Several stakeholders in Singapore’s bunkering industry provided insights on Singapore’s marine fuels landscape in the near future during a deep dive finale session at the 22nd edition of Singapore International Bunkering Conference, also known as SIBCON 2022, on Thursday (6 October).

Caroline Yang, Chief Executive of Hong Lam Marine and President of Singapore Shipping Association, who was moderating the session What’s Next in Singapore’s Marine Fuels Landscape, asked panellists their prediction on the main fuel types that will fuel ships and the types of carbon abatement measures they will see in 2030.

She also asked the panel about their thoughts if Singapore will remain the top bunkering port in a multi-fuel environment, what they foresee would be the expected fuel mix of 2030, expected investments that Singapore needs to have to maintain its top position, uptake rate of biofuel at the republic, and more.

Global Centre for Maritime Decarbonisation

Dr. Sanjay Kuttan, Chief Technology Officer, Global Centre for Maritime Decarbonisation, who was one of the panellists, said there would be no major shifts in the fuel mix in 2030 if Singapore continues to remain as one of the largest transhipment ports in the world and the current rate of alternative fuels production remains unchanged.

“What you will begin to see is the emergence of LNG as a maritime fuel because there are 700 new LNG ships on order today. But that’s still a drop in the ocean of the 80,000 vessels that are on water,” he said.

“We will also the increased use of drop-in biofuels, specifically Gen 2 and possibly even Gen 3 biofuels will emerge by 2030. Even though you will see more biofuels entering the market, VLSFO still will be the dominant base fuel in 2030.”

He shared with the audience the Neste refinery in Singapore produces a significant amount of hydrogenated vegetable oil (HVO), a good biofuel that can be mixed with marine gas oil (MGO), which presents an unique opportunity for Singapore to supply a 2nd generation biofuel at scale.

“Singapore could establish vertical algae farms for the production of 3rd Generation biofuels. So, I think if we push our imagination harder and if we want to become a biofuel hub for the shipping industry, we have the elements to actually realise that but only if it becomes a part of our national strategy.”

Dr Kuttan also pointed out that carbon abatement measures like ship board carbon capture systems can be powerful tools – but only if the industry is able to introduce a responsible solution to dispose the captured CO2 effectively.

“Ultimately, no matter how much CO2 you capture, you need to fix it and not release it into the air, so there’s still a few more building blocks to be established,” he notes.

“But I think we need to recognise that we need to use every solution in our “bag-of-tricks” to try and “bend-the-curve” as soon as possible because the technology is available, however, we must ensure that the overall lifecycle analysis of any solution needs to have a positive impact on Mother Nature.”

BP

Anthony Tolani, General Manager – Australia and New Zealand, Trading and Shipping – bp Marine, agreed with Dr Kuttan’s sentiments on biofuels and added stakeholders are enthusiastic in joining in decarbonisation efforts – though not necessarily led by regulations at this point of time.

“What we’ve seen is a voluntary adoption of biofuel, particularly where there are no incentives available and I think that will continue to build,” he said.

He added regulators can also play a role as there are still some restrictions at the moment constraining the “free adoption of biofuels”.

“So what we’re seeing is an industry pushing for regulations to keep pace. Starting January 2030, we may see the emergence of methanol; however, predominantly it will be a larger uptake of biofuels, and LNG as well as VLSFO,” he said.

He also said it would be possible for biofuel bunker sales in Singapore to reach five million tonnes before 2030.

Maritime and Port Authority of Singapore

Capt. Daknash Ganasen, Senior Director of Operations & Marine Services, Maritime and Port Authority of Singapore, echoed other panellists of SIBCON 2022 in suggesting there will be no clear winner at the moment in the anticipated fuel mix in the near term,  but there are  opportunities for every type of alternative bunker fuel.Capt Daknash said that shipping companies   could also be looking into new renewable technology on board ships such as wind energy and solar energy to supplement or complement emission reduction in tandem.

He also gave his take if Singapore will remain the top bunkering port in a multi-fuel environment when it comes to marine fuel volume.

“We do, of course, definitely aspire to be the top bunkering port in the world as we move into a transition from fossil fuel to the next alternative fuel and renewable energy,” he said.

He noted MPA has partnered with various initiatives including being a member of the Castor Initiative and SABRE consortium, in itself is a testament that we aspire to be amongst the top bunkering ports in the world moving ahead as well,” he said

Capt Daknash also shared other initiative such as  co-founding the Global Centre for Maritime Decarbonisation to look into the various aspects of the challenges that the industry face moving towards  2030 and 2050, and  initiatives with like-minded ports under the Future Fuel Port Network, which was formed with the Port of Rotterdam Authority and the Ministry of Land, Infrastructure, Transport and Tourism of Japan where parties collaborate, share information, and work on best practices together.

Equatorial Marine Fuel Management Services

Choong Sheen Mao, Director, Equatorial Marine Fuel Management Services (Equatorial), said there needs to be more strategic collaboration, not just within Singapore but also internationally.

“Equatorial sees Singapore as still being the leading bunkering hub in the world, especially with the focus on a multi-fuel future. Furthermore, the republic is not just a hub for bunkering, but a hub for many other aspects, such as financing, trading and digitalisation,” stated Mr Choong.

“The future is going to be much more complicated, requiring the Port to tackle difficult issues such as operational safety during ammonia bunkering.

“Nonetheless, good foundations have already been built over the years; for example the mandatory use of mass flow metering system paves the way to accurately measure the quantity of bunkers delivered, which may allow other things, such as accurate tracking of potential carbon emissions from the delivered products.

“Singapore has a strong and diverse ecosystem for us to adapt, collaborate and deal with future challenges. There has never been a more exciting time for the bunkering industry.”

He emphasised the company’s commitment to biofuels, adding: “Equatorial has already obtained our ISCC certification. There will be a gradual scaling up process in the adoption of alternate fuels, especially due to high prices.”

“Biofuel, because it is a drop-in fuel, it will be much more straightforward. Regulations will nonetheless have to kick in to incentivise shipowners to use such fuels. Short to medium term subsidies will help with the uptake of biofuel but, at the end of the day, the economics of consuming biofuel have to be sustainable in the long run.”

Mr Choong, meanwhile, noted decarbonisation developments within the shipping industry taking a rapid pace.

“Even within the past 18 months, the vocabulary of discussing about decarbonisation has matured rapidly. It is now quite established that the world will adopt the well-to-wake method in assessing carbon emissions. The industry has become much more refined and accurate in our references,” he explained.

“Before we discussed about the potential of ammonia [as an alternate marine fuel]. Now we speak about consuming green or blue ammonia. The transition to alternate fuels will be very interesting.

“How do we ensure that the price of transitional fuel or green fuel is competitive with conventional fuel? Could one solution be carbon taxes with a floating price mechanism against conventional fuels, with the involvement of price publishing agencies? This may assist us in the transition.

“Nevertheless, going green is going to be a very expensive exercise. Therefore, we need to be very selective in making sure we take the right steps. We cannot afford to take too many wrong steps. It will be too costly, especially to a single organisation.”

Manifold Times is an official media partner of SIBCON 2022; a series of articles related to the event written by the Singapore bunkering publication are as follows:

Related: Singapore: MPA develops framework to support biofuel bunker fuel deliveries
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Related: SIBCON 2022: S&P Global Market Intelligence and Bunkerchain in MoU
Related: SIBCON 2022: Singapore sets out to drive transformation in bunkering
Related: SIBCON 2022: Development of ISO 8217:2024 in progress; but ‘ineffective’ without industry adoption, foresees VPS
Related: SIBCON 2022 Interview: ExxonMobil to invest more than USD $15bn on GHG reduction initiatives by 2027
Related: SIBCON 2022 Interview: Eaglestar discusses challenges and possible solutions in embracing ammonia as a bunker fuel
Related: SIBCON 2022 Interview: Digitalisation in bunkering ops, can lower costs and enable decarbonisation, says StormGeo
Related: SIBCON 2022 Interview: Co-Convenors offer insights into Singapore’s upcoming Digital Bunker Document Standard
Related: SIBCON 2022 Interview: MFMs relevant for custody transfer of future liquid-based marine fuels, confirms Endress+Hauser
Related: SIBCON 2022 Interview: Clyde & Co discusses handling of bunker fuel quality disputes, alt fuels contracts
Related: SIBCON 2022 Interview: Singapore Bunkering TC Chairman shares republic’s direction on future marine fuel

Photo credit: Maritime and Port Authority of Singapore
Published: 14 October, 2022