Singapore Maritime Week 2022 Highlights Diverse & Action-Based Partnerships as Vital Step to Progress Shipping’s Decarbonization
Amongst SMW2022’s key focus on digitalization and decarbonization to progress towards sustainable shipping, on 6th April, TotalEnergies Marine Fuels signed an MOU with the Maritime and Port Authority of Singapore (MPA) and members of an existing ITOCHU-led consortium, with the goal to accelerate the joint development of an ammonia fuel supply chain in Singapore.
Jerome Leprince-Ringuet, Vice President Marine Fuels, TotalEnergies, shares his thoughts from this development and from a panel discussion at the ‘Accelerating Decarbonization Conference’, where he joined other industry leaders from Itochu Corporation, Maersk, CMA CGM, E1 Marine and moderated by the Global Centre for Maritime Decarbonization (GCMD), to debate the pathways and opportunities in shipowners’ decisions on the multi-fuel transition.
This year’s Singapore Maritime Week deep dives into various digitalization and decarbonization discussions that are pertinent in driving forward progress towards sustainable shipping.
On this occasion, we are delighted to welcome the Maritime and Port Authority of Singapore (MPA) into a consortium with TotalEnergies Marine Fuels, ITOCHU Corporation, ITOCHU Enex, MOL, Pavilion Energy and VOPAK Terminals today.
As part of a Memorandum of Understanding (MOU) signed among the 7 organizations this morning, the consortium seeks to establish an ammonia fuel supply chain, including an on-shore and/or off-shore facility and an ammonia bunkering ship in Singapore. This MOU is also a key element of an integrated project that includes the development of ammonia fuelled bulk carriers by Itochu with other partners.
This initiative represents an important milestone in advancing the potential for green ammonia to be used commercially as a marine fuel solution in a major port hub of the world. Together with Itochu’s announcement today on a Joint Study Framework for Ammonia Bunkering Safety with 16 companies and organizations, many of which are port authorities, the expansion of this joint ammonia study framework also demonstrates the high expectations and interest in the use of ammonia as a marine fuel.
Along with growing momentum and pressure to decarbonize shipping, there are certainly many outstanding questions waiting for everyone in the ecosystem to hurdle and to solve.
Supply of Green Hydrogen – the Key Building Block of Future Energies
Out of these challenges, the elephant in the room lies in the lack of low-carbon fuels – at scale – that is needed to decarbonize shipping. The commercial quantities required of these fuels will not be realized overnight and there is consensus that green hydrogen will be an important building block for many of the future fuel candidates. Consequently, the supply of green hydrogen will require significant amounts of renewable electricity and associated investments in renewables.
If we were to replace half of the current bunker demand with H2-based fuels (for example, e-methane, e-hydrogen, e-ammonia, e-methanol), based on my calculation, it may require around 1,000 GW of renewable electricity. That is a big amount but not a target that is out of reach; it is something we can achieve together as an industry. What is needed is a clear, global framework in terms of regulation and taxation to give visibility on the industry’s appetite for these future fuel solutions.
As part of TotalEnergies’ climate ambition to get to net-zero by 2050 together with society, the Company is committed to contribute to these investments in renewable power and has set a target to achieve 100 GW of gross installed capacity for renewable power by 2030.
Over Short & Long Term: How Shipowners can Approach their Fuel Strategies
I see today two pillars to most shipping companies’ strategies; one pillar is a short-term one where you start with the alternative fuels that are available now. One of them is marine LNG, which is commercially available today, for which there is an ongoing shift in the shipping industry to adopt this cleaner fuel choice.
Biofuels also present a drop-in alternative for current vessels without significant technological modifications required for bunkering and will help shipping players comply with 2023’s incoming IMO emissions regulations. We are proud to have recently worked with Anglo American and NYK Line to deliver our first marine biofuel bunker stem in Singapore as part of a biofuel trial, and are continuing to develop our capabilities to provide a sustainable, cost-efficient and low-carbon biofuel solution dedicated to shipping.
The most important part is of course, the mid- to long-term strategies. In my view, having a dual-fuelled vessel provides shipowners with a natural hedge and agility in the market in the absence of visibility over the availability of future, low-carbon fuels. In the end, whichever long-term pathway a shipowner takes, having in-depth discussions with energy suppliers on securing long-term supplies of these solutions would be critical.
Outlook of Shipping’s Energy Mix in 2030 & 2050
The outlook of how the shipping industry can transition to clean and lower-carbon fuels needs to be better understood with the technology maturity level and adoption timelines of the different alternative fuels.
For us, we anticipate that the market’s scaling up of hydrogen-based fuels is likely to materialize between 2030-2040 in line with the ramp up of electrolysis to commercial levels. It isn’t as simple as an overnight switch to a new technology as some would have you believe. Just look at the drive of the transition pathway the automotive sector has experienced and is heading towards.
We believe LNG has an important role, along with bioenergies and hydrogen-based fuels, in shipping’s energy transition. The adoption of marine LNG as a ‘here and now’ solution is expected to continue to experience an accelerated growth into 2030.
Biofuels have a role in ‘greening’ conventional fuels, and the shipping industry will see the practical development and deployment of a variety of bioenergies and hydrogen-based fuels, including e-Methanol, e-Methane (synthetic LNG), e-Ammonia and e-Hydrogen.
As always, with any new technology or product, the application of anything ‘new’ will centre on first-mover initiatives and pilot trials, which we expect to see many such projects happening in this decade (2020-2030) and are designed to demonstrate the capability of new vessels in using new fuels.
Importantly, I think low-carbon fuels need not only be green, which is known as the cleanest option given its production from renewable energy sources. Blue hydrogen can also contribute to a carbon-neutral shipping future, by capturing and storing carbon emissions during its production process with the help of carbon capture, utilisation and storage (CCUS) solutions.
Borderless Collaboration
Ultimately, these 3 aspects that I have touched on – ramping up the production of green hydrogen, designing shipowners’ decarbonisation strategies and the expanding shipping energy mix, rest on the ability of the shipping industry to mobilize as many stakeholders as possible to bring the necessary solutions up to scale.
I look forward to participate in this golden age of borderless collaboration that will bring our dreams of a carbon-free shipping future into reality!