Ship insurers concerned about safety of new fuels
More regulations in the shipping industry are required to ensure the safe use of new fuel types, such as ammonia and hydrogen, says the International Union of Marine Insurance (IUMI).
"We need International Maritime Organization (IMO) regulation and [ship classification society] rules on the implementation and use of these new fuels," said IUMI today."This will ensure the safety of the crew and enable marine underwriters to assess and offer necessary financial protection for this new risk profile."
The global shipping fleet's uptake of alternative fuel has been minimal so far, but the share is set to increase as the IMO aims to reduce carbon emissions by 40pc by 2030 and by 70pc by 2050 from a 2008 baseline. About 12pc of the vessels on order at shipyards will be equipped to burn alternative fuel, compared with less than 1pc of the 110,700 vessels that are over 100 gross tons on the water currently, according to data from ship classification society DNV.
Ships capable of burning LNG comprise the majority of the alternative fuel ships on order, followed by those that will have the option to run on battery, LPG, methanol, hydrogen, and ammonia, in that order, according to DNV.
Ammonia is both toxic and corrosive, and hydrogen has a wide flammability range and ignites easily, said IUMI. But because of their potential for carbon-neutrality and wide availability, both fuel types are leading candidates to help the shipping industry meet the IMO's carbon emissions reduction.
"As these new fuel types are largely untested, the insurance industry has no history or loss records to help it assess the potential risks involved," said IUMI. "We need to learn about these new fuels and educate our clients accordingly."
The IUMI pointed out that shipping associations, including the International Chamber of Shipping and Intercargo, have proposed to develop guidelines for safety of newly built vessels using ammonia as fuel, but that more work needs to be done in this area.
"Whilst we welcome the proposed safety guidelines as a useful starting point, they are non-mandatory and so can only be an interim measure. We urgently need mandatory requirements to be developed and implemented to facilitate the transition to greener fuels," said IUMI.
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