7 minute read
Clean Fuel Opportunities
Felicity Landon reviews the principal fi ndings of the Getting Ready for Zero Carbon Marine Fuels session at the IAPH World Ports Conference – diverse opportunities are identifi ed
Ports have the opportunity to become the epicentre of energy production, energy distribution and energy consumption, according to José Firmo, IAPH Vice-President Central and South America.
Speaking at the IAPH World Port’s conference session on ‘Getting Ready for Zero Carbon Marine Fuels’, he said: “I think bunkering and what’s going to happen with green fuels in the future is probably just a component of what ports should be doing in terms of strategic positioning for this new energy business that is coming. I am sure it is going to be much bigger than this.”
Firmo, who is CEO, Porto do Açu, Brazil, pointed out the huge amount of energy required and added: “What we probably don’t know about the oil & gas industry is that it declines at a rate of about 15 per cent every year, so just to maintain the same amount of production, a huge amount of money needs to be invested.
“So, with the whole story about energy availability in the future coming from the decline of oil & gas and the global growth of required energy, it is just an amazing opportunity – and we are going to transition to something.”
Right now, the absolute best strategy is to keep discussing, he said. “Let’s make sure our strategies in our ports are ambitious enough to take that position, not in one aspect of it but in the entire spectrum of how it can change completely the energy landscape.”
Flexibility is the key, he added. “Let’s make sure we don’t close ourselves to any one of these solutions.”
FUEL READINESS
Peter Alkema, Chair of the IAPH Clean Marine Fuels (CMF) Working Group and also representing the Port of Amsterdam’s Harbour Master Division, said: “It’s all about fuel readiness – being a fuel-ready port. That is, having availability of fuel and visibility, infrastructure, regulation, your governance, but also having safety management in place.”
Ports looking at fuel readiness can start with small amounts in the pioneer stage, he advised. As for regulation, “maybe the regulations are not in place, or you have to make them yourself as a port”.
Safety has to be 100 per cent, said Alkema. “You have to arrange for safety management before you can even start a project and support the pioneers in the industry.”
The CMF working group has developed LNG checklists, and these are now being developed as liquefied gas checklists including for hydrogen. The working group also has blueprints for checklists for methanol, and checklists for ammonia are being worked on, he said.
“There is also the system-based level; for example, we have an audit tool that can support a port authority or any competent authority in assessing the SMS of a bunker operator, assessing the way it interacts with all the other players that are part of the bunkering.”
He also noted the value of a ‘bunker terminal ready’ tool which helps terminals to get experience and guidance in receiving vessels fuelled by hydrogen, methanol or ammonia, whether for bunkering or just being alongside.
“You may even think,” he suggested, “I am not a bunker hub, so I don’t need all these tools’ – but you are in the future going to receive vessels that sail on big amounts of methanol, big amounts of ammonia, for example, and terminals have to be ready for these vessels. You have to have a certain readiness in time for the new fuels that will be used,” he emphasised.
The Port of Amsterdam is already a major energy hub for the Netherlands, noted Alkema. It also has experience in making difficult transitions – from being a major coal port to no longer handling coal for the hinterland in Germany.
He further pointed out Amsterdam is already a ‘multifuel’
8 Maximising safety
in the transition to clean fuels is of paramount importance – Amsterdam has developed LNG check lists
port; hydrogen bunkering is happening on a daily basis, alongside LNG and methanol. “We also believe it is a transition period, so you need some time to use some fuels even if they are not carbon neutral,” he said.
AMMONIA POTENTIAL
The ‘Getting Read for Zero Carbon Marine Fuels’ session also included presentations by Tessa Major, Director Bunkering – Port Relationships and Regulations for Yara Clean Ammonia, and Jason Chesko, Director, Global Market Development and Head of Methanol Marine Fuels at Methanex Corporation.
As a fertiliser company, Yara depends on ammonia as the base product; it has 17 plants worldwide and the largest market share in ammonia trading and shipping, said Tessa Major.
The new business unit, Yara Clean Ammonia, was set up in February 2021 to target new markets using clean ammonia.
“We have an end-to-end approach looking across the entire value chain,” said Major. “We are eyeing hydrogen and ammonia production.”
Demand for ammonia as a low-carbon shipping fuel is expected to increase exponentially from 2025, she said. “If 24 per cent of the shipping industry chooses ammonia, you are looking at demand of 182m tonnes per year, which is the same capacity which is produced globally today. Momentum for ammonia as a fuel is growing rapidly and pilots are growing exponentially.”
Yara is not a bunkering company and does not have a vision to become one, said Major, but it does want to connect its clean ammonia with the end user. In some regions the company would have to be “a little bit forward-leaning”. In Norway, for example, Yara has already purchased ammonia bunkering barges, focusing on the offshore industry.
8 Yara wants
to connect its ammonia to the end user – pictured the company’s ammonia plant at Porsgrunn, Norway
Green Corridors: Concept to Reality
The concept of ‘green shipping corridors’ must be aligned with cargo owners’ interests, delegates at the IAPH session on ‘How to Develop a Coordinated and Resilient Network of Green Shipping Corridors’, heard.
Ingrid Irigoyen, Director, Aspen Institute and Facilitator of the Cargo Owners for Zero Emissions Vessels (coZEV) initiative, said cargo owners’ voices were not being adequately represented in discussions around zero carbon shipping. Cargo owners want zero-carbon shipping, and it is important to give confidence to the market that there is a customer at the end of the value chain for the zero carbon transition to happen, she underlined.
The coZEV initiative is working to bring cargo owners together, aggregate demand and deploy demand, and all of that is in support of green corridors. Collaboration and working together are vital, she said.
“The concept of green corridors needs to be aligned with cargo owners’ interests. coZEV provides them with information about green corridor concepts, she said. “Most companies don’t have dedicated staff for vessel decarbonisation, so it is one of the services we can provide – making it easier for them.”
The current situation, said Irigoyen, is that while a cargo owner might choose net zero commitments regarding maritime transport, “there is nothing they can do except pay a premium for biofuel.”
It is important to ensure that the transition to zero-carbon fuels is smooth and affordable, and – after the disruption of the past two years – doesn’t result in more disruption, she said.
“Price and reliability will probably still be king for some while but we want the climate impact to be internalised – and this is happening in some companies.”
However, she noted, the year-to-year contracting model for container freight “is not going to get us there”.
“You are going to need to see more multi-year contracts for zero emission shipping, because that is the only way to underpin the whole value chain of investment that needs to happen. We have seen a little bit more multi-year contracting in the past couple of years – not climate
8 Green corridors need to be strongly aligned
with cargo owners’ interests
driven, but we can harness that breaking of the mould, to think about those longer-term commitments that will provide carriers, shipowners, fuel producers and investors with the confidence that there is a customer at the end of this value chain that wants this and is going to do their part.”
Ports can take steps, she concluded – for example, by thinking about what kind of incentives they are providing for cargo owners to help them make their contribution. “For example, if they are paying a premium for zero-emission – is all they get GHG reduction? Could they get a fast lane to the berth? Could they get offloaded faster, to enable them to be inspired?”
