Green marine fuel’s safety challenge

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??This week: The 400-tonne spill of marine fuel off Singapore’s southern coastline has cast a spotlight on the danger of bunkering in a busy port.

This danger is especially critical as the nation contemplates a future as a multi-fuel bunkering hub that can cater to different kinds of fossil fuel alternatives, including highly toxic ammonia and methanol. Without addressing the safety of those fuels, it is unlikely they can be viable replacements for diesel.

On Jun 14, the Netherlands-flagged dredger Vox Maxima and Singapore-flagged bunker vessel Marine Honour collided at Singapore’s Pasir Panjang Terminal. The hit punctured a holding tank on Marine Honour, releasing the low-sulphur fuel into the waters.

Oil from the spill was visible across Singapore’s southern and eastern coastlines and as far as some of its southern islands. As terrible as that was, it raised another question: What if the fuel was not diesel but ammonia or methane?

The global shipping industry has set itself a target to achieve net-zero emissions by or around 2050. Hydrogen, ammonia and methane are among the leading candidates to replace the diesel that typically propels ships.

Of those three alternatives, hydrogen is potentially the cleanest because it is a relatively harmless chemical that produces water as a by-product of combustion. However, green hydrogen – which is hydrogen produced using sustainable or renewable energy – is also furthest from feasibility. It has yet to achieve scale and overcome major challenges in terms of storage and transportation.

Ammonia and methane, however, are already being used on ships. In 2023, Maersk launched the world’s first methanol container ship. The first ammonia-fuelled ship set sail this year from Singapore.

In the meantime, existing ships are also being retrofitted to work with either fuel.

It is still too early for one alternative fuel to emerge as the global standard because the availability and carbon footprint of each fuel is dependent on location. Methanol might be more easily available in a market with abundant biofuels, for example, whereas ammonia might be easier to obtain in a market with a surplus of solar or wind energy.

What might happen is that certain fuels will dominate certain shipping routes. For Singapore, being able to cater to all those fuels offers a way to ensure it can remain a global shipping hub.

Addressing the dangers associated with ammonia and methanol need to be priorities, though. An ammonia leak or a methanol spill would negatively impact ecosystems, although the extent of the environmental damage is still being studied.

In terms of toxicity, however, there’s little doubt that both ammonia and methanol are more dangerous to humans. Methanol is also highly flammable. These raise the risks for people operating near the chemicals.

At least one industry player has become more cautious about ammonia. Shell was reported in 2023 to have placed ammonia bunkering on the backburner in favour of liquefied natural gas and methanol over concerns about ammonia’s dangers.

Nevertheless, optimists believe the dangers can be overcome. After all, millions of tonnes of ammonia are already transported by ship each year.

The number of tanker oil spills has also been falling over the years. Statistics provided by the shipping industry’s clean-up organisation, ITOPF, show that in the 2010s there were 45 medium spills (defined as seven to 700 tonnes of oil) and 18 large spills (more than 700 tonnes) around the world.

That was significantly fewer than the 149 medium spills and 32 large spills in the 2000s. In the first three years of the 2020s, there were 22 medium spills and five large ones.

Accidents are inevitable, however, and it only takes a handful of serious incidents to turn public opinion. Even though major nuclear accidents are rare, the names Three Mile Island, Chernobyl and Fukushima have become shorthand for the dangers of nuclear fission power. A similar scenario could play out for sustainable marine fuel alternatives if regulators and industry are careless.

??Top ESG reads:

1. Singapore needs to tighten energy-efficiency requirements for commercial buildings to spur progress, says columnist Joan Ng.
2. Tenants in the Jurong Innovation District in Singapore could receive support for innovative decarbonisation solutions under a S$4 million call for proposals.
3. Sabana Industrial Real Estate Investment Trust has priced S$100 million of sustainability-linked bonds due 2029 at a 4.15 per cent coupon. The industrial landlord must reduce its Scope 2 emissions by 30 per cent from 2023 levels by 2028 to avoid a coupon step-up.
4. Singapore government-owned investment firm Temasek is selling its entire stake in liquefied natural gas trader Pavilion Energy to a subsidiary of Shell.
5. Sails have staged a comeback in shipping as owners try to overcome the challenges of decarbonisation.

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