Green Fuels Update
Methanol and ammonia continue high levels of activity
This is the second in a series of posts providing a ~monthly first-look synthesis of announcements around green fuels for maritime applications, mainly to keep our course content fresh regarding this rapidly developing area of the industry. The first post predated substack and can be found here.
Regulatory
The big news in the regulatory world is the final adoption of the EU’s FuelEU package; with this, the shipping industry is included in the EU’s emission trading scheme and will comply with additional requirements in 2025. Splash247 provides a high-level overview. The passage of this law was widely expected and continues a two-speed approach, with the EU significantly outpacing mandatory IMO rulemaking. Whether and how we see a bifurcation in the global fleet at some point into EU-trade and non-EU trade vessels remains an interesting question.
A Portugese - Brazil Green Corridor announcement appeared, along with a small-scale grant announcement in the US for demonstration-scale green fuel projects.
Methanol
Methanol continues to have a great run, with newbuildings, conversions, and supply chain announcements coming in fast.
Vessel orders
Vessel orders did not exceed last month’s pair of major containership orders, however DNV places the total methanol order book as over 200 vessels now, with 33 newbuilds and 15 retrofits reported last month. Unlike ammonia, hydrogen, or other fuels, there is a potential to convert existing vessels to methanol from conventional residual fuel. The energy density of methanol is lower, so a range reduction will occur, and the lower flashpoint of the fuel is also a concern. However conversions seem to be worthwhile for many owners. Ocean Yield announced an order for four methanol-ready LR1 tankers just after the turn of the month, followed by Hafina ordering four MR tankers. MAN also announced research partnerships to develop 4-stroke medium-speed engine methanol refits, in addition to existing approaches that have concentrated on larger 2-stroke low-speed engines. Wärtsilä announced a new 4-stroke methanol auxiliary engine order which appears to be tied to CMA CGM 15,000 TEU methanol-powered containership order from last month.
Bunkering and Supply announcements
Lots of work on methanol bunkering as well, with an AIP announced for a dual-fuel bunkering vessel in China. OCI has continued its run as a leader in methanol bunkering, completing a second bunkering of Maersk’s still-to-be-named feeder vessel, this time in Singapore. OCI also announced a deal with X-Press feeders for providing green methanol (bio or e-fuel source unclear) in Rotterdam, with Unibarge providing the final link to the vessel. A smaller-scale, truck-based biomethanol supply agreement was also announced for the Port of Amsterdam. Carbon Sink similarly announced a US deal with Jones-Act operator Rose Cay Marine to distribute Carbon Sink’s methanol to US ports. Clarity on the supply of green methanol also appears to be increasing. SunGas had previously (Dec 22) announced a deal with Maersk to provide green methanol. They recently provided details of a 400,000 tonne/year plant using wood-based feedstock in Louisiana. The plant includes carbon capture, but where the captured carbon will go is not clear in the announcement. In China, a 10,000 tonne/year plan was announced by ZEME, with a study for a 500,000 tonne/year plant also underway. While liner and long-term charter bulk fleets have been the major movers in methanol to date, tramp bulk operator DS Norden took a minority stake in Mash Makes, a small-scale methanol additive company based in Denmark with prototype plants in India. The tramp bulk trades have been some of the slowest to move towards green fuels, it will be interesting to see if this is the start of more movement in this market sector.
Ammonia
Ammonia continues to mature, though it does not have the vessel order numbers we see so far for methanol. Ammonia is also a harder conversion project - the fuel requires specialized tanks and has more serious life safety concerns than methanol. While it is a carbon-free fuel, nitrous oxide emissions from combustion of ammonia need to be carefully tracked as they can be up to ~265 times more damaging than mass-equivalent CO2 emissions.
Vessels and Technology
Vessel announcements continue to be largely AiPs or future conversion candidates. ABS presented an AiP to a Foreship/Seaspan/MMMCZCS joint effort to design a 15,000 TEU ammonia-powered containership. Höegh Autoliners added four more ammonia-conversion-ready Aurora class vessels to their orderbook, making the total 12. NYK’s tugboat Sakigake, already running on LNG, is completing its last voyages before being taken in hand for a conversion to ammonia fuel. Hyundai Mipo Dockyard announced two orders for liquified CO2 carriers that will be ready to convert to ammonia as fuel and can also carry ammonia as a cargo. Ammonia and CO2 can be carried with similar technology, and I expect more growth in this type of fleet as green ammonia shipments and CO2 sequestration efforts ramp up. These vessels are still relatively small (~160mx27.4m).
Technology developments for ammonia also continued at a high pace. Lloyd’s Register published a study on the human factors considerations in using ammonia as a fuel. The Singapore Maritime Institute awarded a new grant to study the impact of ammonia releases during bunkering operations. Engine technology continues to advance as well; following major announcements last month from MAN, WinGD announced that its ammonia-fueled high-pressure diesel cycle low-speed X-DF-A engines will be available by 2025. A report, without much detail, suggests that Hyundai Heavy Industries is also developing medium-speed ammonia engines in-house.
Bunkering and Supply announcements
A $4.6 billion investment in South Africa for a large (but I can’t find a tonnes/annum figure) green ammonia facility is the biggest supply chain news of the month. The location looks to take advantage of good ocean connections, extensive solar potential, and an existing desalination plant that has a water waste stream. This follows a green H2/ammonia plant in neighboring Namibia that was announced in May, with a 2030 target of 2 million tonnes per year. Mabanaft continued to progress plans for an ammonia storage and bunkering facility in Hamburg, though no concrete construction dates appear to be finalized. More details of transshipment arrangements for EverWind Fuels H2 and ammonia plant in Newfoundland were also announced, along with a UAE feasibility study for a ~ 100,000 tonnes pet year ammonia plant with an extension to ~700,000 tonnes per year. An early plan for a ~6 billion investment in a green H2/ammonia plant Tamil Nadu, India also appeared, with a target over 1 million tonnes of ammonia per year. Construction is not believed to have started on any of these.
Everything Else
Nuclear had a moment last month; an ABS report on commercial nuclear propulsion was announced with lead-cooled small reactors (but no link to the full report provided grrrr), along with a new RINA/Fincantieri/newcleo consortium project looking into closed mini reactors also using a lead-based approach at ~30MW. Alfa-class chief engineer retirement options look to be increasing. If one looks at the entire energy chain from renewable electricity production to turning the propeller, it is hard to do better than batteries. So far, batteries have proven too heavy for anything but the shortest-range vessels, so the launch annoucement of a 700 TEU, 1000 km voyage (almost certainly not range) inland containership turned heads. It looks like the plan is to swap containerized batteries along the voyage, though exact numbers and power density per container are still fuzzy. However, this is an area where batteries could give hydrogen fuel cells competition. In H2 news, Yanmar announced it is entering the H2 business with a fuel cell line and a 700 bar pressurized H2 refueling station under development.