October-November Green Fuel Review
Hydrogen and Ammonia make strides while Methanol vessels multiply quickly
A bit more of a gap from the last update, so this one will cover the end of September, October, and half of November. Overall, the Green Fuels world continues to expand rapidly while remaining remarkably diverse. Ammonia continues to look promising long-term, but Methanol is seeing significant supply announcements and a strong orderbook. Hydrogen is also fighting for a role, while wind keeps racketing more retrofits and projects. Nuclear continues to be discussed, without a first mover yet.
Regulations, Studies, and Market Developments
UNCTAD’s 2023 annual report was the biggest study to appear; while this report is largely retrospective, it places the decarbonization challenge in context. Seaborn trade is expected to grow 2-3% per annum for the next five years, emissions are still rising, and owners still don’t have a clear path forward. Everyone is waiting to see what CII will do (slow everyone down? Retrofits? Is there enough green fuel coming?), but the 2030 intermediate checkpoint looms ever closer. In Athens, the GMF laid out these challenges. After being bullish about the amount of renewable energy available over the summer, L.R. took a more negative view of the ability to complete sufficient retrofits of existing vessels to burn green fuels in a new market report. This report was surprising because only ~15 yards were judged capable of carrying out retrofits. One would assume a strong market might increase this substantially. For example, over 1,000 vessels were retrofitted with exhaust gas scrubbers in 2020 alone, a market that largely did not exist five years prior. Of course, with rapid expansion, quality can suffer.
Green corridor announcements and regional focus areas came fast and furious this autumn. Such arrangements are critical for establishing the alternate-fuel infrastructure necessary for decarbonization and reducing the first-mover risk to industry.
Rotterdam to Oslo: Notable for SeaShuttle, a hydrogen-powered concept, link. Rotterdam also proposed lower port fees for zero-carbon fuels but excluded biofuels from this program.
LA/LB and Shanghai: Including in-port emissions from port vehicles/infrastructure. An overview has been released.
LA/LB and Guangzhou: Overview only
Tallinn and Helsinki: Overview only
Several related developments include India selecting ports for green fuel exports and a Tyneside port roadmap that mainly features Methanol as a fuel, with Rotterdam as a potential first destination. The UK also announced a $26 million green propulsion research network linking industry and academia.
Beyond routes and ports, a few more general consortia have been announced. MOL and EDF are exploring using floating offshore wind for renewable fuel production. CMA CGM announced in September an effort to increase collaboration with Maersk around green fuels and methanol standards, but by November, it was reportedly reducing the number of methanol vessels ordered in favor of LNG. However, this does not look to be confirmed as of yet (TradeWinds also treated it as “under consideration”). Moving these vessels from methanol to LNG would be a significant sign of supply problems around methanol or some deeper issue that has not surfaced publically yet.
The European Maritime Safety Agency also produced notable reports on Hydrogen and biofuel applications. IEA’s update to their net zero by 2050 report series sees Ammonia, biofuels, and Hydrogen being used in the marine transport chain but almost no role for Methanol. NYK seems to be following a similar set of assumptions. Rystad Energy issued a press release promoting Ammonia as a better energy carrier for long-distance transport than Hydrogen, though prior academic studies have shown a more nuanced view.
Methanol
Ship Orders
DNV reported 12 and 14 methanol orders in September and October, the publically-announced orders I could find are listed below. Maersk’s first 16200 TEU methanol-containership was also floated out at HHI in Korea.
Airbus/LDA announced a plan for three aircraft-carrying ROROs, with 6 Flettner rotors and methanol propulsion - link
Elbdeich Reederei’s feeder vessels will be chartered in by Unifeeder. Unclear if this is new tonnage or an assignment of previously-announced tonnage.
SAFE Bulkers announced it acquired two under-construction 81,200 DWT methanol kamsarmaxes. The original owner is unclear. A study for future designs included Flettner rotors. Will such rotors be standard on bulk carriers in 5 years?
Diana Shipping announced two similar vessels at Tsuneishi Zhoushan.
Tsuneishi continued its run of methanol vessel success with four 5,900 TEU boxships for an undisclosed owner.
Kambara Kisen is ordering a new ~65k DWT methanol-capable bulker to be chartered by MOL. Again, a Tsuneishi vessel.
Skarv Shipping Solutions is ordering 4, with 2+2 options as well, 7000 DWT multi-purpose vessels. They will also be multi-propulsion capable, with both Methanol and Ammonia abilities (presumably not simultaneously), batteries, and fuel cell potential. Huanghai Shipbuilding in China is building the vessels.
CMA CGM has ordered 8 9200 TEU boxships with Methanol. It is not confirmed, but likely at Shanghai Waigaoqiao Shipbuilding.
A 31,000 cubic meter TSHD was ordered by Boskalis at Royal IHC. It is Methanol ready, reportedly including the bunker tanks.
Ship Conversions and Equipment
Maersk announced that Zhoushan Xinya would be the first yard to convert 11 boxships from HFO to Methanol. Cummins announced the start of a conversion project for their popular QSK60 high-speed engine series to Methanol. These engines will also be applied to existing Ocean Infinity OSVs. MAN announced that CMES’ newbuild PCTC will use its 7S60ME-LGIM for main propulsion, paired with MAN 21/31DF-M gensets.
SRC’s composite plate system SPS has also been granted a Lloyd’s AIP to replace cofferdams on methanol fuel tanks. This system, widely used for cold-work-only repairs in offshore applications, has a 25mm composite layer, typically between the existing structure and a new cover plate. The goal of using it on a methanol conversion is to avoid giving up tank volume for a large cofferdam, which is often required given Methanol’s lower flashpoint.
Supply Announcements
Maersk’s new green fuel supply offshoot, C2X, also made headlines. Their previously-annouced plan for green Methanol bunkering and potentially production in Suez has moved forward to a study phase (also see direct press release) . A possible $3 billion investment in the first phase may occur after the study. Maersk alone (at least not credited to C2X) also invests in green energy in this geographic area. C2X also secured a large production area in the Port of Huelva Service Area in Spain for green Methanol.
Off-grid Methanol producer ETFuels reported an undisclosed investment from the SWIFT 2 fund to help it build towards 1.4 million tons of e-Methanol by 2030. ETFuels website suggests they are looking for short-cycle CO2, which would imply either direct air capture (!) or a fast-growing crop/bio source for the CO2. OCI announced another 200,000 tons-per-annum (TPA) increase in Green Methanol at their Beaumont, Texas facility.
S&P Global Commodity Insights reported a target of 4.4 million TPA for green Methanol across SunGas Renewables, Carbon Sink, and WasteFuel. SunGas is reportedly looking at ~$9 billion in investment in this area. Sungas’ technology will also be used in the ABEL Energy North Tasmania project; the aim is to produce 300,000 TPA of green Methanol. Sungas is using woody biomass as a CO2 source in this process.
Other
MOL announced an exploratory agreement with Hy2gen in Germany, and China announced bunkering and quality standards for Methanol, along with a COSCO-based plan for a green methanol supply chain.
Ammonia
Ship Orders and Related
Lots to report here, though again it is not clear how many duel-fuel ships will ever be fully converted to Ammonia:
Naftomar Shipping and Trading Co ordered 4 93,000 cubic meter ammonia carriers that are also capable of running on Ammonia as a fuel.
Exmar announced 2 46,000 cubic meter ammonia carriers, also dual-fueled with Ammonia.
Grieg Star reported eight ammonia-capable short-sea shipping vessels, although it is not clear if these are new or a summary of existing orders.
Eastern Pacific Shipping reportedly has firmed up three more 210,000 DWT duel-fuel bulkers, with options for another four at CSSC Qingdao Beihai Shipbuilding. This order now could total up to 10 vessels.
CMB is following EPS at the same yard with very similar vessels.
Euronav has exercised an option for an ammonia-convertible VLCC. The ammonia tanks will not be installed at the time of build.
Viridis’ small ammonia bulk carrier project has received $14 million in public support for their initial order of 2 vessels, which is now expected by year’s end.
More firms are also conducting studies. The Seaspan/MMMCZCS 15,000 TEU containership (co-authored by my now-colleague Thomas McKenney) report was released. NYK Bulk and Project Carriers/CODELCO announced a joint venture into a handymax Ammonia fueled design to transport copper from Chile to Asia. ABS announced an AiP for an ammonia-capable gas turbine power system for an LNG carrier by Hanwha Power Systems. The system includes exhaust gas heat recovery using a supercritical CO2 cycle to derive power from the waste heat. Bourbon Horizon announced the beginning of a design effort for an ammonia-powered PSV using Amogy’s ammonia-to-power technology. Though unclear, it seems to be a fuel cell application, although Amogy’s approach could also make pilot H2 to help the combustion of Ammonia in an internal combustion engine.
Equipment Developments
The Wärtsilä 25 engine platform now has an ammonia option, making it the first four-stroke medium-speed engine available with this option. WinGD’s two-stroke Ammonia low-speed diesel won an AiP from LR and an agreement with South Korea’s KSS Line for exploring 52cm and 62cm bore engines for medium to large gas carriers. HHI reported on a 30-MW scale HVDC electrical propulsion system using SOFC powered by Ammonia. The plant is intended for VLCCs, with an estimated in-service date of 2028.
Ammonia cracking technology was very active during this period. Amogy, which develops onboard cracking of NH3 to H2 technology, announced a $40 million/53,000 square foot manufacturing facility expansion in Houston, with 200 new jobs as well. UK-based Sunborne Systems also reported a test of their cracker technology on a ~50kW scale ICE. Teco 2030 and Pherousa Green Shipping are moving forward with the design of a 12 MW fuel cell system for a handy-sized bulk carrier. The big question in this space is if such systems will be used primarily to make a small amount of Hydrogen to be used as pilot fuel in an Ammonia ICE, or if this technology will scale to replacing ICE with fuel cells. Efficiencies, other emissions (NOx and nitrous oxide to start), noise, and space/weight would all seem to impact this choice. It is not clear yet if one approach will win out or if both will be used in differing applications.
Supply Announcements
Yara has announced a pilot project for bunkering with Ammonia, including a 2025 in-service date. The Barents Blue/Polaris CCS bue ammonia announced a 100k-300k TPA offtake agreement for Germany, though it looks like it is mainly for industrial purposes. A further $6.75 billion investment in green energy/ammonia in the Suez Canal zone by China Energy was also announced, though few details were provided. In Houston, a 4-company consortium announced a pre-FEED study on a 1.1 million TPA ammonia plant. OCI announced a green hydrogen takeoff agreement from New Fortress Energy Inc.’s ZeroParks facility in Houston that could produce 160,000 TPA of green Ammonia.
In a new concept, ABS issued an AiP for a KRISO project looking at direct production of Ammonia on a floating platform powered by an adjacent wind farm. Shallow water regions in the roaring forties may become valuable real estate. Bunkering is also moving forward, with an announcement of new bunkering infrastructure by ITOCHU in both Spain and Suez.
Everything Else
Hydrogen
Hydrogen continues to show increasing levels of activity. ClassNK issued an AIP for a Hydrogen-powered 17.5K DWT bulk carrier, including a hydrogen-powered low-speed engine. MOL, NYK, K Line, and Kawasaki Heavy Industries announced a joint project to develop a 160,000 cubic meter liquid hydrogen carriers. CMB.TECH/DBR also announced dual-fuel H2 gensets for the workboat market, including a CSOV application currently being built at DAMEN. MAN announced a project for medium-speed hydrogen-powered engines. MSC confirmed ongoing plans for six cruise ships with the ability to use liquid Hydrogen in port to reduce in-port emissions. Viasea received Norwegian funding to explore short-sea vessels with both wind and hydrogen power. ABB announced that their fuel cells and DC Grid technology have been selected to power Sanskip’s 135m hydrogen coastal containerships currently under construction at Cochin Shipyard. Japan launched a hydrogen and bio-diesel passenger ferry, expected to enter service in 2024. SEA-KIT announced a development grant from the UK’s DfT for a hydrogen-powered USV for port surveying. The vessel will use Bramble Energy’s printed circuit board fuel cell technology, a component-reducing approach using PCBs to decrease the cost and production time for fuel cells. This should be an interesting vessel to keep an eye on.
Supply announcements on H2 are also expanding. In the US, the Department of Energy announced seven hydrogen hubs, to drive down the cost of Hydrogen while increasing its uptake. Green, blue, pink, and bio hydrogen are all mentioned in different hubs, though the marine ties are not explicit beyond west coast ports. Hyrasia One, the 40 GW proposed plant in Kazakhstan, established an export agreement via the Caspian Sea. A much smaller waste-to-hydrogen plant to supply ships in the Baltic was also announced. Deep Wind Offshore and Hy2Gen announced a partnership to explore off-grid wind-powered hydrogen production.
Nuclear, Wind, and Others
Core Power held two events, one in London and one in Washington D.C., exploring the role of nuclear power in an era of more expensive green fuels. Details are available on their past events page; there were certainly many big names in attendance. Nuclear likely looks much different than all the other green solutions, as the ship’s higher capital cost would potentially lead to higher speeds and larger vessels.
Wind has had a busy few months as well. Following Pyxis Ocean’s success in August, Berge Olympus has emerged with four BARTech WindWings, doubling the installation on Pyxis Ocean. Flettner rotors are also expanding. Vale’s Sohar Max, will be fitted with five from Anemoi Marine Technologies, while Airbus is proposing a ship with six rotors, as covered in the methanol section above. Dealfeng New Energy Technology reported two Flettner installations in China. Norsepower also announced a leasing approach to installing rotor sails to make retrofits more widely available. Yours truly appeared in a NPR article and radio show on wind power for ships. Given that most green fuels are expected to be 3-6 times as expensive as HFO, the market for wind power should continue to expand, even if fuel savings stay in the 5%-20% range.
Alma Clean Power and Odfjell announced a plan to test an 80 kW SOFC running on natural gas on a chemical carrier. Solvang announced a plan to purchase 5 LPG carriers capable of performing onboard carbon capture. The vessels are being built at Hyundai Heavy Industries; expected in-service dates are 2026-7.