Increasing regulation on the shipping industry

The shipping industry is one of the most important in the global movement of goods. Its decarbonisation is now becoming a regulatory requirement with new regulations coming into force across EU, USA and the industry regulatory, the IMO. For example, shipping will be added to the EU Emissions Trading Scheme in October 2023, meaning ship operators will now need to account for the cost of carbon. The idea behind this is to ensure the cost of polluting is accounted for, which either ensures that the polluter pays, or that companies are incentivised to decarbonise operations.

In the case of the shipping industry, this means using alternative fuels that pollute less than the conventional bunker fuels that are common today, such as Heavy Fuel Oil (HFO) and Marine Fuel Oil (MFO).

The problem today with such a decarbonisation requirement is two-fold: the current availability of alternative non-polluting fuels is low. Even the most major ports in the world are only just starting to offer such bunkering in low-carbon methanol, ammonia, with essentially no hydrogen coming online in the next year. 

The second point, which is the focus of this article, is thus: even with high availability, there is currently no set, clear and industry-wide standard on these green fuels, in terms of their quality, performance, supply chain, and carbon avoidance potential.

Take methanol for example. Methanol is a widely used and available chemical today, but it is produced through the steam reformation of gas, which does not currently count as a low-carbon production method. If the bunker fuel used is conventionally produced methanol, carbon avoidance is estimated at 15%. If the bunker fuel is bio-methanol (methanol made from organic waste or other biomass), carbon avoidance is estimated at 60 – 70%. If e-methanol is used (methanol made using renewable energy) the carbon avoidance estimate is around 70 – 90%.

What this illustrates is that three ships could all be using methanol and have radically different carbon emission levels and, therefore, different carbon costs to pay.

The shipping industry heavily relies on fuel products to power its vessels, with the cost of fuel sometimes representing as much as 70% of a ship’s operational costs. A key part of the process of bunkering these fuels, therefore, is quality testing of the fuel which covers chemical composition, quality, water contents of the fuel, performance, presence of impurities, combustion efficiency, emissions, energy density, stability, compatibility with the ship’s engine system, among other pertinent points, to ensure the fuel will allow the ship to run smoothly. 

In a maritime industry where carbon price becomes more and more relevant, it will be important to adopt and/or adapt tests relevant to the carbon intensity of the fuel beyond general indications of the fuel quality. A brief overview of the key focuses in marine fuel testing will be useful in demonstrating the complexity of this challenge to the bunkering industry.

Important tests on bunker fuel

Fuel composition and properties

Traditional fuel analysis examines parameters such as viscosity, the flashpoint of the fuel (essentially, the point of combustion), sulfur content, and density to ensure compliance with industry and regulatory standards.

For renewable or low carbon fuels, the composition, and properties, particularly viscosity, differ significantly compared to conventional bunker fuel, which is a very dense black liquid. The composition and viscosity standards would therefore need to be adjusted and agreed upon within the industry as it pertains to cleaner and lighter fuels such as methanol and ammonia, which are much shorter-chain molecules compared to conventional bunker fuel. Analysis of the “renewables” will need to include parameters specific to these fuels, namely biofuel content, feedstock origin, carbon intensity, and blending compatibility.

But this is precisely where the problem lies. “Feedstock origin” as a parameter will differ between different types of methanol and ammonia, bio- and e-, and different types of hydrogen: green, blue, or grey. Biofuel content will differ also. As such, the road to maritime fuel decarbonisation, and ensuring shipping companies are charged the right carbon price fairly, is far from simple.

Combustion efficiency and energy density

Combustion efficiency generally refers to how easily the fuel burns in the ship engine and covers factors like ignition delay, heat release, and flame stability.

The “renewables” such as methanol and ammonia have lower energy density and potentially altered combustion kinetics compared to conventional carbon-intense fuel, so a whole new testing standard would be required in this regard. It will also take time for the industry to understand precisely what counts as a good combustion efficiency rate for the new fuels, particularly if ships are not being retrofitted to contain new engines. This will most likely impact engine performance and vessel efficiency negatively, requiring adjustments calculations to be taken into account.

The emissions profile and lifecycle assessment

Evaluating emissions and overall environmental impact is crucial for measuring the environmental impact of shipping fuels and calculating the carbon price a shipping operator ought to pay.

Traditional fuel analysis focuses on sulfur oxides (SOx), nitrogen oxides (NOx), and particulate matter emissions. Renewable or low carbon fuels often produce lower or even negligible SOx and particulate matter emissions. However, the analysis may need to consider other pollutants, such as greenhouse gas emissions (e.g., carbon dioxide, methane), and potential effects on local air quality.

An additional consideration particularly important to ammonia is aquatic impact. Ammonia toxicity, if it leaks into seawater, can lead to pH toxicity and potentially death in aquatic species. As such, a key part of ammonia fuel testing may be, quite interestingly, a test on the ship engine’s ability to burn ammonia properly, to ensure avoidance of ammonia leakage. This will be a testing standard quite unique to this fuel which will need to be developed and enforced with the help of the maritime regulator.

Overall, the move to cleaner, lighter, and less-polluting fuels is not as easy as just producing them and throwing them in the ship engine. A whole new set of standards and processes need to be created to ensure that these fuels have the proper composition, low carbon impact, feedstock origin, and engine compatibility to run the ship smoothly. However, there is hope, as the maritime industry has done this before. A short overview of the developed Low Sulfur Fuel Oil standard is helpful in understanding the way such standards could be developed quickly and efficiently.

The creation of the low sulfur fuel oil standard in 2020

To begin, Low Sulfur Fuel Oil, LSFO, is a fuel introduced by IMO to meet regulations on sulfur emissions, introduced in 2020.

LSFO has a maximum sulfur content of 0.50%, significantly lower than traditional Heavy Fuel Oil, the widely used bunker fuel in the industry.

ISO standards

The International Organization for Standardization (ISO) has established standards, such as ISO 8217, to define the specifications and quality parameters for marine fuels.

These standards cover various aspects explored above, including viscosity, sulfur content, flashpoint, and density.

The LSFO standard and testing process

Ship operators conduct routine onboard tests to verify fuel quality and compliance with specifications through intuitive and standardised onboard tests. These tests can cover viscosity measurement, flashpoint testing, and density determination quickly and at low cost.

Fuel samples are then sent to accredited laboratories for comprehensive analysis (examples are Lloyd’s Register, Bureau Veritas, and Intertek). Laboratory testing involves more rigorous techniques, including gas chromatography, elemental analysis, and sulfur content determination.

The test results are then compared with the information in the Bunker Delivery Note (BDN), which is sent from the fuel supplier to the fuel buyer. A BDN details the quantity and quality of the fuel delivered. This is an important step in successful bunkering, where the buyer can compare the information in the BDN to the laboratory results on the fuel.

How to properly test a low-carbon fuel

For low-carbon fuels, many features of this test, such as sulfur content determination, will remain the same. Additional tests analysing carbon intensity and water content (essentially fuel purity) will likely need to be incorporated. This is because the carbon intensity of the fuel will determine how much a shipping operator has to pay under carbon price mechanisms. 

The carbon intensity will include elements beyond the lab. For example, to determine the carbon intensity or carbon avoided of bio-methanol, you would likely need documentation confirming the supply chain. This could cause delays and complexity as more stakeholders are part of the “testing” process. 

In the scenario of e-methanol, or an e-fuel generally, it is likely renewable energy certification will be needed to confirm that the fuel was truly produced using renewable energy sources. Perhaps such proof of low carbon intensity could be sent alongside the BDN, or incorporated into the document, but this will generally make the BDN document longer and more complex, with additional risk to be taken by the buyer, particularly on feedstock origin of the fuel.

In conclusion, there are a lot of moving parts that are very important in ensuring a clear, standardised, and fair transition to renewable and low-carbon fuels in the maritime industry. The move to lighter and cleaner fuels will require shifts in fuel quality testing standards and, more difficulty, what is being tested in the first instance. While the key metrics of fuel performance will remain the same, the additional hurdles of testing feedstock origin, carbon intensity and, perhaps, engine compatibility with the fuel will require the help and opinion of the IMO and classification societies to ensure the process is clear and carbon prices are fairly applied to shipping companies. 

The shift to low sulfur fuel oil in 2020 demonstrates the maritime industry’s ability to research and innovate testing methods to properly understand alternative fuel technologies. As the use of cleaner marine fuels are encouraged and adopted, such as liquefied natural gas (LNG) and biofuels, the way we power global trade and, by extension, the way we test the fuels powering global change, will likely change drastically.