INTERVIEW: Singapore's EMF steps up decarbonization, to include LNG bunkering in portfolio

Singapore's top bunker fuel supplier, Equatorial Marine Fuel Management Services, is riding on a wave of decarbonization initiatives that include promoting the supply of methanol, biofuels, ammonia and LNG as marine fuels in the city-state, its executive director Choong Zhen Mao told S&P Global Commodity Insights in an interview.

In 2023, marine fuel sales hit a record high of 51.82 million mt at the port of Singapore, the world's largest bunkering hub, latest data from the Maritime and Port Authority of Singapore showed, up from the previous record of 50.64 million mt registered in 2017.

"We are keeping our doors open as a multi-fuel future evolves ... However, we do see a different level of traction for different fuels," Choong said.

EMF is building four IMO Type II Chemical and Oil Tankers of 8,000 DWT each that will be capable of carrying both methanol and biofuels with up to B100 blends, Choong said.

"We are taking a broad approach to multiple fuels, keeping in mind that methanol and biofuels are gaining more popularity," he said.

Of the four bunker barges, the first two are scheduled for delivery to EMF by the end of this year, Choong said.

In terms of securing methanol supply, EMF is "talking to some people" Choong said. However, there was a need to strengthen the entire supply chain within the marine ecosystem to make methanol more readily available, Choong noted.

The company is also working with a partner to include LNG bunkering in its product portfolio, he said, sharing that of EMF's current bunker sales, about 20%-25% consists of marine gasoil, 30% is HSFO with the remainder being LSFO.

Last year, EMF also set up a Sustainable Energy business unit to become an active contributor to maritime decarbonization as Singapore progresses a raft of green shipping initiatives, Choong said.

Meanwhile, EMF has also started offering carbon credits while supplying fuels. "We are able to offer carbon credits to customers to offset well-to-wake, Scope 1, Scope 2 and Scope 3 emissions," he noted.

The company operates 20 bunker tankers presently, Choong said.

The company has also continued its endeavor in storage solutions. One of these efforts has been to convert one of its floating storages to handle marine gasoil late last year, he said.

"We were looking for a way to augment a steadier supply chain for our customers given the volatile market conditions. We hope to provide for better availability and integrity with more of our products," he shared.

In addition to its decarbonization initiatives, EMF has embarked on progressing digitalization solutions, Choong said.

In November 2023, EMF said it had collaborated with Carbon Management Solutions, or CMS, and the Singapore Trade Data Exchange, or SGTraDex, for a bunker fuel transaction.

EMF was ranked as Singapore's top bunker fuel supplier by sales volumes in both 2022 and 2023, according to MPA data.

Geopolitics, global headwinds

The Middle East situation seems no longer as contained as people thought it would be initially, as evidenced by the events at the Red Sea, Choong said.

Around 12% of global trade passes through the Suez Canal, representing 30% of all global container traffic and over $1 trillion worth of goods annually.

Some of the world's biggest container shippers have already suspended shipping via the chokepoint. Diverted ships have usually taken the longer Cape of Good Hope route, which can add about 14-20 days to voyage times, industry sources said separately.

"We are closely monitoring the situation to determine how shipowners are going to move cargo and whether this change will be long term or ad hoc . . . We are also watching where they will take bunkers," Choong said.

"But that's not the only complexity. Markets are softer this year, interest rates are still high, and trade is slowing a bit," he said, noting that some trades have moved to become more region-centric instead of what was usually a global trade.

This has impacted the size of ships put into action, which, in turn, affects the bunker parcel sizes and invariably the frequency of bunker stems, Choong noted.

As a result of the rerouting, South African ports will likely witness increased bunker fuel demand, according to him.

However, he thought that as ships reroute, ports in the Middle East such as Fujairah may benefit less in terms of additional refueling demand because of the volatile situation in the region.

Some industry players said that a multi-fuel future would lead to the evolution of many more bunkering hubs worldwide. Others pointed to ports in China becoming increasingly dominant because of their trading needs.

While this may happen, Choong stayed unfazed about Singapore's dominance as a global bunker hub.

"When we look at the current geopolitical tensions and shipping economics, Singapore remains a good bunker option. This is especially so when shippers typically require multiple shipping services during their port stay," he said.

In addition to Singapore's strategic geographical location, its strong infrastructure, transparency of rules and their strict implementation, and efficient services hold it in good stead, he added.