FEATURE: What We Learned From SIBCON22

Sibcon is the world's largest bunkering event with as many as 1,800 participants. Image Credit: Ship & Bunker

At SIBCON last week, the world's largest bunkering hub gathered marine fuel executives from across the world for a discussion of the agenda the industry faces over the next two years.

Singapore had just short of 50 million mt of conventional marine sales last year, and its flagship event for the bunker industry -- returning in person for the first time since 2018 after COVID-19 made the 2020 event a largely online affair -- brought more than 1,800 delegates to the city-state.

The first thing to note there was that the decarbonisation agenda now crowds out almost every other theme; all company branding at the event emphasised green credentials, and panel sessions on every topic turned sooner or later into a discussion of the future energy mix. A newcomer to the industry could have left with the impression that alternative fuels already took up a majority of bunker sales.

The general mood among delegates was an upbeat one. With the record bunker prices seen over the summer, as well as high demand for the various fuel-efficiency, decarbonisation and digitalisation products on offer to the shipping and bunker industries, few companies represented at Sibcon can have lost money this year.

How well these companies will fare in the face of what could be an upcoming global recession remains an open question, but this issue has apparently yet to dent the industry's optimism.

Singapore's Standards

Singapore wants to be seen as the grown-up in the room when it comes to the global bunker industry's standards.

A decade ago it didn't have this reputation, with cappuccino bunkers and other shady practices generally thought to be widespread in its market. But since the introduction of mandatory mass flow meters from 2017 and other bunkering standards over the past few years, the city-state has shifted into a global leadership position where other authorities look to it for guidance.

The next step in this process will now be the digitalisation of the bunker industry.

The Maritime and Port Authority has now set out its timetable, with the first phase being introduced from the first quarter of 2023, and the second phase a year later.

The most important development here was the MPA hinting at the use of digitalised bunker operations becoming mandatory. The MPA has yet to set out its timeline for this, saying only that it would come in 'at appropriate milestones', 

Barge operators will need CAPEX of about $20,000-30,000 per barge to install next-generation data loggers on their vessels to aid with the process, but, as with mass flow meters, Singapore's authorities will provide financial support with the change. This has also yet to be formally decided, but an MPA representative told Ship & Bunker it would be likely to be around 50% of the cost.

With digitalised bunker operations becoming the norm in Singapore within the next few years, it won't be long before these services are in much wider demand elsewhere in the world.

Focus on Biofuels

Biofuels were another significant focus of the event.

The city-state has seen about 70,000 mt of biofuel bunker blend sales so far this year, and one panel session backed the possibility of this total reaching 5 million mt/year by 2030. 

With this expansion in the market under way, Singapore has developed a bunker quality standard for biofuel blends for the market to use to make sure the fuels sold are appropriate for use in ships.

A market source told Ship & Bunker that a concern that the ISO would take some time to develop such a specification may have prompted the move.

A development to watch for will be whether bunker buyers in other parts of the world seek to apply this Singaporean standard to their purchases.

Decarbonisation Agenda

Beyond biofuels the various other alternative fuels were also discussed in detail at Sibcon. 

LNG bunkering supporters received a strong vote of confidence from Chee Hong Tat, Singapore's senior minister of state for finance and transport. 

It was notable to see Chee go out of his way in his opening address to echo the arguments for LNG put forward by its backers. Any LNG opponents waiting for a moment where the world's regulators unite against this fuel appear unlikely to get much help from Singapore.

Methanol continues to go from strength to strength after container line AP Moller-Maersk boosted the market with its choice of methanol propulsion for its first carbon-neutral vessels. At least two more shipping firms at Sibcon -- Berge Bulk and Cargill -- came out as likely adopters of methanol propulsion in the coming years.

But energy producer Shell struck an uncertain tone on methanol in comments to Ship & Bunker, warning that it will be able to be competitive on price only if industries other than shipping also take on methanol as a future energy source.

Finally, ammonia was under widespread discussion, but mostly still at the theoretical level rather than with concrete projects in progress. Ammonia's safety issues continue to spook some in the shipping and bunker industries, and firmer words of support from regulators and large shipping companies on their confidence that it can be handled safely before it can receive wider interest.