INTERVIEW: Fratelli Cosulich fast-tracks green marine fuel supply plan in Singapore, Europe

Italy's bunker company Fratelli Cosulich is fast-tracking its growth in the alternative marine fuels segment as it aims to order methanol bunker barges in the Port of Singapore and supply biofuel bunkers in Genoa later in 2023, a company executive said.

"We want to be a relevant player as energy transition gathers pace and the idea is not only to expand fleet but to also use it to cater to new alternative fuels," Guido Cardullo, head of business development at the Genoa-based company, told S&P Global Commodity Insights in an interview April 17.

The company is already in discussions with methanol producers to secure green methanol for its upcoming barges in Singapore, Cardullo said. "We hope to make some investment in this direction [by ordering methanol bunker barges] by the end of this year."

Some industry players have cited an absence of ample green methanol supply, uncertainty related to its availability for the shipping sector, its high price, and a lack of operational standards as impediments to its widespread uptake, Cardullo said.

However, methanol as a bunker fuel provides significant environmental benefits, Cardullo said.

"Shipping is giving a clear signal that there will be demand for methanol bunkering," with its prospects as a marine fuel improving drastically, particularly in the container shipping segment, after major shipping companies, such as Maersk and CMA CGM, have decided to invest in methanol powered ships, Cardullo said.

Meanwhile, Singapore, the world's largest bunkering port, has been at the helm of various green shipping initiatives, Cardullo said.

"We hope to see some well-defined standards for methanol bunkering in Singapore and significant volumes by 2025," he said.

While methanol bunkering is gaining traction, it still lags LNG bunkering, which is much more developed currently, Cardullo said.

LNG bunkering

Fratelli Cosulich has already invested in LNG bunker barges, with the company announcing the launch and christening of the first of its two LNG small scale and bunker vessels in March.

The company's first bunker tanker -- Alice Cosulich -- has a 5,300-dwt capacity and can carry 8,200 cu m of LNG and 500 cu m of marine gasoil, Fratelli Cosulich said in a statement in March, adding that its delivery is scheduled for September.

As the project contributes to the decarbonization of maritime transport through the implementation of LNG bunkering solutions in the Mediterranean Sea, it has been given some funding by the European Union under the Connecting Europe Facility, or CEF, program, Cardullo said.

Meanwhile, the delivery of the company's second bunker tanker is scheduled for January 2024, he said.

Some major ports, such as Singapore and Rotterdam, had witnessed a significant decline in LNG marine fuel sales in 2022 as prices skyrocketed due to the Russia-Ukraine war.

However, LNG prices have fallen in 2023, making them more competitive to MGO in several places. So, there will likely be an increase in LNG supplies at major ports this year, Cardullo said.

In addition to LNG bunkering, Fratelli Cosulich has also successfully carried out a biofuel bunkering trial in February with a B10 solution, Cardullo said.

"We will market this blend in Genoa by the end of the year," he said.

The company has completed an ammonia bunkering feasibility study and is waiting for more clarity from engine manufacturers on ammonia propulsion before advancing plans for an ammonia-fueled bunker barge, Cardullo said. Prototypes are expected by 2024, Cardullo said.

IMO needs to act

The EU is leading from the front to impose limits on carbon emissions, with the EU Fit for 55 Package and its initiative -- the EU Emissions Trading Scheme, or EU ETS -- headed in the right direction to accelerate shipping's decarbonization goals, he said.

Under the EU ETS scheme, a limit is placed on the right to emit specified pollutants over an area, and companies can trade emission rights within that area, helping to curb greenhouse gas emissions.

"However, it would have been much better if such initiatives had been taken by the IMO [International Maritime Organization] at a global level," Cardullo said, noting that there must be clearly defined and uniform incentives worldwide for maritime players to adopt cleaner fuels.

Cardullo said he was hoping to see a breakthrough at the IMO's July Marine Environment Protection Committee -- MEPC 80 -- in terms of moving to a well-to-wake approach for shipping's decarbonization, from a current tank-to-wake focus.

"This is very much needed during that crucial meeting, and I hope they make some progress there," he said.

Fratelli Cosulich's 2022 bunker sales stood in the 5.5 million-6 million mt range, Cardullo said. Singapore is the company's biggest bunker market, he said. In Asia, the company is aiming to expand its trading operations in South Korea and China this year, he added.