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Fuelling ships is about to take on many new layers of complexity that will change marine fuel procurement beyond recognition, Sandi Ennor, chief executive of US bunker brokerage Transparensea Fuels, tells Splash Extra. The energy transition will require shipowners and operators to make more considered decisions about potentially multiple new fuels – based on the profile of their vessels, fleets and trading routes, which could be from varied and often unfamiliar suppliers, all with different properties and applications. "Buyers will need significantly more detailed information and guarantees around fuels’ specifications, origins and physical availability. As we know, the marine fuels industry isn’t renowned for its transparency or global consistency, which places more emphasis on adapting and developing outdated working practices throughout the supply chain, as well as developing global bunkering infrastructure," Ennor says. LNG, methanol and biofuels are currently leading the alternative fuel charge. Ennor observes that most LNG bunkering has been vessel and port specific with little or no spot activity. And, while LNG prices have dropped, the bunkering infrastructure is still limited. With biofuels or renewable diesel, conventional bunkering practices can, for the most part, apply to the physical bunkering of these products, but the supply available to the marine market is either unavailable or cost prohibitive. Meanwhile, the bigger shipowners are developing exclusive arrangements with downstream suppliers located around the world with little or no proximity to ports. "As these ships are delivered, there needs to be some arbitrage in the fuels market for the real transition to happen," she says. Ennor started Transparensea Fuels following a 10-year career that has spanned the marine fuels landscape. Prior to entering the bunker market, she served as a helicopter pilot in the US Navy and is a US Naval Academy graduate and decorated combat veteran. Ennor is currently serving as the president of the Connecticut Maritime Association and is an active WISTA member. She finds that several things beyond cost and infrastructure need to be addressed to successfully supply alternative bunkers to ships in the future. Fuels’ specifications will need to be closely watched, Ennor stresses, as for LNG, for example, the calculation of the methane number is still not codified or agreed upon, while for methanol, which can have various iterations, this is going to depend on how it is produced. "Without transparency at every step, you are at risk of having off-spec problems from the start," she argues. For her, traceability also needs to be robust, and ensuring the feasibility of physical supply is also a huge factor. "Fuel buyers need to be sure that what they’re using delivers the necessary emissions reductions and that the origin or composition of the fuel doesn’t compromise any of their other sustainability commitments," she says, adding also that the company has been aware of "disparities between what’s available on paper and what is actually available at the time, at the right volume and specification." Customers looking to transition to any of these new fuels must look at their own fleet and make the decision based on what works for them, Ennor advises, while observing many fuel buyers looking at offsets and a mass balance approach in lieu of actual supply. She reckons that not only do buyers need to work with brokers and suppliers to re-evaluate how the fuel is handled, they should also query the overall impact these changes have on commercial agreements. "Essentially, the market should be scrutinising and re-writing the contracts that we’ve been working with for decades to reapproach factors such as specifications, volumes, quality and bunkering service levels," Ennor says. For her, it is still too early to place firm bets on any of the future fuels as viability and selection depend on so many factors, including regional regulatory frameworks, the development of infrastructure and finally how the International Maritime Organization will implement the revised greenhouse gas emissions strategy. Ennor also finds it difficult to say whether the industry has reached peak conventional bunker demand but questions whether it really matters. "We can consider whether an increase in global trade will keep up some of the demand for traditional fuels in the near term, but either way, we’re looking at a very different market over the next decade based on the combination of new fuels coming into the market, energy efficiency technologies and carbon offsetting,” she says. Ennor sees investment needed throughout the entire bunker supply chain, but that the industry is also currently a "patchwork" of evolving localised regulation and initiatives that is creating a multi-tiered sector of the "haves and have-nots” in terms of direction and financial incentives. "In such a globally symbiotic industry as shipping, this level of fragmentation simply won’t work,” she insists. "We need a single and defined international representation that consolidates requirements and sets a clear sense of direction that influences and helps shape individual governments’ regulatory and fiscal policies. We know that this is a long game but it's the cornerstone of encouraging investment in commercial infrastructure," Ennor notes. Shipping companies in all sectors and of all sizes need to start planning now, advises Ennor, adding that besides looking ahead at fuel choice and procurement, it’s important that employees are brought on the journey, from crews to shore-based teams. This emerging situation puts traders and brokers in a real position of trust, Ennor notes, as some could potentially look to exploit this, but those who try to won’t survive in the long run. In concluding, Ennor stated: "Shipping companies have to now see the procurement and purchasing of fuel as a critical strategic decision-making process within the context of the commercials and sustainability of their operations. This provides the ideal moment for fuel brokers to finally come of age."

Welcome to the multi-fuel universe

Sandi Ennor fromTransparensea Fuels gives readers a heads-up on the realities of bunker buying in the future.

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