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Green revolution in shipping. 6.5 thousand alternative fuel ships in 2025

By Marek Grzybowski

The Clarksons Green Technology Tracker study from May indicates that shipowners have committed a significant amount of tonnage investment to low-carbon technologies. Ships with engines adapted to use two or three types of fuel are increasingly ordered by operators and now account for 48% of the total order backlog. This means that operators will launch 843 ships with LNG installations on the market in the near future, according to Clarksons experts.

Ships with LNG systems are still popular with operators. Hence their large share in order portfolios. Shipowners gained experience in their operation, shipyards in the production of ships with gas-powered engines, and ports mastered the procedures for bunkering them from land and water.

A large fleet of ships with LNG systems is already in operation, including several ferries built at Remontowa Shipbuilding for a recipient from Canada and electric ships for Norway, Finland and Iceland from CRIST and Remontowa Shipbuilding. There are 362 ships adapted to use LNG in the seas and oceans.

Clarksons experts estimate that about 5 thousand. various types of technologies to save fuel and reduce emissions of harmful substances have been installed. On the other hand, 48% of the order book includes ships with systems using alternative fuels, with 191 ships equipped with engines adapted to burn ammonia in their contracts.

In Green Technology Tracker Clarksons calculates that by 2025 the share of ships with engines using alternative fuels will reach 6.5%. Today, it is estimated that a total of 5.5% of the merchant fleet is powered by alternative fuels, while in 2017 only about 2.3% of merchant ships used alternative fuels in their engines. It was mainly LNG.

LNG systems on ships dominate
“LNG is characterized by a tried and tested technology, a well-functioning supply chain and interchangeability in other applications,” emphasizes Nicola Contessi, a research fellow at the York Center for Asian Research in Toronto, specializing in shipping and transport, in Maritime Executive. He points out that the reduction of LNG imports by EU countries from Russia has strengthened these benefits.

Nicola Contessi has calculated that LNG fuels 93% of the active fleet using alternative fuel engines and 57.5% of the contracted fleet. As an example of the increase in demand for green fuels, he cites the sale of a bunker in Rotterdam in the second quarter of 2023. Indeed, the port of Rotterdam has seen an increase in demand for green fuels.

The percentage share of sales in Rotterdam of alternative fuel bunkers (including all bio-mixtures, LNG and methanol) increased by 10% in the quarter, compared to 7% in the first quarter. Demand for bunkering biofuels increased significantly in the second quarter of this year, after a drop in demand recorded in the first quarter.

S&P Global notes that “biofuels have become a popular choice among shipowners looking to decarbonise [ships in operation – MG], providing a drop-in solution that requires little or no ship modernization.”

Methanol, ammonia, hydrogen
Methanol is another fuel fleet operators rely on. The fuel can be used after the ship is rebuilt, or even better, when the installation is installed during construction. The solution is not as common as ships with LNG systems.

A limitation in the dissemination of methanol in ship propulsion systems is the poor adaptation of ports to handle this type of vessel. Ships capable of safely bunkering are not widely available at destination ports. The infrastructure that allows methanol to be bunkered from the quay is also not very developed.
Ammonia as a marine fuel still raises numerous concerns and objections. This is due to the fact that bunkering technology has not been extensively practiced and mastered. Therefore, the conditions and procedures for safety and environmental protection are not known.
Hydrogen on large ships is still the melody of the future. We already have the first solutions behind us. Hydrogen-powered ships have been introduced by leading technological countries, but these are still experiments at taxpayers’ expense.

Not (new) technologies
The green revolution on ships is not limited to the search for alternative fuels. Shipowners are looking for ways to save fuel consumption, often introducing several technical improvements.
Clarksons estimates that Energy Saving Technology (EST) has already been applied to more than 6,250 ships, representing 27.3% of the fleet (by deadweight).
The most commonly used are various types of propeller nozzles (>2000), modernized rudders (>1600), Flettner rotors (>20), rigid sails and spinnakers (>12), air lubrication systems for the hull (>350).
Not very new technology, but still not always common. Today, they are used more and more often, when shipowners have chosen to save fuel. Since the “slow steaming” system has already exhausted its possibilities, the time has come to dig up proven technical solutions and introduce new fuels.
The combination of many technical solutions is also a challenge for design offices as well as production and repair shipyards. The course for green ships is already set and the movement to introduce environmentally friendly solutions is accelerating. The green revolution in shipping is a fact and is gaining momentum.

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Maritime tourism is moving “full speed ahead”

By Marek Grzybowski

The first information from tour operators confirms that in 2023 the number of passengers on cruise ships increased to 106% compared to the level in 2019. Approximately 31.5 million sea tourists chose passenger ships – estimates the Cruise Lines International Association (CLIA).

This means a higher growth rate of sea tourists than the estimated growth rate of international tourism. UNWTO (United Nations World Tourism Organization) estimated that the number of international tourists in 2023 will reach from 80% to 95% of the pre-pandemic level in 2020. At the beginning of 2023, UNWTO reported on its website about a 20% decline in bookings on a global scale.

CLIA brings together 53 cruise ship operators, including 43 ocean ship owners (28 global and 15 regional) with 293 ships. CLIA also includes 10 river cruise operators. There are 3 global companies and 7 regional shipowners with 194 ships. Nearly 300 active partners supporting tour operators and approximately 75,000 cooperate with the organization. companies from the tourism industry, including approximately 15 thousand agencies and 60 thousand travel agents.

These numbers make you realize how many entities make their living from tourism and how many institutions must operate for maritime tourism to develop efficiently. A whole lot of people work to ensure that the passenger reaches the ship safely, spends time on board and in the port, and disembarks the ship safely.

Sea passenger is a business at sea and in port
It has been calculated that, globally, the maritime passenger tourism business provides a living for 848,000 people. jobs, the revenues of countries where this business is developing reach USD 75 billion. The main beneficiary is the United States of America. Europe receives approximately USD 44 billion thanks to maritime tourism, and thanks to the industry serving maritime tourists, we have 315,000. jobs.
The rest of the world generates revenues from marine tourism of USD 11 million and provides 411,000. jobs – calculated by CLIA experts over a year ago (CLIA 2021 Economic Impact Study, Oxford Economics. 2022 (Economic Impact results to be released in September 2023). To put it illustratively, 24 passengers on a passenger ship generate on average one job.
Sea tourists return to ships repeating cruises or choosing new destinations. This proves good for passenger ship operators who are able to create regular customers. During research conducted a year ago, more than 6 out of 10 people (63%) who decided to take a cruise were passengers who returned to the connection they chose for the first time.
They often go on a trip with the same shipowner or even the same cruise ship. It is mainly millennials (68%) and Generation X (86%) who decide to travel again, and to a slightly lesser extent baby boomers (82%) and Generation Z (78%).

Cruise operators are investing
Cruise operators do not skimp on investments, and their expenditure on services and new production is significant and constitutes a significant impetus for economic development. An impulse that is particularly important during the economic slowdown in leading markets.
More than a year ago, purchases by passenger ship operators in Europe alone were estimated at approximately EUR 5 billion. Globally, it was over USD 35.37 billion. Around EUR 720 million was spent by passengers on board and disembarking in European ports. Globally, passengers spent over $1.9 billion in ports and on ships.
Over EUR 10.5 billion was allocated for new contracts over a year ago. Passenger ships with a contract value of over USD 13 billion were built in shipyards around the world. More than EUR 1.3 billion was spent on the wages of crews and land staff of cruise ship owners. Crews and personnel of operators around the world cost more than $5 billion during the year.
New investments also mean choosing a course for ecology. Many passengers choose cruises on ships that are environmentally friendly, not only on the water and in the air. There are those who pay attention not to harm marine fauna and flora.

LNG and electricity from the quay FIRST

So cruise operators are on a decarbonization course. They use progress and introduce new technologies on ships and in the infrastructure of passenger ports. The ships are equipped with new efficient engines and less noisy systems. Most large operators choose engines powered by gas from LNG systems.

Many claim that these are temporary solutions and new generations of cruise ships will be powered by ecological fuels from renewable sources. Therefore, bioLNG and renewable synthetic LNG are treated as a solution for today and the next few years.

The shipowner’s organization announces that “75% of CLIA’s cruise ship fleet will be able to use renewable fuels once they become available on a large scale.” It has already been announced, based on the analysis of the order portfolio placed in shipyards, that 60% of ships that are to enter into service in 2023–2028 will be based on power plants with LNG systems as the main power supply system.

LNG bunkering and energy supplies from the quay are necessary

New ships in the service also requires investments in infrastructure. Firstly, the ports’ potential for LNG bunkering must increase. And secondly, ports will compete in their ability to provide electricity to passenger ships from the quay.

CLIA wants to be the leader in organizing cruises in responsible tourism. “By 2028, the number of CLIA member cruise ships equipped with shore power will more than double,” the organization announces.

Operators associated with CLIA announce that “Emissions of harmful substances will be reduced by 99%.” The goals are ambitious. It is planned to reduce greenhouse gas emissions by over 20%, SOx by 99%, soot emissions by 98% and NOx by 85%. The forecasts are based on technical analyzes of the 2021 order portfolio for new ships.

“Every CLIA member ship currently under construction by 2028, with the exception of expedition vessels, is to be equipped with shore-power capabilities,” CLIA announces. Today, 30% of CLIA shipowners’ ships, corresponding to 40% of GT, have systems for connecting to land energy sources.

30% of passenger ships plan to install connections during their modernization. The collected data shows that 29 cruise ports around the world have at least one shore-powered quay. It is known that another 20 ports will join this group in a short time.

Changes in passenger ship construction technologies have made it possible not only to serve an increasing number of passengers, but also to introduce all kinds of entertainment and services on ships. New technologies have made cruises more and more environmentally friendly, which is also appreciated by passengers. And this is also one of the important elements of building a competitive advantage.

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Ekonomista 2023 No 3

Ekonomista is a journal dedicated to science and the requirements of life that was launched in 1900. It is published by the Polish Economic Society and the Institute of Economics of the Polish Academy of Sciences.
Editor-in-chief: prof. dr hab. Marian Gorynia
Current issue 3/2023
The soundness of returning to manufacturing through the lens of productivity accounting Dariusz Cezary Kotlewski 
Ekonomista 2023;(3):253–274 DOI: https://doi.org/10.52335/ekon/171520 Abstract  Article (PDF) Stats
Going digital and intangible: intangible investments effects on a company’s success Eva Erjavec 
Ekonomista 2023;(3):275–294 DOI: https://doi.org/10.52335/ekon/170239  Abstract  Article (PDF) Stats
State-owned enterprises in the modern economy: the objectives and determinants of efficiency Katarzyna Szarzec 
Ekonomista 2023;(3):295–314 DOI: https://doi.org/10.52335/ekon/170240 Abstract  Article (PDF) Stats
The evolution of capitalism and the concept of a natural economic order Bogusław Fiedor 
Ekonomista 2023;(3):315–332 DOI: https://doi.org/10.52335/ekon/170316  Abstract  Article (PDF) Stats
REVIEW, DISCUSSION
Reflections on Oblicza polskiego etatyzmu gospodarczego by Stanisław Czaja and Bogusław Fiedor; Piotr Szymaniec, Lech Kurowski 
Ekonomista 2023;(3):333–340 DOI: https://doi.org/10.52335/ekon/170241 Abstract  Article (PDF) Stats
Review of the monograph: Polskie przedsiębiorstwo na jednolitym rynku europejskim. Wyzwania współczesności, eds Marian Gorynia, Joanna Kuczewska and Alojzy Z. Nowak, Polskie Wydawnictwo Ekonomiczne, Warsaw 2022 (245 p.) Adam A. Ambroziak 
Ekonomista 2023;(3):341–343 DOI: https://doi.org/10.52335/ekon/170242  Article (PDF)
More: Ekonomista

 

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Demand for alternative fuels is growing in ports. LNG is making a comeback

   

By Marek Grzybowski

Lower LNG prices have resulted in greater demand for gas in ports. In Rotterdam, LNG sales increased by almost 109% quarter-on-quarter, reaching 266,000 tonnes in the second quarter. m³. In Singapore, shipowners in June bunkered 17.9 thousand. m³, and in July 18.3 thousand. m³ of LNG. It is predicted that there will also be a demand for methanol, which may become the fuel of the future.
Russia’s invasion of Ukraine has disrupted global LNG markets and pushed LNG prices to over $2,500 a ton in Rotterdam and over $2,000 a ton for a bunker in Singapore last year. However, prices have dropped significantly since then and LNG has been available at big discounts for several months now. Gas on ships again became more attractive than VLSFO, which was quickly seen in the world’s major ports, where bunker turnover reaches significant volumes.
In Rotterdam, LNG sales amounted to 112,069 m³ in Q2 2022. LNG sales in Q2 were also the highest quarterly sales volume since Q3 2021 (212,719 m³). In the first half of 2023, LNG sales amounted to 265,892 m³. For comparison, in the same period of 2022, 214,648 m³ were fueled on ships. Ship operators or ship management companies were concerned about price volatility and the possibility of using regular gas supplies.

Economic activity and bunker prices
The Port of Rotterdam Authority announced that the total sales volume of the bunker in Rotterdam (excluding lubricants) fell by 10% in the second quarter of 2023. Low sales of VLSFO were decisive.
Demand fell in the second quarter of this year. by 8% to 906,368 tonnes, which is 15% lower than in the previous year. In Q2, traditional marine fuels continued to dominate the demand, as their share reached 38% of total sales.
HSFO sales increased by 5% in the second quarter, and the share of this fuel in sales increased from 30% to 35%. Total sales volume also increased during the year, reaching an 18% increase compared to 2021 levels.

This year, for the first time, owners of dual-fuel LNG ships have an economic justification to benefit from investments in innovative power systems for new types of ship engines.
However, since for most of the 1920s the price of LNG was too high, the vast majority of operators of dual-fuel vessels used traditional marine fuel.

Gasum will reduce carbon dioxide emissions
As soon as gas became cheaper, it was also profitable to introduce a bunker to the market. In June, the tanker Kairos returned to operation as part of Gasum. It is an LNG bunkering vessel owned by Gasum. From October 2022, the shipowner directed it for use on the open market outside the company.

It is assumed that the biogas offered by Gasum will reduce carbon dioxide emissions by an average of 90 percent compared to traditional fossil fuels. “Increasing the use of bio-LNG is one of the concrete actions that will lead the shipping industry towards a low-emission future,” the company said.
“Gasum’s strategic goal is to market seven terawatt hours (7 TWh) of renewable gas annually by 2027. Achieving this goal would mean an annual cumulative reduction of 1.8 million tons of carbon dioxide emissions for Gasum customers,” the company explained.
this summer the operator carried out the first LNG bunkering operation at the port of Reykjavik, Iceland. Coral Energy’s LNG bunker supplied LNG and liquefied biogas (LBG) for the engine room of the PONANT Le Commandant Charcot cruise ship.

Time for a Polish LNG tanker bunker
The introduction of such tankers as Coral Energy and Kairos into operation in Poland was discussed on the occasion of the launch of the LNG terminal in Świnoujście. For many years, dual-fuel engines with the possibility of burning gas began to dominate the portfolios of orders for ships.
According to the latest estimates by the classification society DNV, the number of ships with dual-fuel engines and LNG systems that are in service and on order has exceeded 900 units. Kairos is a good example for a potential operator of a Polish LNG bunker.
The tanker has been designed so that it can deliver LNG to ships of various types and sizes in all possible bunkering locations in North-West Europe. The vessel can deliver LNG at pumping rates from 60 m³ per hour to 1,250 m³ per hour. Perhaps it is time to introduce the Polish LNG bunker to the Baltic market.

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Building Resilient Economies: Empowering Governments through Digital Transformational Strategies in Global Trade!

Discover some of the industry leading speakers you’ll get to connect with and ask questions to as they join us for the discussion on Building Resilient Economies: Empowering Governments through Digital Transformational Strategies in Global Trade!

Featured Speakers
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Solomon Raj Joseph
Senior Product Director
CrimsonLogic
Experienced techno-business leader with 20+ years in IT, Trade & Logistics, Telecom, and Banking. Expertise includes Product Direction, Project Management & Chief Architecture roles. Over the past 13 years, Solomon has spearheaded mission-critical Trade Facilitation systems in 15+ countries across Asia, Africa, Middle East, and Americas.Solomon possesses in-depth knowledge of Trade & Logistics, Supply Chain Processes, Compliance, and Regulatory procedures. Experienced in Cross Border Trade, Supply Chain Risk Management, Customs policies, National Trade policies, and Free Trade Agreements.

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Ninan Oommen Biju
Sr Port & Maritime Transport Specialist
The World Bank – Transport Global Practice
Ninan Oommen Biju is the Senior Port & Maritime Transport Specialist at The World Bank Transport Practice based in Singapore, engaged in the preparation and supervision of projects, sharing of knowledge and experience and technical assistance for maritime infrastructure development. Prior to joining The World Bank, Ninan was the CEO of a short-sea container ship owner and operated services in consortium with global container shipping lines from Singapore hub port to the main gateway ports in South-East Asia & South Asia.
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Gregory Smith
Head of Exploration and Digital Transformation
UNDP Trinidad and Tobago
Gregory joins the panel with over 10 years’ international experience in financial analysis for mergers and acquisitions, e-commerce product management, IT systems implementation, strategic planning, and market analysis. Gregory holds a BSc. in Mechanical Engineering, an MBA from Howard University, and a MPP in Public Policy Analysis and Economics from the University of Chicago. He is passionate about working collaboratively and applying a rigorous analytical approach towards developing sustainable, courageous, innovative solutions that directly improve the lives of everyday people.

Explore the strategies and opportunities that can empower developing nations to optimize their government processes, leading to remarkable efficiency gains. By embracing these insights, you’ll be able to reduce operational costs and navigate trade regulations more smoothly, all while revolutionizing how your business engages with government entities.

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Thursday, September 28th 2023 – 1:30 – 2:45 PM (EDT)

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Kind regards,
The Port Technology International Team

CrimsonLogic In partnership with Port Technology International