INTERVIEW: New Quadrise CEO Seeks to Expand Emulsion Fuel Trials

Peter Borup took on the role of Quadrise CEO as of October 1. Image Credit: Quadrise

The new CEO of technology firm Quadrise is seeking to expand trials of the firm's emulsion fuels in the shipping industry.

Peter Borup took on the role of Quadrise CEO as of October 1, having previously served as CEO of Norvic Shipping International from 2018 to 2020, and president of Lauritzen Bulkers from 2013 to 2018.

"I don't think there's a need for any change in strategy; I think we have a fairly good one," Borup said in an interview with Ship & Bunker.

"But maybe our execution can change a little bit as we have more hands on deck now.

"Having a test lined up with MSC - you can't really beat that in terms of recognition and credibility - but there's also no reason not to have two or three other trials run at the same time, so we can do that concurrently.

"What we have added now is bandwidth, and we intend to use that."

Quadrise uses its MSAR technology to emulsify bunker fuels with water, producing a fuel with lower emissions by mass. The firm's bioMSAR process works on a similar principle, but with bio-feedstocks added to deliver further GHG savings.

The fuels produced using this technology burn more efficiently in engines, as well as coming with a reduction of 20% or more in NOx emissions and near-zero black carbon emissions.

The firm is hopeful that a commercial-scale trial of its technology with shipping firm MSC - previously scheduled for the third quarter of this year - will be launched soon, Jason Miles, chief technology officer at Quadrise, said in the interview.

Jason Miles is chief technology officer at Quadrise. Image Credit: Quadrise

"Sometimes you have to wait in a queue with these companies, it just takes a little bit longer to get agreements through the legal process," Miles said.

"We're in a live conversation with the counterparties on a weekly basis, but there's no guarantee.

"Some of the discussions are around commercial scale-up beyond the trial, as this will be a big business going forward, so how can we prepare for this in the future. We're trying to focus on getting the trial under way."

Return on Investment

The firm bills its technology as paying back a relatively small initial capital expenditure on engine conversion within a year. The conversion can be carried out while a ship is in service.

"There's an investment needed to supply a separate fuel booster unit, and that's anything from $250,000 up to maybe $500,000 in terms of its cost," Miles said.

"And then if you think about a vessel that might be consuming, let's say, 10,000 tonnes a year of fuel oil, typically paying $500 per tonne today, then there's a saving to be made on that fuel.

"Depending on what the fuel is, there's a delivered price saving of about 10%, and potentially with an energy efficiency benefit of another 5%.

"So with the 15% saving on fuel cost, there's enough money to basically repay that investment cost in a year."

Shipping Demand

Container lines with predictable schedules are seen as the biggest potential consumers of MSAR and bioMSAR, but other segments also show potential.

"Beyond the container or liner space, which is obviously an important sector for us in terms of the B2B bunker transactions in the main hubs, there are many other large consumers," Miles said.

"For instance in the cruise industry, where their requirements are quite specific and customer-led in terms of having greener cruises.

"That's really a high-sulfur fuel, and a B100 opportunity for us is quite a lot of demand, especially around the Med, shifting from low-sulfur fuel towards MGO; that makes the differential to B100 a lot less.

"And the bulkers and the tankers that are on a more certain route, there's definitely an opportunity there."

Newly emerging carbon markets are also adding to potential demand sources, Borup said.

"You're already seeing big players like my former employer, Norden, who have announced about a month ago that now by bunkering biofuel in Singapore for trips into Europe, they can sell their credits to people like IBM and Microsoft at 340 euros per tonne of CO2," he said.

"That's a decent market to be in. I don't think the liquidity and depth is really there yet, but there is a market there."

Beyond shipping, the firm's technology can also be used in the power generation industry.

"These two markets complement each other quite well," Borup said.

"The power generation are really very large clients, but it's complex and time-consuming to get them where shipping is."

Long-Term Demand

Looking at the longer term, the prospects for MSAR technology used in marine fuels are likely to be tied to the prospects for conventional marine fuels themselves, as well as those for biofuel blends.

But the firm sees a long potential window for products made using its technology to take a share of the marine energy mix.

"There's competition, but I do think that the window is rather long for us, and we have time to develop and improve our own technology," Borup said.

The incorporation of biofuels into emulsion marine fuels provides a long-term potential demand source for MSAR technology, Miles added.

"If you look to the projections for biofuels in the shipping industry, they didn't even hit the radar three years ago, and now they are a feature of bunker demand in Rotterdam and Singapore in quite significant volumes," he said.

"I think that there's a very good opportunity for biofuels to reach a certain volume and then probably sustain that.

"What we're focusing on is coming up with a lower-cost biofuel, which is as close to a drop-in as you can do without having to do major modification."

The firm is also developing on-board blending for MSAR and bioMSAR. These systems, alongside vessel retrofits, were part of a collaboration agreement signed with fuel systems company Auramarine a year ago.

"Other than the terminal supply of fuel, which is the main business that we would use, there's also the blend-on-board system that we're looking to test out as well," Miles said.

"We've got a smaller-scale trial geared up for that at the moment, but we're involved in some EU projects that would basically implement that technology as well, to look at the onboard blending of not only conventional fuels to give you the energy savings, but also the biofuel components."