Lowering the price tag

The World Shipping Council Council (WSC)?urged?the IMO to combine its possible greenhouse gas (GHG) pricing mechanism with a so-called green balance mechanism. WSC represents global container liners and has argued that a green balance mechanism will make fossil fuel users pay more for their emissions. These penalties can be channeled to reward first movers into green fuels, to help bridge the price gap between fossil and green marine fuels and reduce the cost of the green fuel transition, it argued.

According to the WSC, ships running on transitional fuels, like biofuels with more than 65% GHG reductions, should be eligible for green balance funds until 2029, after which they must pay green balance fees.

LNG and the most common biofuel blends of 24-30% emit only about a quarter less GHG emissions than VLSFO and LSMGO on a lifecycle basis. However, they are much more affordable and technologically feasible than zero-emission potential fuels like green ammonia or green methanol. As transitional fuels, LNG and biofuel can help shipping meet interim regulatory climate targets while mitigating upfront investment costs and bunkering infrastructure constraints related to green ammonia and green methanol.

And these transitional fuels continue to make headlines.

Spanish energy company Cepsa started?construction?of a second-generation biofuel plant in Spain, with an expected capacity of 500,000 mt/year. There are plans for a future expansion that could double its biofuel production capacity to 1 million mt/year.

Cepsa's plant will also produce biogas, which is essential to produce biogenic carbon dioxide (CO2). Biogenic CO2 is released because of the combustion or decomposition of organic material, that is, biomass and its derivatives. Biogenic CO2 is crucial to produce green methanol. Cepsa has confirmed that this facility is a “key element” of the Andalusian Green Hydrogen Valley Project, which Spanish Prime Minister Pedro Sánchez has said will help push decarbonisation in hard-to-abate sectors like shipping.?

Avenir LNG anticipates?that global LNG bunker demand will increase to 5.7 million mt this year and 8.3 million mt next year, according to its investor update report. This forecast is higher than 壳牌 estimate of global LNG bunker demand at 5 million mt for this year. Avenir LNG predicts that global LNG bunker demand will surge tenfold over the next decade, reaching 36.9 million mt/year by 2033, up from the current 3.8 million mt/year. The report also stressed the need for additional LNG bunker vessels, as demand for bunkering is expected to overshoot LNG bunkering capacity from 2025.

At least three ships were bunkered with LNG in the past week, two in Singapore and one in Malaysia. Pavilion Energy delivered?an undisclosed amount of LNG to one of Hapag-Lloyd’s container ships in a ship-to-ship (STS) bunker operation in Singapore.

LNG bunker supplier FueLNG Private Limited delivered?LNG to Seatrium 's floating research lab in Benoi Yard, Singapore.

Petronas Trading Corporation (PETCO)?supplied?an LNG stem of unspecified volume to one of 达飞轮船 's car carriers in the Malaysian Port of Tanjung Pelepas.

T&E has?urged?the IMO to revise its Carbon Intensity Indicator (CII) regulation to measure absolute well-to-wake (WtW) emissions and increase the energy efficiency target to 38% for shipping. This is to have a realistic shot at meeting the IMO’s 2030 GHG ambition.

Increasing the energy efficiency of ships could theoretically reduce the burden of lowering emissions that might otherwise fall solely on cleaner marine fuels in the future. This will in turn reduce costs associated with higher consumption of fuels with true zero-emission potentials, according to the T&E report.

By Konica Bhatt

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