singapore ships, for both on and off-signing crew changes,” said Capt. Szymanski.

Source: intermanager


There’s hardly anyone buying new ships, with orders plunging to a 20-year low due to a potent combination of uncertainty over environmental regulations, the economic fallout from the coronavirus pandemic and a lack of financing.

“The IMO has brought in significant, ambitious and important targets around emissions,” said Clarksons Research’s managing director Stephen Gordon. It remains unclear the exact policies and regulations that might be introduced and what technology will be adopted, he said. Ships are long-term investments, and buyers run the risk that their vessels will become obsolete.

Read more on the green fuel future of shipping

The global shipping industry is in the midst of one of its biggest changes in a generation after stricter environmental rules kicked in at the start of the year. Ship owners face paying more for cleaner fuel, retrofitting ships with pollution-reducing scrubbers or even ordering new vessels. Compounding the uncertainty has been Covid-19, which has upended supply chains and stalled trade flows.

“Covid-19 has become the most immediate issue,” Gordon said. While challenges due to lockdown measures are easing, “the economic uncertainty, disruption to trade, and volatility in freight rates” caused by the virus are driving orders lower.

Demand growth for containers is expected fall this year due to Covid-19, according to A.P. Moller-Maersk A/S, which predicts a return to 2019 volumes in the early part of 2021. The world’s largest container line ordered only eight vessels in the second quarter, putting its orderbook-to-fleet ratio at 9.4%. Globally, the rate is about 8%, meaning orders for new ships are at a two-decade low, according to Clarksons’ Gordon.

“The virus is a further hit to demand that’s already barely even there,” said Rahul Kapoor, head of commodity analytics & research, maritime & trade at IHS Markit. “With the pandemic’s hit to economic activity and supply chains, ordering new ships is now the lowest priority for companies. They’re concentrating on just trying to maintain profit margins.” The virus has also delayed the completion of shipbuilding projects, he said.

Finance Crunch

Shipowners are also lacking the finances to make purchases, according to Ralph Leszczynski, head of research at shipbroker Banchero Costa & Co.

“Most shipping markets are coming from a relatively poor decade, 2009 to 2019, in terms of earnings so most shipowners do not have that much cash in their pockets,” he said. “External finance is also in short supply as banks are now largely steering clear off shipping after the defaults they suffered after 2008.”

Still, fewer orders and slower fleet growth will likely bolster shipping rates. Lines are likely to continue to keep capacity in check into 2021 to minimize the impact from slowing global trade, said IHS Markit’s Kapoor.

The cost of moving goods by ship from Hong Kong to Los Angeles surged

That’s already translating to increasing costs for transporting goods by ocean liner, with one benchmark of trans-Pacific container rates more than doubling since late-May to a record. Bulk-carrier costs have also rebounded from a four-year low. Maersk, which idled about 20% of its capacity in April before gradually reinstating it in subsequent months, saw earnings beat estimates in part due to improved freight rates.

Big Ships, Small Ships

The offshore sector has seen demand for oil rigs and supply vessels hammered as energy prices remain low and there’s little interest in new exploration investments, said Leszczynski. It’s a “gamble” to purchase an oil tanker amid uncertainty over demand, he said. While oil consumption has grown in the past two decades, climate change mitigation efforts are spurring market expectations that appetite will decline.

While the coronavirus adds to short-term uncertainty, there’s a better medium-to-long term outlook. Qatar signed a deal in June worth around $19 billion with South Korean shipbuilders for more than 100 liquefied natural gas vessels, Maersk expects a progressive recovery in volumes and port operator DP World said it’s positive on fundamentals.

The shipbuilding sector is set to remain subdued for the next few years, with a revival possible eight to 10 years from now, said Leszczynski. Vessels built during the boom years of between 2007 and 2010 will require replacement, as most have a lifespan of about 20 to 25 years, he said.

— With assistance by Kyunghee Park
Source: bloomberg


To allow for the “speedy and safe travels” of seafarers during the coronavirus disease (Covid-19) pandemic, the Maritime Industry Authority (MARINA) said it has communicated the country’s guidelines for the establishment of a “green lane” for seafarers to the International Maritime Organization (IMO).

In a statement on Tuesday, the MARINA said the guidelines, made in response to the IMO’s recommendations for safe ship crew changes during the pandemic, would allow for the safe and swift disembarkation and crew change of seafarers in the country.

“These guidelines were formulated through an inter-agency effort in order to expedite the travels of seafarers involved in deployment, disembarkation, and crew changes by establishing a Philippines Green Lane,” the MARINA said.

The Department of Foreign Affairs and other government agencies in July signed the Philippine Green Lane Joint Circular that would facilitate the creation of controlled travel lanes to stimulate the country’s economy through the safe and efficient movement of seafarers.

In a message, Luisito “Lui” delos Santos, officer-in-charge at MARINA’s Management Information Systems Service, said the IMO will issue a circular to its member states in response to the Philippines’ new policy on the travels of seafarers and crew change.

“This will serve as guidance for seafarer-foreigners joining their ships docked in the Philippines, disembarking from a foreign ship docked in the Philippines to an international gateway for purposes of repatriation, and foreigners transiting in a Philippine international gateway,” delos Santos said.

He added that other member states of the IMO are also encouraged to communicate to the IMO their policies and practices relating to crew change and the movement of seafarers.

MARINA said it has issued Advisory 2020-60 and 2020-61 that both highlight various crew change protocols from other IMO member states for the use of licensed manning agencies, ship owners, ship operators, and other concerned entities in the Philippines’ maritime sector.

On August 22, MARINA launched the country’s third crew change hub at the Subic Bay Freeport Zone—after the Port of Manila and Port Capinpin in Orion, Bataan.

Late in July, MARINA released new protocols that limit crew change activities to crew change hubs or ports that have been adapted for health and safety procedures such as testing for Covid-19 upon disembarkation of seafarers and crew changes, among others.
Source: PNA


The move by the International Maritime Organization (IMO) to introduce a 0.5 per cent sulfur limit on fuel oil from January 2020 poses the largest and most disruptive change that the shipping and oil refining industry have had to face. Despite these global challenges, India’s modern oil refiners have undertaken long-term investment in coking capacity leaving the sector well positioned to thrive by producing more valuable clean products over less attractive high sulfur fuel oil.

In less than 10 months, we forecast an immediate drop of more than two million barrels per day (b/d) of high sulphur fuel oil (HSFO) demand as shippers switch to low sulfur fuel oil or Marine Gasoil increasing the demand for diesel/gasoil by over two million b/d. In the short term, we estimate the cost of compliance for shipping to be $60 billion.

At face value, the direct impact of higher shipping costs on consumers should be limited. A large container fleet ship transporting trainers from East to West, the consumer is looking at a price rise of less than four cents.

But, what will hit the consumer is an estimated increase of $5 per barrel to $7 per barrel in the price of Brent crude driven by increased refinery runs in 2020. This will most likely impact consumers at the pump as they refuel their cars, leaving them with less money in their pockets at the end of each month to spend on discretionary items such as trainers, going out for a meal, or taking a holiday (especially as higher jet fuel prices will make flying more expensive). Increased crude prices will also hit industry, meaning the impact will be felt across the whole economy. Global trade will slow down, which will affect container ship profits as utilisation falls.

However, the question remains what will happen to high sulfur fuel oil, an inevitable byproduct of the refining of crude oil?

Many have accused both the shipping and refining industries of having their heads in the sand about the unwanted quantities of HSFO. One avenue for the surplus HSFO is power generation in parts of the world with less stringent sulfur restrictions and more innovation in wider industrial uses of fuel oil, for example, desalination plants in the Middle East are already establishing a bulwark for this market. However, the shift to power generation will not account for all of the HSFO surplus and refineries will only change their configurations with the right economic incentives.

Of course, the irony of all this is that legislation intended to reduce sulfur dioxide emissions, especially where it has a health impact (close to coastlines), has simply pushed some of it into static sources such as power plants, which tend to be closer to populations.

As for shippers, installing scrubbers to remove the sulphur dioxide and dirtier particulates will also allow for continued demand for HSFO. We believe the market will not need much more than 6,000 ships to be fitted. At this level, the amount of demand for HSFO would increase to above 1.5 million b/d, which in itself would tighten the HSFO market, pulling supply back out of power plants and back into marine fuel oil. At this point, fuel oil would price back up to the breakeven point for ships with scrubbers to burn fuel oil over gasoil. In other words, the disruption and price volatility should be temporary.

The main problem the shipping industry has to address is how it will cope with an unfamiliar set of new fuels in 2020. There is some uncertainty about the new 0.5 per cent sulfur blends the refining industry is developing, with wide range of products expected to be on offer.

Fuel oil suppliers will need to supply a range of fuels from HSFO, marine gasoil and a range of 0.5 per cent sulfur blends, creating even more complexity to fuel management and supply chains, especially on bunker barges.

So who stands to benefit from IMO 2020?

Indian refineries are relatively well positioned to deal with challenges associated to changes in IMO specifications owing to their modern configurations, which will enable them to produce more clean oil products like gasoil/diesel than dirty products such as fuel oil.

State-owned Indian Oil Corporation, for instance, has already carried out detailed tests to advance the production of low sulfur fuel oil compliant with IMO’s 2020 rule and aims to start supplying cargoes commercially from September 2019. However, the dual impact of India’s on-road diesel and gasoline tightening to 10 parts per million sulfur nationwide in April 2020 will require more refinery upgrading.

The duel challenge of on-road lower sulphur and the change to marine fuels will all result in higher gasoil prices but will be a double hit for Indian consumers not only feeling the impact of higher gasoil and gasoline prices from IMO but also from the tighter product quality specification.

Previously, Indian refiners were able to take advantage of the quality arbitrage. Outside of India’s domestic market, less availability of ultra-low sulfur diesel from India for exports in 2020 and onward might tighten the supply to the European Union, adding to the sulfur needed to be handled. Another consequence of desulphurisation stemming from IMO rules will the creation of sulphur creating opportunities for other industries such as fertilisers.

Source: economictimes


More points to ammonia as a promising zero-emission fuel. When based on wind or solar energy, it is a carbon-neutral option, with the infrastructure already in place, and ready to be mass-produced. After overcoming the challenges such us higher costs and the development of a new engine technology, it may become a part of the future fuel mix.

September 08 2020

In connection with the UN Climate Action Summit, MAN Energy Solutions joined the Getting to Zero Coalition in September 2019 to help develop zero-emission vessels by 2030 with its industry partners.

We view the Getting to Zero Coalition’s aims as closely aligned with our own strategy of cooperating with external partners to expand our business with sustainable technologies and solutions, such that they become our main source of revenue by 2030.

As I said, at the time of our joining the coalition, we understand the need to work with a wide group of industry partners to achieve this strategy and the Getting to Zero Coalition is therefore a perfect match. In shipping, MAN Energy Solutions has publicly spoken out in favour of a ‘maritime energy transition’ for some time now, which draws on the increased use of low-emission fuels. For us, the path to decarbonising the maritime economy starts with fuel decarbonisation, which will be a natural step towards the development of zero emission vessels.

But what fuel?

January 1, 2020, marked a milestone for the maritime shipping industry. From that date, all vessels became bound by new IMO rules restricting the use of high-sulphur fuels. While compliance with this was relatively straightforward for shipowners, decarbonisation will prove a tougher nut to crack and requires swift action.

As such, ships launched in 2030 will still be at sea in 2050 when – according to an IMO strategy adopted in April 2018 – the sector must reduce its total annual greenhouse gas emissions by at least 50%.

Potential zero-carbon fuels include alternative fuels like synthetic methane, alcohol, green hydrogen, and ammonia. In this respect, there’s naturally a bit of uncertainty because everybody realises the need for change. But it is also clear that you do not have just one solution.

Ammonia is a promising candidate

As a potential zero-carbon fuel, ammonia is an interesting candidate. Indeed, the DNV-GL declared in 2019: “Ammonia is the most promising, carbon-neutral fuel option for newbuildings.”

Since large quantities of ammonia are already transported around the world, it is a well-established commodity with some 120 ports globally currently importing/exporting it, and some with storage facilities. Thus, using ammonia to power ships would be a natural step with infrastructure already in place.

The companies already producing and distributing ammonia around the world know ammonia technology and have an incentive to showcase it as it is a sustainable technology that could provide new business opportunities.

Sustainable production and competitivity

When discussing future fuels, one thing is clean sulphur-free fuels but the CO2 footprint of such fuels also needs to be looked at. In this context, so-called power-to-X solutions where fuels are produced from sustainable energy sources are worth investigating.

The ammonia you have in the market today is CO2-free but based more on fossil fuel. Manufacturing green ammonia implies that you take electricity created by windmills and react hydrogen with nitrogen to produce ammonia. What is interesting about this is that there is no carbon involved in the process, making it a completely carbon-free fuel.

There are certain barriers, however, for ammonia and green ammonia – as there are with green or synthetic methane. It is relatively expensive, compared to fossil-based fuels. When talking about merchant shipping and the two-stroke business, solutions need to be business-viable.

Even if the cost of moving goods by sea increases in the future due to the introduction of zero-carbon fuels, it will still be the most efficient method as nothing can compete with shipping in terms of transporting goods. What we need to do is to create global coalitions and get the IMO to support a CO2 tax, and then funnel the money into R&D development and into developing solutions for the supply chain and large-scale production of these fuel types.

Ultimately, you need to build a scalable production of ammonia, utilising offshore windmill-fields or solar-power plants to provide the clean electricity required. Hand in hand with this, the ammonia supply-chain will have to be scaled up so that sufficient bunkering capacity is in place to supply vessels. Another requirement is, of course, a suitable engine technology.

First ammonia engine by 2024

MAN Energy Solutions has a convincing track record in developing engines running on alternative fuels, having developed the world’s first oceangoing ships driven respectively by LNG, methanol, ethane, and LPG.

In a technical paper released in late 2019, we noted that the two-stroke ammonia concept is an add-on to our electronic ME-engine and similar to the previous engine concepts for liquid gas injection propane (ME-LGIP) and liquid gas injection methanol (ME-LGIM).

The development of the LGI engine has already addressed challenges similar to those posed by ammonia – namely corrosion, toxicity and low flammability – and there would be little difference between an ammonia engine and the ME-LGIP/LGIM engines. In light of this, we aim to deliver the first ammonia-fuelled, two-stroke engine in 2024.

Ammonia-engine development will take place at our Research Centre Copenhagen (RCC) facility. We already kickstarted the project in early 2020 with a HAZID (hazard identification) workshop. Subsequently, the first engine tests are scheduled to begin in 2021 where the ammonia supply and auxiliary systems will be specified, with an after-treatment (emissions) solution specified by 2022. NOx emissions reductions are expected to be achieved via a Selective Catalytic Reaction (SCR) system, which has already proven itself in the industry.

A full-scale engine test is scheduled for 2023, the success of which will enable the first delivery of an ammonia-fuelled engine to the market in 2024. We are also working diligently towards a dual-fuel, ammonia-retrofit solution for existing engines, which will be available from Q1 2025.

Source: globalmaritimeforum


China’s Huarun Dadong yard has started retrofitting Hapag-Lloyd’s ultra-large containership Sajir to use LNG as fuel, in a move claimed to be the world’s first such conversion.

The 15,000 TEU vessel arrived at the Shanghai yard on August 31 for the retrofit works including the installation of a 6,500-cbm GTT LNG fuel tank.

To remind, German container shipping line tapped CSSC’s Hudong-Zhongua for the conversion project early last year. The state-owned yard is a shareholder in Huarun Dadong.

The project has been affected by the ongoing Covid-19 pandemic as Hapag-Lloyd previously planned to start the works in May.

The world’s first large contairneship conversion to LNG power has a price tag of about $30 million.

This pilot project will help Hapag-Lloyd to decide on future LNG conversions but also paves the way for other boxship owners looking to slash emissions and comply with more stringent IMO rules.

Besides new tanks, the ship’s fuel system and its existing heavy fuel oil-burning MAN engine will switch to dual-fuel power. This includes LNG and low-sulphur fuel oil as a backup.

Hapag-Lloyd inherited the LNG-ready Sajir after its takeover of UASC back in 2017. Its 16 sister ships are also LNG-ready and fit for retrofitting.

Huarun Dadong expects to complete the retrofit works on Sajir by year-end.

LNG containership year
This year will probably mark many firsts for ultra large LNG-powered containerships. Besides the first conversion, the world will see the delivery of the first two giant LNG-powered newbuilds.

As previously reported, Offshore Energy understands that CMA CGM’s 23,000 TEU Jacques Saade will be delivered to the owner this month.

The world’s largest LNG-powered vessel will serve the Europe-Asia route. It will bunker LNG from the MOL-owned and Total-chartered Gas Agility that recently arrived off Rotterdam.

Besides this vessel, CMA CGM has additional eighth sister ships on order at Hudong-Zhonghua and its unit Jiangnan.

Furthermore, the French shipping group is also involved in the second LNG containership delivery slated for this month, but this time as a charterer.

Read more: Hapag-Lloyd to increase rates from China

Eastern Pacific Shipping’s 15,000 TEU Tenere has completed gas trials in South Korea and is ready to start work.

The French firm will charter all of the six sister vessels scheduled for delivery from Hyundai Samho by 2022.

Source:  assafinaonline


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