Alternative fuel bunkering: Market due diligence in a major port

Background

• Drewry was appointed to analyse and recommend the optimal alternative fuel pathway for developing new bunkering infrastructure

Client Objectives

The study included:

• Understanding various emission regulations in the maritime sector and their implications for the demand of alternative fuels.
• Analysing the pros and cons of major alternative fuels to understand the feasibility of different fuels for various sectors depending on their vessel sizes.
• Analysing the plans/strategies of other ports in the region, which required primary and secondary research.
• Analysing the potential for alternative fuel bunkering in the target port after considering various drivers like trade patterns, commodity types as well as nearby industries.
• Provide global, regional bunkering alternative fuel demand forecast till 2050, considering competition in the region. Forecast these volumes for target port.
• Understanding the country’s vessel bunkering policies.

Drewry carried out primary research at different ports in the region to gather information about their plans for alternative fuel bunkering and the challenges they face.

Results, conclusions and recommendations

Drewry analysed different types of fuels and their uptake to determine the most suitable recommendation for the client. The study covered the following areas:

• Introduction to global and local regulations
  • Emissions Trading System
  • Global maritime decarbonisation regulations and their impacts
  • The country’s bunkering policy
     
• Matrix to determine the ranking of fuels based on:
  • Sector of the vessel
  • Size of the vessel
     
• Analysis of existing trade patterns of the target port
  • Analyse trade patterns to better understand port practices
     
• Review of plans/strategies of the nearby ports
  • Conducted interviews with major global port operators/authorities to analyse best practices and industry opinions
  • Analysed green corridor initiatives in the region
     
• Forecast of bunker fuel demand globally, as well as in Asia and the target country
  • Forecast global fleet, alternative fuel vessel fleet, fleet of retrofittable vessels and vessels with ‘ready’ status
  • Forecast the demand for various fuels like LNG and methanol based on different uptake scenarios till 2050
  • Hinterland analysis of existing and planned bunkering facilities to determine expected incremental growth in bunkering operations of the target port