Dive Brief:
- CMA CGM will test a new biofuel on one of its container vessels on March 19 in a partnership with the Port of Rotterdam, the GoodShipping Program and Ikea Transport & Logistics Services, according to a press release. The company release did not specify what the next steps are after the test.
- The new fuel is expected to reduce "well-to-propeller" CO2 emissions by 80-90% and doesn't require any engine modifications.
- Using this fuel would allow ships to forego costly vessel upgrades that might otherwise be required to comply with low-sulfur guidance related to IMO 2020, Xavier Leclercq, the vice president of CMA CGM, said in a statement.
Dive Insight:
"This fuel is unique and has only recently been launched by our fuel supplier," Anniek Sluis, the Growth Captain at the GoodShipping Program told Supply Chain Dive in an email. "The fuel is called GoodFuels Bio-Fuel Oil and is a 1:1 replacement for the fossil fuel oil used in shipping."
The fuel is made using forest residue and waste oil, according to GoodFuels. It underwent three years of testing with marine engine manufacturers. The upcoming test involves looking at the effect on the ship engines. This will be the first time the fuel has been bunkered into a container vessel.
It's not immediately clear how this new fuel differs from other low-sulfur options and what the cost of the final product might be. Other low-sulfur options are expected to increase fuel prices for carriers by hundreds of dollars per ton. These fuel increases are being passed along to shippers in the form of higher fees that have been announced by most major carriers.
A D/S Norden ship used GoodFuels' biofuel to travel from the Netherlands to Estonia in September. The company's CEO Jan Rindbo told the BBC that biofuel would be more expensive than traditional fuel, but didn't compare it to other low-sulfur options.
"With a successful pilot completed, our intention is to put the equivalent of at least all our containers out of Rotterdam on biofuel," Elisabeth Munck af Rosenschöld, the head of sustainability at Ikea Global Transport & Logistics Services, said in a statement.
Ikea is the GoodShipping Program's first large international customer, Sluis said, "but we expect to announce many more in the near future."
This test is happening at a time when carriers are trying to figure out how they plan to comply with the IMO sulfur regulations that take effect next year.
The International Energy Agency expects demand for high-sulfur fuel oil to drop 60% as a result of these new regulations, according to Reuters. Royal Dutch Shell is working with a firm to restart a German oil refinery that's been dormant since 2011 to meet the demand for low-sulfur options, Reuters reported. And BP announced a new marine fuel this week that is compliant with the IMO regulations, saying it intends to sell it globally, according to a press release.
"Together we send a very clear message: sustainable biofuels are ready today, and we can meet the pathways laid out by the IMO in a manner that is attractive to major cargo owners such as IKEA," The GoodShipping Program CEO Dirk Kronemeijer said in a statement.
