Collaboration key to green shipping corridors: APM

Spanish Market: Biofuels, Oil products
14/03/24

Collaboration between countries and stakeholders willing to find sustainable decarbonisation solutions is key to the success of green shipping corridors, said speakers at the Asia Pacific Maritime (APM) 2024 conference in Singapore.

Singapore has initiated green shipping corridors with the aim of helping energy transition in the maritime sector, said the assistant chief executive (industry and transformation) of the Maritime Port and Authority of Singapore Kenneth Lim, speaking at a keynote panel during the 13-15 March event. This follows the signing of an initial deal between Singapore and Australia on setting up the Green and Digital Shipping Corridor. There are an estimated 44 green shipping corridors that have been announced globally, most of which are at a planning stage.

The main deadlock to making green corridors operational remains, as it is unclear who will bear the burden of higher fuel costs, given the large price gap between conventional and alternative marine fuels, said the chief technology officer for energy and fuels at Denmark's Mærsk Mc-Kinney Møller Centre for Zero Carbon Shipping Torben Norgaard.

This gap can be filled either through a concept like the Zero Emission Maritime Buyers Alliance, a cargo owner-led alliance of major multinational companies working together to accelerate maritime shipping decarbonisation, or through regulation to allocate increased costs, such as putting a price on carbon.

The green corridors that have moved ahead the most are those where roles and responsibilities including cost allocation are clear and there is trust between stakeholders, such as in the EU, Norgaard added.

"Right now green corridors are primarily in the initiation and planning stages with operational green corridors on the horizon," said the head of decarbonisation at the UK-based Sustainable Shipping Initiative Andreea Miu. "Getting to that stage will depend on stakeholders working together to make concrete investments to enable the corridor."

Developing bunkering infrastructure, building or retrofitting vessels that can run on the chosen alternative fuels, along with the training of seafarers in the handling of new fuels, are some of the initiatives that the investments should be aimed at, Miu added.

But more importantly it is a "coalition of the willing who are willing and able to work together and operate in a very specific economy where they avoid too much interference", that is needed to enable the green shipping corridors, Norgaard said.

Looking ahead

The green corridors could help shipowners as fuel selection also remains a key hurdle, with unresolved safety concerns over alternative fuels like ammonia, APM panelists added.

It is important to consider how the volumetric energy density of alternative fuels is "way less" than that in fossil fuels, which would result in shipowners having to decide between carrying more fuel or bunkering more, and looking for more locations where they can bunker, said the chief technology officer of the Singapore-based Global Centre for Maritime Decarbonisation Sanjay Kuttan.

The next "super corridor for green fuels" could emerge between south India and east China's Ningbo/Zhoushan, where the two countries' collective 3bn population will create significant demand for vessels to do transshipments there, Sanjay said

By Mahua Chakravarty, Sarah Giam and Lauren Moffit

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23/12/24

German heating oil demand dips, diesel stocks reduced

Hamburg, 23 December (Argus) — Heating oil consumers in Germany are refraining from purchasing because of high inventories, while importers are lowering their diesel stocks to maintain low bio-blended reserves. Reported volumes of heating oil traded to Argus fell by nearly 35pc last week. Consumers see little need to increase their stocks that, although they have steadily declined, remain higher than the same period in 2023 at 59.6pc, Argus MDX data show. Heating oil traded at about €1.50/100l higher than the previous week, further deterring consumers from last-minute purchases ahead of the Christmas holiday. Importers are striving to keep their diesel stocks minimal until the year's end. Obligated parties will be unable to use any surplus greenhouse gas (GHG) certificates from previous years in 2025 and 2026, so importers that have already met their obligations this year are eager to avoid generating more certificates until January. As a result, demand is low for diesel imports into Germany's northern ports and to storage facilities along the Rhine river. Northern Germany experienced a significant drop in imports in December to the lowest since September, Vortexa data show. But importers and barge operators are preparing for increased import activity in early 2025 to replenish their biodiesel inventories as quickly as possible. Suppliers at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery in Bavaria are experiencing low stocks, primarily as a result of heightened demand in early December when buyers were active before an increased CO2 levy and the GHG quota take effect on 1 January. By Natalie Müller Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Europe’s refiners eye support from closures

23/12/24

Viewpoint: Europe’s refiners eye support from closures

London, 23 December (Argus) — Another tranche of European refining capacity will close for good next year, but the reprieve for margins in the region may only be temporary. Nearly 400,000 b/d of capacity, around 3pc of Europe's total, is scheduled for permanent closure in 2025, comprising Petroineos' 150,000 b/d Grangemouth refinery in Scotland, Shell's 147,000 b/d Wesseling refinery in Germany and a third of the capacity at BP's nearby 257,000 b/d Gelsenkirchen refinery . Around 30 refineries have closed in Europe since 2000. Among the most recent was Italian firm Eni's 84,000 b/d Livorno refinery in northern Italy earlier this year. And only this month, trading firm Gunvor announced it is mothballing its small upgrading refinery in Rotterdam . The Rotterdam facility had already stopped processing crude in 2020, leaving it peculiarly exposed to the margins between intermediate feedstocks and finished fuels. The refinery has been hit by a 25pc increase in operating costs in the last four years and a squeeze on margins, the latter the result of competition from new refineries outside the region, Gunvor said. Outside Europe, the world has added more than 2.5mn b/d of crude distillation capacity in the last three years. Three brand new refineries have come on stream in the Middle East in that time — Saudi Arabia's 400,000 b/d Jizan, Kuwait's 615,000 b/d Al-Zour with Oman's 230,000 b/d Duqm refineries. More recently, Nigeria's 650,000 b/d Dangote refinery, Mexico's 340,000 b/d Olmeca refinery and Yulong Petrochemical's 400,000 b/d refinery in China's Shandong province started up, all of which are likely to ramp up throughput in 2025. Refinery closures tend to support margins for those that remain. But European refiners' costs continue to rise while demand for their products falls, which means next year's closures are unlikely to be the last. Simpler and smaller refineries are prime candidates for closure as they usually achieve weaker margins. Europe also has plenty of refineries built before 1950 that are still running. These older plants can be more at risk of accidents and breakdowns. And repairs can sometimes cost so much that they tip a refinery into the red. An ongoing concern for European refiners is the trend towards lighter and sweeter crude slates , driven by supply-side dynamics, which is resulting in higher naphtha yields at a time when demand for naphtha from Europe's petrochemical sector is under pressure from a contraction in cracking capacity. But many in the market expect the greatest pressure in 2025 will fall on those coastal refineries in Europe that were built to maximise gasoline output. If, as expected, Dangote continues to shrink Nigeria's demand for gasoline imports , these refineries will be hit hardest. Any refinery that cannot desulphurise all of its gasoline output to the 10ppm required for UK or EU usage will be under intense pressure, as west Africa is presently among the only outlets for European high-sulphur gasoline. Strike support One of the strongest supports for European refining margins in 2025 could come in the form of industrial action if new capacity cuts or closures were to be announced. Refinery workers in the region have shown willing and able in the past to organise large-scale strikes, most emphatically in France. The highest diesel refining margins Argus has ever recorded came in October 2022, when the entire French refining system was shut down by strikes. Another trend to watch out for next year is the continuing shift in the ownership structure of Europe's refining sector. The large integrated oil companies that have dominated the industry for so long have been steadily selling European refining assets to independents and trading firms. The latter are nimbler and able to cut costs more ruthlessly. And with many of them not publicly listed, they are less susceptible to pressure regarding their environmental footprints. There could be more instalments in this story in 2025. Sweden's Preem started accepting bids for its Swedish refining assets in the summer of 2024 and Russia's Lukoil is considering bids for its Burgas refinery in Bulgaria. By Benedict George Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Shell and Prax call off deal on German refinery stake

20/12/24

Shell and Prax call off deal on German refinery stake

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Viewpoint: EU, UK mandates will drive global SAF demand

20/12/24

Viewpoint: EU, UK mandates will drive global SAF demand

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Trump backs new deal to avoid shutdown: Update

19/12/24

Trump backs new deal to avoid shutdown: Update

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