The Week in Alternative Fuels

Here are some of the key developments in alternative bunker fuels from the past week.

PHOTO: Prototype of an ammonia-powered oil tanker. Breeze Ship Design

Danish shipping giant Maersk will buy 30,000 mt of green methanol annually from green fuel firm WasteFuel for its 12 methanol-powered ships which will be in operation by 2024.

Maersk has now entered into a strategic partnerships with six methanol suppliers and intends to source at least 730,000 mt annually by the end of 2025. The six companies are European Energy, CIMC ENRIC, Green Technology Bank, Orsted, Proman and WasteFuel.

German energy firm Uniper has revived its plans to set up an LNG terminal in Wilhelmshaven, Germany to support the country’s move away from Russian gas in response to Russia's invasion of Ukraine. Uniper’s peer RWE is also fast-tracking construction of an LNG terminal in Brunsbüttel.

Spanish energy firm Repsol is building a biofuels plant at its Cartagena refinery and expects to supply 250,000 mt for blending into marine fuel and other transport fuels per year.

Norwegian oil firm Equinor and has teamed up with ship designer Breeze Ship Design and other partners to develop an ammonia-fuelled aframax tanker with state support.

The UK’s Department for Transport has set up a unit dedicated to developing green shipping technologies such as hydrogen, electric and ammonia to be funded with £206 million ($270 million).

Here are the top five stories in alternative fuels this week:

Maersk to source green methanol from WasteFuel

Danish container shipping company A.P. Moller-Maersk will buy 30,000 mt of green methanol annually from California-based green fuel firm WasteFuel. The company intends to start using the fuel across its methanol-powered fleet from 2024.

WasteFuel converts municipal and agricultural waste into low carbon fuels, renewable gas and green methanol. The green methanol will be initially produced from the conversion of municipal waste in South America by 2024.

Using green methanol as a marine fuel can reduce carbon emissions by 95% and cut nitrogen oxide emissions up to 80% compared to conventional fuels. It can also eliminate sulphur oxide and particulate matter emissions, claims WasteFuel.

“Green methanol is the only market-ready sustainable fuel available today for shipping and production must be accelerated through collaboration across the ecosystem and around the world,” says Maersk’s Fleet and Strategic Brands chief Henriette Hallberg Thygesen.

Maersk has placed order of 12 methanol powered ships and plans to deploy them by 2024. The company aims to be net zero by 2040.

Uniper revives plans for LNG terminal in Wilhelmshaven to support Germany’s move away from Russian gas

This is the second plan to speed up construction of an LNG terminal announced by German companies this week, underlining the country’s move to diversify and secure gas supplies from other sources than Russia.

Uniper has not presented a timeline for when it expects the LNG terminal in Wilhelmshaven to be up and running, but there is an impetus from the German government to lessen reliance on piped gas imports from Russia as quickly as possible in response to outcries over Russia's war in Ukraine.

Germany imported nearly 90 billion cbm of natural gas in 2021, of which 55% came from Russia, says Uniper.

A previous plan for an LNG terminal in Wilhelmshaven fizzled out in 2020 owing to lack of demand for imported LNG cargoes, Uniper said. The company then pivoted to announce plans for a green ammonia import terminal instead last year.

In immediate response to Russia's invasion, Germany cancelled the Nord Stream 2 gas pipeline project with Russia in February. Uniper was heavily financially exposed to the project and said this week it will write down loans totalling €987 million ($1.09 million), including interest worth €292 million ($322 million), towards Nord Stream 2.

Uniper, together with German peer Wintershall, UK’s Shell, Austria’s OMV, and France’s Engie sponsored 49% of the Nord Stream 2 gas pipeline. Russia’s Gazprom owned a 51% stake in Nord Stream 2.

Uniper is also in the process of selling its Russian subsidiary Unipro, and said it will not make any new investments in Russia.

On Monday, German lender KfW, Dutch energy infrastructure company Gasunie and German utility company RWE said they seek to fast-track construction of a planned 8 billion cbm capacity regasification LNG terminal in Brunsbüttel.

“Here, we need to reduce our dependence on imports from Russia as quickly as possible; Russia’s war of aggression against Ukraine is now making this imperative,” said Germany’s minister for economic affairs and climate action Robert Habeck.

Repsol targets maritime demand with biofuels plant

Spanish energy firm Repsol is building a biofuels plant at its Cartagena refinery and expects to supply 250,000 mt per year.

Repsol will produce biofuels from agri-fuel wastes and used cooking oils with an eye on hard-to-abate transport sectors like the maritime industry and aviation.

Biofuels can cut net carbon dioxide emissions by 65-85% in comparison to traditional fuels, says Repsol.

Equinor aims to charter ammonia-fuelled tanker

Norwegian oil firm Equinor is working with ship designer Breeze Ship Design and other partners to develop an ammonia-fuelled aframax tanker with state support.

Breeze Ship Design will work to integrate ammonia engines, fuel and bunkering systems into the design of the 110,000 dwt tanker for a pilot project.

The project will culminate in an ammonia-powered oil tanker to be operated by Equinor.

Ship certifier DNV, ammonia producer Yara, shipping company Grieg and Altera Infrastructure are also part of the pilot project being undertaken as part of Norway’s Green Shipping Program, a public-private partnership that aims to decarbonise shipping.

No timeline has been given for testing and delivery of the vessel.

Last week, Japanese shipping company, Nippon Yusen Kabushiki Kaisha (NYK) and Finnish engineering firm Elomatic said they have jointly developed a concept design for an ammonia-ready LNG-powered vessel.

UK’s transport department forms unit focused on green shipping

The UK Shipping Office for Reducing Emissions (UK SHORE) looks to spur research into clean maritime technologies such as hydrogen, electric and ammonia with government funding worth £206 million ($270 million).

“UK SHORE is the biggest, greenest maritime R&D investment this country has seen in generations,” UK Transport Secretary Grant Shapps boasts.

UK SHORE, nested under the UK’s Department for Shipping, is part of the government’s larger £4 billion ($5.2 billion) National Shipbuilding Strategy to revitalise the UK’s shipbuilding industry.

Over 150 new naval and civil vessels could be delivered under the strategy over the next 30 years, the UK government says.