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Shipping decarbonisation moving at faster pace than 20-year wait for LNG as marine fuel, observes DNV expert


Image Credits: Manifold Times

Repost: Decarbonisation for the maritime sector is taking place at a faster pace when compared to the timeline for the adoption of liquified natural gas (LNG) as a marine fuel, observes an expert at classification society DNV.

Dr Shahrin Osman, Regional Head of Maritime Advisory, Director of Maritime Decarbonization and Autonomy Centre of Excellence Asia – Pacific at DNV, believes there is now a “clear urgency” for the entire shipping industry to decarbonise.

“The first ship to use LNG as a marine fuel started operating 20 years ago and it is only today the material has become a mainstream bunker fuel,” he told Singapore bunkering publication Manifold Times on the side lines of Asia Pacific Maritime (APM) 2022.

“People are now collaborating a lot more than they used to; for example, the Global Centre for Maritime Decarbonisation (GCMD) is a public-private investment initiative formed at a scale we did not foresee taking place a couple of years ago.

“A clear urgency has also result in funding being easier to obtain for decarbonisation studies.”

Dr Shahrin pointed out GCMD in January commissioning an ammonia bunkering safety study for defining a set of safety guidelines and operational envelopes to establish the basis of a regulatory sandbox for ammonia bunkering trials at two Singapore sites.

“Clearly, collaboration is the fuel for the future. With ammonia bunkering studies done now, we will be able to identify key pain points and safety concerns, while finding their respective solutions, at an early stage.”

Multi-Fuel Future Planned for Singapore’s Bunkering Sector

The Maritime and Port Authority (MPA)’s target of reducing absolute emissions from domestic harbourcraft by 15% from 2021 levels by 2030 means local vessels will be transitioning to solutions offered by blended biofuel, LNG, diesel-electric hybrid propulsion, and full-electric propulsion.

The 1,600 licensed diesel-powered harbourcraft operating in Singapore will find electrification the easiest route towards decarbonisation, believes Dr Osman.

He noted MPA and Singapore Maritime Institute (SMI) in August 2021 awarding funding of SGD 11.3 million to three consortiums to research, design, build and operate fully electric harbourcraft over the next five years.

Funding for these projects will enable various technologies and charging infrastructures to be studied, test-bedded and deployed across different types of harbourcraft and operating profiles, through use cases proposed by the consortiums.

“Harbourcraft will be the first ones adopting electrification due to ease of entry. By 2030, technology could even produce batteries with higher energy density allowing electrically propelled feeder vessels to operate from Singapore to Port Klang, Jakarta and within the region,” he shares.

“With batteries, you not only reduce emissions but also forego the need to pay for bunker fuel.”

Biofuels also present themselves as attractive options for meeting MPA’s 2030 emission targets for the short term due to minimal CAPEX and immediate emission reductions (if using a B100 variant).

Further, biofuels are seen as the only immediate option available for the aviation industry’s pathway towards its decarbonisation route; a direction which will could further drive up prices of the material in the long term should it face similar demand from shipping.

However, other alternative fuels have a lower calorific value that requires significant onboard storage as compared to VLSFO.

Image Credits: Manifold Times

Hence, LNG will continue to be the obvious choice as a transitional bunker fuel for international going ships, highlights Dr Shahrin.

“We believe in fuel flexibility and at the moment LNG is the obvious choice for international going ships,” he said.

“This is because at the moment there are no other alternative marine fuels which have the infrastructure to support vessels undergoing deep sea operations,” he explains, while adding LNG’s benefits goes far more than the 20% to 25% carbon reductions offered.

“Too much emphasis on carbon reductions have been placed. By going to LNG, you are also helping the community closer to the coast line improve their health by eliminating local pollution such as SOx, NOx and PM from emissions. This is especially true for countries with shorelines such as Singapore.

“This is the reason why we have to go for LNG and there are no other options now.”

A Suggestion to Establish a NOx Fund for the Singapore Maritime Sector

Moving forward, Dr Shahrin suggests Singapore could implement a fund as an instrument to help early movers of maritime decarbonisation.

In 2008, the Norwegian Business Sector established the NOx-fund to achieve emission reductions, where the shipping, oil and gas, land-based industry and others, instead of a state tax, pay a far lower fee through NOx-payments.

This development established a private fund which collected approximately USD 100 million per annum.

In return, ships, platforms and industry plants can apply for funding in NOx-reducing measures through investment in technologies including selective catalytic reduction systems, technical energy efficiency measures, process optimisation and alternative fuels such as LNG, battery electrification, and shore power/offshore wind for platforms.

Funding is based on actual documented NOx-reduction in Norwegian domestic trade, but limited up to 70% funding of the extra investment cost.

“In Norway, every ship which visits its ports has to pay to the NOx fund so this fund helps stakeholders pay for future investments,” shares Dr Shahrin.

“Today, the majority of the NOx-fund portfolio has even expanded to include technologies related to CO2 reduction, in addition to NOx.

“Probably, Singapore could consider something around that so money taken from emissions taxes (i.e. a NOx fund) can support a system to encourage infrastructure improvement.”

Image Credits: Manifold Times

Note: DNV has since 2008 been hired by the NOx-fund as their advisor, basically encompassing:

  • Evaluating and making recommendations with regards to technologies and project funding for all applications. DNV’s support recommendations are presented to the NOx-fund Board (DNV participates in the Board meetings as advisor, not member), prior to the Board’s support decisions.
  • Verification of actual implementation and emission reducing effect when measures are put into operation (typically for 1-2 years of operating of the measure) – as basis for the actual payment of fundings.
  • Providing a wide range of techno-economic and strategic advisory and analysis for the development and adjustment of the support arrangement – such that incentives are up to date with technology development and industry needs, and the NOx-fund can prioritise with regards to “what gives maximum reduction for money, in the right time”.

Source:
Manifold Times

Marine Online Media Team
Please email us at marketing@marineonline.com to contact the author for this article.

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