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Marine Biofuels Begin To Make Headway In Ocean Shipping

Marine Biofuels Begin To Make Headway In Ocean Shipping



Biofuels created by recycling used cooking oils are being tested by ocean-going ships in pilot trials around the world. Such biofuels may even be gaining acceptance by ocean-shippers, freight forwarders and ship operators.

The latest news is from international container ocean carrier CMA CGM. It has teamed up with the Port of Rotterdam, Ikea Transport & Logistics Services and biofuel company GoodShipping to test biofuels made from used cooking oil and forest product residues. The fuel, which can be used in a marine engine without modifications, delivers a reduction in carbon dioxide emissions of about 80 percent to 90 percent. And it "virtually eliminates" sulfur oxide emissions – that's pretty handy for shipping operators that need to comply with the International Maritime Organization's 2020 deadline for 0.5 percent or less sulfur content in fuel.

Elisabeth Munck af Rosenschöld, Head of Sustainability at IKEA Global Transport & Logistics Services, said: "through our pilot we want to show that the means for de-carbonization in terms of alternative fuels are available… with a successful pilot completed, our intention is to put the equivalent of at least all our containers out of Rotterdam on biofuel."

Xavier Leclercq, Vice President of CMA Ships, commented: "Having a [heavy fuel oil]-equivalent solution in biofuel oil available with no engineering or operational changes required to our vessel offers a safe, manageable and innovative opportunity to facilitate shipping's wider transition to new fuel solutions."

But that's not the only initiative.

Australian mining giant BHP,  major Japanese shipping operator NYK, biofuel company GoodFuels and BLOC, which delivers blockchain solutions to the maritime industry, announced in early February that the BHP-chartered and NYK-owned bulker, Frontier Sky, has taken a delivery of a 30 percent/70 percent biofuel-marine gasoil blend of ship fuel. This particular bunkering reportedly saved over 50 metric tons of carbon dioxide emissions (50 metric tons equals 110,250 U.S. pounds or 55 U.S. tons).

Abdes Karimi, Head of Strategy and Planning at BHP, commented, "We fully support moves to decarbonize the freight industry, including implementing IMO 2020. Biofuels offer an innovative approach to more sustainable bunker fuel."

NYK's reduction targets for greenhouse gas emissions are 30 percent per ton-kilometer by 2030 compared with a 2015 base year, and 50 percent per ton-kilometer by 2050, according to GoodFuels. Hiroshi Kawaguchi, general manager of the Dry Bulk Marine Quality Control Group at NYK, added, "For shipping to reduce its carbon emissions, we need to ensure that we are exploring how all available technologies can play a part. Using sustainable marine fuel like biofuel unlocks significant emissions savings."

Meanwhile, back in November 2018, Danish shipping operator Norden completed a test voyage, using carbon-neutral biofuel from GoodFuels. The voyage was from Rotterdam (Netherlands) to Tallinn (Estonia) on a 37,000 deadweight, 182 meter-long handysize product tanker that was sailed in ballast. During the voyage, the vessel's fuel was swapped from a conventional fuel to the biofuel. It was discovered that the biofuel did not adversely affect the engine or its performance.

Norden CEO Jan Rindbo commented, "Now that we have proven CO2-neutral transport as a viable alternative, I am convinced many carbon-conscious customers within a foreseeable future will demand this type of transport."

And, finally, in September last year, GoodShipping announced it had bunkered 22,000 liters (5,812 U.S. gallons) of treated vegetable oil (made from used cooking oil) into the Samskip Endeavour, an 800 TEU, 140.6 meter-long, feeder container ship. "With this first bunkering, GoodShipping shows that it is possible for cargo owners to influence the carbon footprint of the sea freight in their supply chain," according to a statement from GoodShipping.

And there are quite a few other projects underway around the globe.

From a business perspective, marine biofuels potentially presents a large market opportunity. Today, marine fuel consumption is estimated to run at about 330 million metric tons each year*, of which 80 percent to 85 percent is thought to be residual fuel oils. And, with the forecast growth in seaborne trade, that volume of consumption could double. Global demand for marine biofuels could reach more than 83 million metric tons a year, according to the "Paris Process On Mobility And Climate," a group that collaborates to create action on transport and climate change.

There are a variety of factors, of course, that will influence whether or not there is a widespread uptake of alternative fuel such as biofuels. Peter Wells, a manager of shipping services at the New Zealand InterIslander ferry, pointed out several of these factors during an International Energy Agency Bioenergy conference in 2017. Firstly, carriers tend to be risk-averse. However, this may be changing in regard to biofuels, as evidenced by the comments of Norden and others.

Wells also pointed out marine fuel prices are low. Yet, IMO 2020 may be about to change all that. In a March 2019 submission to an Australian parliamentary inquiry into shipping, trade association Bioenergy Australia noted that, at the time of writing, marine gasoil (distillates) was about 40 percent more expensive than intermediate fuel oil 380 (a heavier and dirtier fuel). Bioenergy Australia also pointed out that 0.5 percent sulfur fuel is forecast to cost about $200 to $400 a metric ton more than existing high sulfur fuel oil. A metric ton is equivalent to 2,205 U.S. pounds. So there could well be a cost-incentive to change to biofuels too.

Wells also pointed out, as others have, that marine fuel standards are "easy to meet" as ships' engines are tolerant of fuels that would otherwise be regarded as being of low quality. A further factor that could help promote the acceptance of bunkering biofuels is that there are relatively few points of supply of marine fuels. About 15 ports account for nearly 85 percent of marine fuel bunkering globally.

That said, new analysis and forecasts from the International Energy Agency suggests that when the low-sulfur regulations come into force next year then, initially at least, many shipping companies will prefer to burn marine gasoil.

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The IEA says in its Oil 2019 outlook that there was a demand for 3.38 million barrels / day of unscrubbed high sulfur fuel oil in 2018 and 0.87 million barrels / day for marine gasoil. Jump forward a couple of years and, by the end of 2020 the IEA forecasts, unscrubbed high sulfur fuel oil demand will have plummeted to 0.71 million barrels / day and marine gasoil will have jumped to 1.98 million barrels / day.

Meanwhile, scrubbed high sulfur fuel oil demand will have increased from zero to 0.68 million barrels / day - the IEA estimates that there will be 4,000 scrubbers installed on large ships by the end of 2020. Finally, very low sulfur fuel oil demand, now at zero, will have increased to 1.01 million barrels / day.

"The quantity of VLSFO produced will initially be limited to 1 mb/d because of reduced availability of low sulphur blending materials," the IEA says.

It continues: "Some shipping companies may also be reluctant to adopt a new fuel immediately, and would prefer to use MGO until they have confidence that VLSFO will be easily available in ports and stable and compatible with similar grades.

"While there is no doubt that this transformation will be a challenge, it will be manageable over time. Orders for scrubbers to be fitted on ships have increased, and as demand for high sulphur fuel oil plummets there will be enough marine gasoil as well as new ultra-low sulphur fuel oil available to fill the gap."



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