The tonnage provider will use the carbon-neutral fuel as a drop-in for its conventional vessels and pilot fuel for methanol newbuilds.
Norwegian container tonnage provider MPC Container Ships has signed a supply agreement for synthetic marine diesel from 2024. The company will work with German power-to-liquid provider Ineratec, which is building a 10MW plant in Frankfurt that will deliver 3.5 million litres of sustainable aviation fuel, MDO and synthetic chemicals a year.
The deal will help MPC’s existing tonnage to lower its emissions and CII scores as a drop-in fuel blended with conventional diesel, as well as being used as pilot fuel on two methanol-fuelled feeder vessels to be delivered in the second half of 2024. CEO Constantin Baack noted that the move also prepares MPC for a shifting charter business model.
“As a key building block of the decarbonisation of our industry, we expect that green fuels may come to be included as part of vessel hire, in which case it will be vital for MPCC to have a strong relationship with fuel providers,” he said.
The synthetic MDO will be produced from biogenic carbon dioxide and renewable hydrogen. According to DNV’s Maritime Forecast published last year, the fuel could account for more than 50% of the global use of ship fuel by 2050. That includes its use as a blend or replacement to diesel in conventional engines and its anticipated use as a pilot fuel for methanol- and ammonia-fuelled engines.
Green fuel scramble
The agreement positions MPC as an early mover in what could be a scramble for green fuels among ship owners. Maersk has already begun sweeping up future green methanol production, with nineteen vessels using the fuel to enter service by the end of the year.
If Baack’s prediction about a new ‘ship and green fuel’ charter model is realised, owners will be competing for scarce supply. According to the Maersk Mc-Kinney Moller Center for Zero Carbon Shipping, producing enough synthetic diesel to reduce emissions by 8% by 2030 would require 500 plants each producing around 50,000 tonnes of fuel a year. That is around three quarters of current global production, mostly for the automotive industry, which is mainly produced from fossil feedstocks.
If production can be scaled up, synthetic diesel offers a clear opportunity for ship owners, who could avoid the cost and complexity of using new methanol- and ammonia-fuelled engines. But lower capex could be offset by higher operating costs; DNV anticipates that green MDO will be more expensive than green methanol and ammonia.
The rush for green fuels will be accelerated if proposals for a new IMO target are adopted, requiring a percentage of zero-carbon fuel to be used by 2030. Multiple submissions to MEPC79 in December contained the proposal, which will be discussed again at MEPC80 in July as a new greenhouse gas reduction strategy for shipping is finalised.
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