The Week In Alt Fuels: Not All Eggs In One Basket

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Green fuel producers can’t put all their eggs in the marine fuels basket, but have to diversify their outlets to reduce risk, reports engine.online.

E-Methanol plant 

Ørsted’s recent decision to shelve a 50,000 mt/year e-methanol plant has sent ripples through the maritime fuels sector. The company had planned to dedicate all of its e-methanol production to bunkering, banking on the EU regulations to boost demand for green bunker fuels. However, it ultimately pulled the plug, citing a lack of financially viable offtake agreements.

This development has reinforced a stance among bio- and e-fuel producers that diversifying their supply across multiple sectors is a prudent strategy.

For example, several major green fuel producers have not allocated any portion of their supply exclusively to bunkering. These companies plan to scale up production capacity and adapt based on demand. If shipping companies sign offtake agreements or want to procure a green fuel, they’ll supply it. Otherwise, they’ll focus more on serving other industries.

Since aviation, road transport and other hard-to-abate sectors are all vying for a piece of the same green fuel pie, this diversification can potentially create challenges for shipping’s near-term green fuels uptake.

But this competition could also become an opportunity for shipping companies to collaborate across sectors.

In the early stages of the green fuel transition, when both demand and supply are still developing, green fuel producers recommend that shipping companies could partner with other sectors to secure joint offtake agreements or shared supply chains. For example, European ports are already looking to import ammonia for bunkering and hydrogen molecules, creating multiple use cases and encouraging investment.

In other news, DNV approved two ammonia-fuelled vessel designs and an LNG dual-fuel vessel design from China’s Huangpu Wenchong Shipbuilding Company. The ammonia-fuelled vessels were a 43,000-cbm gas carrier and a 3,500 TEU container ship.

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Source: Engine.online