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Singapore's MPA, IEA unite on maritime decarbonisation

  • Market: Biofuels, Fertilizers, Oil products, Petrochemicals
  • 17/04/24

The Maritime and Port Authority of Singapore (MPA) and the IEA have signed an initial deal to push the transition to zero and near zero emission fuels, while working on technology as well as digitalisation to meet the maritime decarbonisation agenda.

The agreement, signed by MPA chief executive Teo Eng Dih and IEA executive director Faith Birol, was announced at the Singapore Maritime Week 2024 (SMW) this week.

"Greater international collaboration in maritime and energy industries is critical for international shipping to meet international decarbonisation goals," Teo said.

"Shipping is one of the hardest sectors to decarbonise and we need to spur development and deployment of new technologies to slow and then reverse the rise in its emissions," said IEA chief economist Tim Gould. "This will require strong collaboration at a national and international level."

Training programmes will be built to support the adoption of new fuels. There will also be partnerships made towards fuel-related projects and initiatives such as the International Maritime Organisation-Singapore NextGen project.

The IEA plans to open its first regional co-operation centre in Singapore, which will be its first regional office outside of its headquarters in Paris, France.


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Q&A: Low-carbon marine options to grow: Baseblue


11/11/24
News
11/11/24

Q&A: Low-carbon marine options to grow: Baseblue

New York, 11 November (Argus) — With marine fuel greenhouse gas emissions regulations tightening, ship owners are looking for financially feasible low-carbon fuels to add to their marine fuel repertoire. Argus spoke with Dionysis Diamantopoulos , head of alternative fuels at bunker supplier and trading firm Baseblue, about ship owners' options. Edited highlights follow. Do you expect onboard CO 2 capture and storage technology to become more important in the next five years? The big question for carbon capture technology is the storage capacity for the seized CO2. For example, if an available technology only allows 200t of CO2 to be captured on a voyage for the full capacity of CO2 tanks, then if we take into account that 1t of fuel produces on a tank-to-wake assessment context 3.2t of CO2, this means that after burning 62.5t of fuel oil/gasoil on the vessel that would fill the entirety of the storage capacity of the carbon capture equipment. Considering that this consumption could be a 2-3 day sail for some vessels running on 30-plus day voyages, the proportion of time "online" and "offline" of this technology would be inefficient. In addition, questions over the development of carbon capture technology is dependent on the availability of infrastructure worldwide to collect the captured CO2. If a vessel calls at, say, Brazil and then west Africa, and has a full carbon capture tank from the second day of the voyage and cannot discharge the captured CO2 at a west African port, we have further "offline" time of the capture technology. Other questions could include the space on deck/holds and further design considerations for the carbon capture technology. In 2030 what do you expect the global marine fuel mix to look like? In the immediate future, conventional fuel will remain the front runner, followed by biofuels due to the ability of existing fleets/engines to burn them. LNG usage could also increase if orders/deliveries of new building dual-fueled vessels increase. The IEA's director, Mr Birol, said recently that he expects LNG prices to drop due to the inflow of cargoes of LNG from the US and Qatar in the upcoming year. In the years to come, we will also see more methanol dual-fueled vessels on the water, and different areas worldwide will surely develop to supply these vessels with sustainable methanol types. Ammonia will eventually join the mix after infrastructure developments and protocols have been set for the safety of bunkering procedures. Do you think that next year's FuelEU regulation will be sufficient to encourage the move to sustainable marine fuels? The reality is that we must start somewhere, and FuelEU is a solid driving factor in pushing our industry to begin incorporating alternative fuels in the energy mix. It is vital that FuelEU and EU ETS is incorporated gradually into shipping. A charge to completely eradicate emissions within the next year or so would not be reasonable, viable or achievable. This phase-in period also assists in avoiding stranded assets and global trade disruptions. To comply with FuelEU, shipowners must know each alternative marine fuel's well-to-wake (full lifecycle) greenhouse gas emissions scores, but there is a lot of confusion around these. What well-to-wake emissions would you say each fuel has? It is not a question of my own or others opinion; it is rather what can be proven with the relevant documentation, for example, from the proof of sustainability documentation that ISCC-certified suppliers can publish. This also showcases why having a proper paper trail and documentation that officially accompanies the supplies is important. If we are talking about the default values, they would be: B100 16.37 gCO2eq/MJ; B30 MGO 70.18 gCO2eq/MJ; B30 VLSFO 71.73 gCO2eq/MJ. Fossil LNG are default values based on the type of engine. For LNG Diesel DF, it is 76.13 gCO2eq/MJ. We have not yet delivered bio-LNG or bio-methanol, so we are unsure of the GHG savings. China is lagging behind Singapore in terms of biodiesel bunker (B24) sales. Do you expect Chinese biodiesel bunker demand to pick up next year? Singapore is the king of bunkering in the region and ranks as one of the largest global bunkering hubs/ports. But Hong Kong's biofuel supplies, namely B24 VLSFO, have started and have picked up. Specifically, we at Baseblue already have recurring customers who lift biofuel blends in Hong Kong. Is conventional bunker trading this year more or less competitive than last year? Conventional bunker trading this year is more competitive compared to previous years. In my opinion, this has to do with various factors. First, crude oil prices have been under pressure. Whenever prices are under pressure, smaller trading houses try to take advantage of the fewer financing needs and appear more competitive. Next, bunker trading companies have sprouted exponentially over the last few years, which is enough to increase competition. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Cop: Finance deal remains on the cards, despite Trump


11/11/24
News
11/11/24

Cop: Finance deal remains on the cards, despite Trump

Edinburgh, 11 November (Argus) — Donald Trump's victory in the US election could influence the tone of discussions at the UN Cop 29 climate talks that get under way in Baku, Azerbaijan, today. But world leaders can still agree on a new finance goal for developing countries that has the potential to shape the energy transition for years to come. Parties to the Paris deal this year need to decide on a new finance goal for developing nations — funded by developed nations — 15 years after the current $100bn/yr target was agreed. But negotiations could be "severely undermined" by Trump's victory, according to non-profit IISD's policy adviser, Natalie Jones. Trump pulled the US out of the Paris accords during his previous term in office and has said he will do so again. His election is "a blow in the fight against the climate crisis", admits France's former climate change envoy, Laurence Tubiana, although he insists that "a positive outcome is possible". Unlike in 2016, at Cop 22 in Marrakesh, Morocco, when the election of Trump came as a shock, parties have had time to plan, many observers noted. And the US could still play a role, while other countries take the lead. Developed and developing nations have grasped the urgency of agreeing on a new goal, observers say. "All parties have an interest in reaching an outcome," non-profit World Resources Institute director of international climate action David Waskow says. Technical talks earlier this year failed to progress on key issues, including the amount of finance to be provided and who will contribute. Developing countries called for a floor of at least $1 trillion/yr, but developed countries have yet to put a number forward. The idea of a layered goal with a public finance core gathered support at ministerial meetings last month. China, in June, refused to be drawn into discussions to broaden the contributor base. In October, it reiterated that the goal is an obligation for developed countries, but said other countries can provide support voluntarily, as stipulated in the Paris agreement. Baku is a pivotal summit since new finance will help support more ambitious climate plans in developing countries, which are to be submitted by 2025. And Cop 30 host Brazil could emerge as a broker to pave the way for a successful gathering next year. Brazil is also heading the G20 this year, with finance for developing nations and the reform of multilateral development banks a priority. All about the money In 2021, the IEA projected that emerging and developing economies' emissions would grow by 5 gigatonnes over the next two decades under current policies. "The NCQG [new collective quantified goal] will be a key enabler of the energy transition," civil society organisation Oil Change International's global policy lead, Romain Ioualalen, says, adding that commitments in Dubai last year — including transitioning away from fossil fuels — will not materialise without a finance deal. Also key for Cop 29 will be whether parties can agree rules to unlock carbon markets under article 6 of the Paris accord. There has been progress this year — including the article 6.4 supervisory body adopting standards on methodologies and greenhouse gas removal — even though discussions are moving too slowly. In Baku, the focus will largely remain on environmental integrity, double counting and the role of registries, with US and EU views differing here. And for article 6 talks, too, there is a risk that Trump's victory could slow the pace of progress, although International Emissions Trading Association president Dirk Forrister says he hopes that the Biden administration's negotiators will use what is left of their time "wisely" to advance work on carbon markets. "Progress this year on article 6 can help unleash more private investment to help countries strive for stronger NDCs," he said. By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Carbon intensity reg pivotal to biobunkers in 2025


08/11/24
News
08/11/24

Carbon intensity reg pivotal to biobunkers in 2025

New York, 8 November (Argus) — The International Maritime Organization's (IMO) carbon intensity indicator (CII) regulation will propel biofuel bunker demand in 2025 as its restrictions tighten. The CII regulation came into force in January 2023 and thus far has had a muted effect on shipowners' biofuel bunker demand. But 2025 could be a pivotal year. CII requires vessels over 5,000 gross tonnes (gt) to report their carbon intensity, which is then scored from A to E. A and B vessel scores are regarded as superior energy efficiency, while C, D and E are considered moderate to inferior scores. The scoring levels are lowered yearly by about 2pc, so a vessel with no change in CII could drop from from C to D in one year. If a vessel receives a D score three years in a row or E score the previous year, the vessel owner must submit a corrective action plan. The IMO has not established penalties or restrictions for vessels scoring D. Thus, theoretically a ship owner could have scored D in 2023 and 2024 with no consequences. Year 2025 will mark CII's third year, when ship owners whose vessels were scoring D in 2023 and 2024 will need to rethink their sustainability approach or risk getting D again and having to produce corrective actions plans in 2026. That is in addition to the ship owners whose vessels will score E in 2024. To improve its CII score, a ship owner could reduce its speed and burn low-carbon fuels, among other solutions. Biofuel is the only plug-and-play low-carbon fuel option that does not require a costly vessel retrofitting. in 2023 of the vessels 5,000 gt and over, 3,931 scored D, 1,541 scored E and 3,967 did not report scores, according to the latest IMO data ( see chart ). Assuming that the non-responders refrained from reporting to avoid sharing their low D and E scores, then the total number of D and E scoring vessels could be as high as 9,439, or 33pc of the total vessel count. The bulk of the vessels reporting D and E were dry bulk carriers at 1,853 and 641, respectively, followed by oil tankers at 743 and 349, respectively, according to IMO data. The dry bulk carrier category also had the highest number of non-responders at 1,015 vessels. The vessel classification society American Bureau of Shipping concluded that a reference case container vessel with 154,000t deadweight could see its rating improve from D to C in 2025 if it switched from burning conventional marine fuel to B25 biofuel. FuelEU, EU ETS: All bark, no bite Separately from the CII regulation, ship owners traveling in, out and within EU territorial waters will see the implementation of a new FuelEU marine regulation on 1 January and the tightening of the existing EU ETS regulation. But neither would be major driving forces behind biofuel for bunkering demand in 2025. The EU ETS will require that vessel operators pay for 70pc of their CO2 emissions next year. But even with the added cost of CO2, a B30 biofuel blend is more expensive than conventional marine fuel. In Rotterdam in October, B30 — comprised of 30pc used cooking oil methyl ester (Ucome) and 70pc very low-sulphur fuel oil (VLSFO) — with a 70pc CO2 cost added would have averaged $924/t, compared with VLSFO with added 70pc CO2 cost at $682/t, according to Argus data. In order for the EU ETS to entice ship owners to burn biofuels, at current VLSFO and Ucome prices, the price of CO2 has to rise up to $300/t. And CO2 has fluctuated from $55-$102.5/t from January 2023 to October 2024. Starting on 1 January 2025, the EU's FuelEU regulation will require that vessel fleets' lifecycle greenhouse gas intensity is capped at 89.34 grams of CO2-equivalent per megajoule (gCO2e/MJ) through 2029. For vessels which do not meet this cap, a low biofuel blend can meet the requirement. A B5 blend, comprised of 5pc Ucome and 95pc VLSFO, emits less than 89 gCO2/MJ. At this rate, albeit higher, demand for biofuels would not spike dramatically. Unlike the CII scores which apply to individual vessels, FuelEU applies to vessel pools. Different shipping companies are allowed to pool their vessels together to share compliance and meet the EU ETS emissions limits. Thus several biofuel or LNG burning vessels can compensate for the emissions generated by the majority of the older, less fuel efficient vessels burning conventional marine fuel in the pool. By Stefka Wechsler CII vessels rating Number of vessels (5,000 GT and over) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Canada climate plans not equally at risk post-Trudeau


08/11/24
News
08/11/24

Canada climate plans not equally at risk post-Trudeau

Toronto, 8 November (Argus) — Canada's climate policies will be overhauled if prime minister Justin Trudeau loses an upcoming federal election, but the Conservative Party might not move to roll back all of the programs. Trudeau over nine years in office has pushed through a raft of carbon pricing policies, cracked down on provinces with insufficiently ambitious plans, and even started a global "challenge" to spur more jurisdictions to price emissions. But Canada's policies have exacerbated cost-of-living concerns at a time when voters across the world are punishing incumbents for inflation, and Conservative leader Pierre Poilievre has barnstormed the country with a pledge to "axe the tax." An election must happen no later than October 2025, and the ruling Liberals are down significantly in polls. "We are going to see change, significant change," said Lisa DeMarco, a senior partner at the law firm Resilient and a member of the International Emissions Trading Association board at the Canada Clean Fuels and Carbon Markets Summit in Toronto, Ontario, this week. What "axe the tax" might mean in practice is uncertain. Inevitable targets are the country's federal fuel charge, currently at C$80/t ($57.54/t) and set to gradually increase to C$170/t in 2030, and a recently proposed greenhouse gas emissions cap-and-trade program for upstream oil and gas producers. But other policies, especially those with industry support, could remain. The country's distinct system for taxing industrial emissions, which includes a federal output-based pricing system that functions as a performance standard, "will likely be untouched," said former Conservative leader Erin O'Toole. A point of debate at the conference was what Poilievre might do with the country's clean fuel regulations, which function similarly to California's long-running low-carbon fuel standard and have boosted biofuel usage in the country. The policy is "certainly not at the top of the list" of Conservative priorities, said Andy Brosnan, president of low-carbon fuels at environmental products marketer Anew Climate. But that does not mean it will escape scrutiny. Conservatives could tinker with the program or push through more muscular changes like excluding electric vehicles, said David Beaudoin, chief executive of the climate consultancy NEL-i. "We should expect that regulation will be maybe not dismantled but somehow changed, perhaps fundamentally," Beaudoin said. In the gap left by the federal government, provinces could make up the difference with their own climate programs, panelists agreed. Quebec for instance has a linked carbon market with California, and British Columbia has its own low-carbon fuel standard. But policymakers should heed the lessons of Trudeau's declining popularity and reorient how they approach climate policy, O'Toole argued. "Try to be minimally disruptive on economically vulnerable citizens," he said. "Try not to pit industry against industry or region of the country against region." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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