The journey to carbon-free shipping

The shipping industry has set course for decarbonisation with an initial greenhouse gas (GHG) strategy that is due to be revised in 2023. In this strategy, the current goal is to reduce at least 50% of its total annual GHG emissions from international shipping by 2050, compared to 2008. In addition to this ambition set by the International Maritime Organization (IMO), in July 2021, the European Commission also proposed various new, stringent EU regulations on the shipping sector.

Alongside the urgency to decarbonise, shipping still needs to responsibly meet increasing fuel consumption driven by the rising demand for shipping. So how does the industry tackle the climate challenge and reinvent itself in the energy transition?

At TotalEnergies Marine Fuels, the company’s strategic focus is to effectively support its shipping customers’ decarbonisation journeys across the short- and long-term.

Along with the development of low-sulfur fuels that comply with the new IMO sulfur limit regulations, the company recognised early that LNG represents the best alternative solution today – in terms of emissions, availability, and affordability – to reduce shipping’s environmental footprint. Importantly, next-generation, natural gas solutions – bio- and e-methane – have the benefit of utilising the same LNG bunkering assets and infrastructure, thereby extending the shelf life of these investments made by the industry today.

As such, TotalEnergies took long-term investment commitments to support the uptake of marine LNG globally. Its goal is to extend its LNG supply chain across major global bunkering hubs.

In December 2021, the 18 600 m3 Gas Vitality started operations and joins TotalEnergies’ growing LNG fleet as its latest chartered LNG bunker vessel. Positioned at the Port of Marseille Fos, this is the first LNG bunker vessel based in France.

Together with Gas Vitality’s sister ship, the 18 600 m3 Gas Agility that is based in the Port of Rotterdam, the Netherlands, both vessels demonstrate the company’s commitment to make LNG bunkering capabilities readily available in key European hubs.

The world needs more energy but with fewer emissions. Jesper Rosenkrans, TotalEnergies Marine Fuels, Singapore, reveals how shipping is reinventing itself and why LNG is the first step on the journey to cleaner and lower-carbon marine fuels.

Figure 1. The 18 600 m3 Gas Vitality, TotalEnergies’ second chartered LNG bunker vessel.

In 2022, TotalEnergies will also begin operations of a third LNG bunker vessel to serve Singapore, where the company is proud to have been awarded an LNG bunker supplier license for a five-year term that started 1 January 2022.

Growing demand for LNG

In 2021, shipping’s transition to LNG is further evident in the continued acceleration of LNG-fuelled ship orders.

According to Clarksons’ October 2021 data, LNG-fuelled vessels represent more than 30% of the total Gross Tonnage on order. This reflects a rising global momentum for shipping companies to take positive action – now – to reduce their environmental footprint by using LNG as their fuel choice.

TotalEnergies forecasts the LNG bunker market could represent 10% of the bunkering market by 2030.

Correspondingly, traction in developing LNG bunkering infrastructure has expanded to facilitate the uptake of LNG marine fuel, with several leading ports and LNG bunker suppliers alike having established key initiatives and made significant progress in support of these developments.

Clarksons records 124 ports with LNG bunkering facilities, up from 93 at the start of 2020, and forecasts this will increase to 170 by 2022. In addition, Offshore Energy also projects that the LNG bunkering fleet will double in size in the next two years.

Today, there are 26 LNG bunker vessels in operation globally and the fleet will grow to 43 units offering an aggregated capacity of between 7 - 8 million tpy by early 2024.

Figure 2. Gas Vitality, the first LNG bunker vessel based in France, arrived at the Fos Cavaou LNG terminal for its inaugural LNG loading operation on 28 December 2021.

Figure 3. Clarksons October 2021 new ship orders.

Collaborations to help accelerate decarbonisation of shipping

TotalEnergies has become involved in numerous coalitions, assocations, and joint studies: z Coalition for the Energy of the Future. z Getting to Zero coalition. z Mærsk Mc-Kinney Møller Center for Zero Carbon

Shipping. z Transition Eco Energétique du Maritime Coalition (France). z Global Industry Alliance, under the International

Maritime Organization (IMO). z SEALNG.

z The Society for Gas as a Marine Fuel (SGMF). z Ammonia Energy Association. z Itochu Joint Study Framework with 34 companies on

Ammonia as a Marine Fuel.

Upholding reliable sourcing and mitigating price risks

With robust demand despite LNG bunker prices having gone on a record surge last year, how should secure LNG sourcing be ensured and affordability for shipping customers maintained?

As the second-largest LNG player globally, TotalEnergies has developed a portfolio right across the value chain aggregating LNG liquefaction, transportation, trading, regasification, and marketing all over the world, with operations in all key LNG market demand areas.

Through the company’s ongoing LNG investment programmes, including its interests in liquefaction plants in Qatar, Nigeria, Russia, Norway, Oman, Egypt, the UAE, the US, Australia, and Angola, TotalEnergies is expected to achieve a global portfolio of nearly 50 million tpy by 2025.

With this integrated LNG business model, it has also enabled TotalEnergies to provide its customers with flexible and secure LNG sourcing and customised pricing solutions.

Is LNG a stepping stone to bioLNG?

As a next step in its evolution, biomethane can provide a viable pathway to achieve shipping’s decarbonisation goal. A study conducted independently by research and consultancy organisation, CE Delft, concludes that bioLNG is a scalable solution for the maritime sector. It also showed that bioLNG will likely be commercially competitive relative to other low-carbon and zero-carbon fuels. In 2020, biomethane production reached approximately 50 TWh globally from the output of 1100 operating plants. This production potential could grow to reach a capacity of 8500 TWh. With an expanding LNG-fuelled fleet, bioLNG can be used without needing to undertake any vessel modifications, and the existing supply infrastructure will still be fit for bunkering purposes with either fuel when bioLNG is scaled up. This will help avoid unnecessary capital outlay for new alternative fuels infrastructure.

TotalEnergies has already begun to contribute to the commercial availability of marine bioLNG. The company’s first

Figure 4. TotalEnergies’ first chartered LNG bunker vessel, the 18 600 m3 Gas Agility, has been operating at the Port of Rotterdam, the Netherlands, since November 2020.

Figure 5. TotalEnergies’ outlook of shipping’s energy mix.

Figure 6. TotalEnergies’ integrated LNG network. chartered LNG bunker vessel, the 18 600 m3 Gas Agility, refuelled the 23 000 TEU CMA CGM Jacques Saadé containership in November 2020, and demonstrated the capability in supplying bioLNG in the bunker mix with the introduction of biomethane for approximately 13% of the LNG delivered. Undertaken through the Guarantee of Origin (GO) certificate mechanism, this marks the shipping industry’s first commercial use of biomethane on this scale. Since then, the company has ramped up this offer to its customers.

Additionally, TotalEnergies is looking at the wider commercialisation of biomethane as part of its greener marine fuels mix and expects the appetite for bioLNG bunkering to grow, as shipowners’ orders of LNG-propelled vessels continue to increase.

As part of TotalEnergies’ work in the Coalition for the Energy of the Future, the company is helping to shape France’s first bioLNG production for shipping. Developed with CMA CGM and Elengy, this major project will transform household waste from the Métropole Aix-Marseille Provence into bioLNG in the port of Marseille Fos. The bioLNG will be used to advance green mobility from the port, notably for CMA CGM’s LNG-powered vessels.

Developing broad solutions collaboratively

The adoption of LNG marine fuel is expected to continue to experience an accelerated growth into 2030. Nevertheless, suffice to say, LNG alone will not be enough to decarbonise the shipping sector. As the industry heads towards IMO2050, there is no doubt that the future of shipping will be comprised of a mix of fuel solutions and the shipping industry will need all of them to meet future fuel demands.

TotalEnergies believes that within this decade (2021 - 2030), the shipping industry will see the practical development and deployment of a variety of bioenergies and hydrogen-based fuels, including e-methanol, e-methane (synthetic LNG), e-ammonia, and e-hydrogen.

The application of these fuel solutions will centre on first-mover initiatives and pilot trials, which are designed to demonstrate the capability of new vessels in using these fuels.

Finally, the market’s scaling up of hydrogen-based fuels is likely to materialise between 2030 and 2040, in line with the ramp up of electrolysis to commercial levels.

Moving shipping into a net-zero carbon future will require collective action with stakeholders throughout shipping’s ecosystem, as well as cross-industry collaborations. TotalEnergies’ active participation in various shipping and cross-industry initiatives and coalitions underscores its commitment to support shipping’s decarbonisation goals and to help accelerate the development of future fuels.

In May 2020, TotalEnergies publicly declared the company’s ambition to get to net zero emissions by 2050, together with society, for all its operations worldwide, from production to the use of energy products sold to its customers. In line with this climate ambition, TotalEnergies Marine Fuels is also leveraging on the company’s low-carbon investments and R&D capabilities to intensify its investigation into these future solutions.

The bottom line is: everyone has a part to play in not just the ‘here and now’ of cleaner marine fuels, but in the sustainable development of tomorrow’s carbon-free shipping future.