Consortium Commits $18M for Green Marine Fuel Supply Chain

The Global Center for Maritime Decarbonization is leading a consortium of 18 industry partners to launch a biofuels pilot project with a combined contribution of $18 million in cash and in-kind to establish an assurance framework to ensure the integrity of the supply chain of current and future green marine fuel products, bringing real benefits to end users and the climate.

At the launch of this pilot project, Professor Lynn Loo, CEO of GCMD, said: “GCMD is leading this route-based pilot project to help align supply chain stakeholders for biofuels adoption. By facilitating and creating an optimized supply chain for green fuels, this pilot project will help shape national and international biofuel bunkering standards and reduce barriers to their wider adoption to reduce greenhouse gas emissions. greenhouse (GHG) from a life cycle perspective. By organizing and executing this biofuels pilot project, the first of its kind, GCMD is able to meaningfully solve stakeholder issues in the complexity of the green marine fuels supply chain.

Bridging the Gap for the Marine Industry

To meet the International Maritime Organization‘s 2030 and 2050 decarbonization targets, shipowners as well as shipowners and charterers are exploring the purchase and use of green fuels. Biofuels can be a short-term measure to reduce GHG emissions as they are available today, and they can be deployed in the same way as marine fuels with minimal changes to existing distribution infrastructure, on-board technologies and ship operational standards. However, there is no industry-wide assurance framework that addresses concerns about the quantity, quality, and GHG emission reductions of biofuels, nor that preserves their premium and value. To address this gap, the pilot project led by GCMD aims to establish an assurance framework that guarantees transparency in the supply chain of alternative biofuels, the applicability of which can be extended to future alternative fuels, such as bio-LNG, bio-methanol and green fuels. ammonia, when they become available in significant quantities.

Recent IMO decisions to eliminate the need to apply for exemptions for the use of fuel blends containing up to 30% biofuels (B30) for propulsion and to allow the use of B30 in accordance with the Annex VI of MARPOL have lowered regulatory barriers to the adoption of biofuels. To this end, the assurance framework that will be the result of this pilot project will increase stakeholder confidence in the total value of the premium paid for these green fuels and further lower the barrier to wider adoption of biofuels in the industry. shipping industry by addressing concerns about the integrity of the biofuel supply chain.

The vessels in this pilot project are all equipped with two-stroke engines from MAN ES. In response to his participation in this pilot, Bjarne Foldager, Senior Vice President and Head of Two Stroke Business, said, “This is a very important initiative by GCMD, and we are honored to be part of it. At MAN Energy Solutions, we believe that several solutions are needed to decarbonize shipping, but all solutions must be verified and tested for scalability. This is best done in partnerships aligning different actors in projects like this where we can share knowledge and develop transition strategies together. »

Support the framework of green corridors

GCMD is taking a bottom-up approach by convening like-minded partners across the maritime industry to participate in this pilot project. In total, the shipowners, charterers and operators participating in this pilot project represent around 2,300 vessels in the container, tanker and bulk carrier segments, and are responsible for transporting 8.4 million TEUs or 80, 6 million dwt worldwide. With 12 vessels calling at three ports on three continents, lessons learned from these route-based pilots will support the Green Corridors Framework that was presented by the Clydebank Declaration at COP26 in October 2021, to which 24 states are signatories. , including Singapore and the Netherlands. and the United States where the bunker ports reside for this pilot project.

Targeting the Complex Green Fuels Supply Chain

The first of its kind in terms of scope and complexity, the pilot project aims to optimize the entire bunker fuel supply chain based on lessons learned from on-board trials involving biofuels. Designed through the lens of the shipowner, piloting will begin with fuel blends involving existing biofuels, such as hydrotreated vegetable oil (HVO) and fatty acid methyl esters (FAME) blended with fuel oil Very Low Sulfur Fuel (VLSFO), High Sulfur Fuel (HSFO) or Marine Gas Oil (MGO) in blends containing up to 30% biofuels (B30).

“There are so many good elements in this pilot project,” commented Unni Einemo, director of the International Bunker Industry Association. “A variety of biofuels and biofuel blends have already been successfully tested, but this comprehensive pilot project can help resolve remaining uncertainties about how these fuels perform in practice by gaining in-depth operational experience from end users with products involving FAME and HVO, and hopefully also crude algae oil.”

Using BunkerTrace’s digital and synthetic DNA tracing products to track marine fuels from production to vessel propulsion, the pilot will validate the authenticity of sustainable biofuels through molecular verification tests performed on fuel samples which are collected at many identified points along the supply chain. Therefore, the pilot project will address the traceability of instant biofuels from production, distribution, transport, storage and bunkering to application on board ships, providing end-to-end transparency of the supply chain. supply.

Einemo continued, “The tracking element of this pilot is also very exciting. Biofuels have the potential to help the existing fleet meet IMO GHG reduction targets taking into account lifecycle emissions, but one of the challenges will be certification of product origin as the Sustainability of biofuels can vary greatly depending on production routes. Biofuels can be mixtures from feedstocks with different sustainability profiles, so it will be interesting to see if DNA tracing will show mostly single-origin products or biofuels from multiple origins. This could give us some really useful insights into the complexities of documenting the entire fuel supply chain, which will become increasingly important.

Testing laboratories will play a crucial role in the evaluation of biofuels and biofuel blends. Strategically located in Singapore, the world’s largest bunker hub and second largest container port, GCMD also participates in the work of the Chemical Standards Committee (CSC) of the Standards Council of Singapore in developing national standards for bunkering. bunkering industry. Commenting on this GCMD pilot, Captain Rahul Choudhuri, Chairman of the CSC Technical Committee for Refueling (Liquid Ambient Fuels), said, “The scope of the GCMD project involves detailed assessment of the quality of biofuels, including verification of their shelf life and long-term stability. Thus, the participation of global laboratory services companies in this project will provide information that will enhance the efforts of the Technical Committee Working Group on Marine Fuel Specifications and contribute to the development of acceptable industry standards and practices for the use of biofuels in Singapore and possibly elsewhere.”

The complexity of the pilot is added to the coordination of the sailing schedules of the participating ships. Aggregating the demand for biofuels in ports will result in cost savings for shipowners and fuel purchases through optimized use of shoreside storage facilities and bunker vessels and will facilitate assessments of fuel reduction. GHG emissions on a well to wake basis from individual vessels and across fleets. Additionally, testing these fuel blends on the container, tanker and bulk carrier segments traveling on fixed routes and tramp and bunker in the ports of Singapore, Rotterdam and Houston under normal conditions will demonstrate the compatibility and stability of these biofuels under real conditions. operating environments, thereby enhancing the overall robustness of the assurance framework.

Call for raw algal oil supply

To further accelerate the adoption of biofuels as a near-term measure to reduce GHG emissions, GCMD will leverage this project to be the first to test and evaluate the use of crude algal oil (CAO ) as marine fuel. CAO is a third-generation biofuel that promises a significantly reduced carbon footprint, but unlike HVO and FAME, its usefulness has not been tested nor its supply chain established. For this part of the pilot, GCMD has assembled fuel buyers who have committed to testing CAD and is inviting CAD producers with existing commercial production capabilities to participate by contacting [email protected] before August 22. GCMD will connect CAD fuel producers with pre-identified fuel suppliers to test and supply CAD for this pilot on a commercial basis.

In preparation for the launch of this pilot project, GCMD is finalizing the details of the agreement with the 18 project partners. The pilot project will start on August 1, 2022 and is expected to last 12 to 18 months. A list of GCMD partners for this project can be found in Annex A.