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The International Bunker Industry Association (IBIA) has said that it will continue to lobby regulators to set 'achievable' ship fuel sulphur targets.

Speaking yesterday (September 10, 2013) at the association's seminar 'Asian Growth: Global Recovery? How should London respond to the challenge?' at the Baltic Exchange during London International Shipping Week, former IBIA chairman Nigel Draffin outlined the key issues facing the bunkering sector.

Noting that shipowners need to cope with the impact of European and North American Emission Control Areas from 2015 and the European adoption of a 0.5% sulphur limit from 2020, Nigel Draffin gave an overview of the alternatives to heavy fuel oil available to the industry.

Looking at how the shipping industry is reacting to environmental legislative changes, Draffin said: "Buyers will take the least cost route and suppliers will only respond to demand. Port authorities will look for competitive advantage whilst laboratories and surveyors will have to learn new skills. IBIA will continue to lobby and persuade regulators to set achievable targets and give us flexibility in how we meet those targets."

According to IBIA, bunker fuel growth looks set to grow at about 1.5% per annum as China, Hong Kong and other Asian countries continue their growth in marine fuel sales. Whilst Singapore remains dominant in the supply of bunkers, other Asian countries are eating into its market share. However, bunker quality remains a big issue as suppliers look to reduce costs.

Draffin predicted that all bunker growth will be in Asia, the Middle East and Africa whilst sales in the Mediterranean, Europe and South America will be flat and North America will shrink. London and the UK have seen a drop in the number of bunker brokers based there, but the former IBIA chairman noted that the city "remains the powerhouse of international shipping commerce, with an unrivalled core of technical, legal and commercial shipping expertise."

The sell-out seminar was attended by 80 shipowners and bunker industry professionals.

In an emailed statement issued today, IBIA provided an overview of the alternatives to heavy fuel oil available to the shipping industry, which has been provided below.

Distillates

A switch to distillate will require 250-300m tonnes of distillate to be available. Up to 40% could come from refinery upgrades, whilst the remainder from increased crude refining. The additional crude would cause oversupply of other products, whilst the energy cost of refi ning would significantly increase CO2 emissions. The 0.5% S limit could be met by blending low grade low sulphur heavy distillate with mow sulphur residual fuel.

Gas to liquids

This process allows conversion from methane to gas oil using cobalt catalysts to convert the gas to heavy gas oil and naphtha. Shell (Malaysia, Qatar) and SASOL (South Africa) have plants in use now. Chevron and SASOL have a plant almost complete in Nigeria.

Methane

Methane is a readily available fuel which can be used in "gas" engines and dual fuel diesel engines. It is clean and needs almost no pre treatment. It is also a potential fuel for fuel cells. However it does have a low flash point, there are significant storage issue which have led to difficulties with supply logistics. Methane is stored as liquified gas (LNG) at 162 deg C and needs to be reheated before use, in boilers or in modified diesel engines. The fuel is already bei ng used by LNG tankers and now in ferries, coasters and naval vessels. Vessels are already being ordered with container line operator UASC recently announcing an order of 10 to 17 “LNG ready” ships.

Compressed Natural Gas (CNG) is stored as compressed gas at a pressure of 250 bar and can be used in the same engines as LNG. It is already in use in some small ferries.

Basic Biofuels

Basic biodiesel (FAME) is sold as 2%, 5%, 7%, 20% bio with hydrocarbon diesel as well as 100% biodiesel. The fuel currently has problems with thermal oxidisation, reaction to water and its reaction to some rubber seals. It is not a hydrocarbon so does not meet current ISO 8217 standards but ISO is working to develop a new marine bio fuel standard. There is a suggestion that adopting the European road diesel limit of 7% bio in a specific marine distillate grade as an option might find acceptance.

New Biofuels

Ethanol from plant cellulose is an alternative but it does have flash point issues which may be resolved with the next iteration of the IGF code. Algae can be cultivated to produce a bio diesel and ethanol. Myco fuels are fuels produced from fungus.

All of the above are “carbon neutral” (except for their manufacture) and do not compete with food production. Algal fuels and Myco fuels are still a long way ahead, but we may not need conventional fuels when they are finally ready.

Fuel cells

Fuel cells convert fuel directly to electricity and units of up to 320 kW are now in service. This technology is a likely contender for in port on board electrical supply.

Hydrogen

Hydrogen has very low emissions and can be used in ordinary gasoline type engines. It needs a pilot ignition in diesel engines (just like methane). In order to produce hydrogen, energy is needed. Hydrogen offers a p otential fuel source for fuel cells.