Wold was speaking in a panel session of the IBIA Annual Convention 2023 in Dubai last week. Image Credit: Ship & Bunker
The levels of capital expenditure needed to shift into trading in alternative fuels could drive consolidation in the bunker industry, according to classification society DNV.
Martin Wold, principal consultant in DNV's Maritime Advisory business, was speaking in a panel session of the IBIA Annual Convention 2023 in Dubai last week.
"I think the transition to alternative fuels really entails huge capital investments, so that is obviously going to drive consolidation in the markets ... with respect to longer-term commitments and offtake agreements," Wold said.
"That's going to impact the dynamics of this market, which is quite short-term at the moment."
While conventional bunker barges can deliver biofuels with little modification, and retrofits to handle methanol would be likely to cost only a few hundred thousand dollars, barges delivering LNG or ammonia would come at a cost of tens of millions of dollars. Additional investments would also be needed for crew training, storage, safety equipment and a variety of other costs.
The world's largest bunkering firms are likely to be able to take on these costs, particularly after last year's record profits, but smaller firms may struggle to keep up with the necessary spending.