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Price the biggest challenge in adoption of alternative fuels: Eaglestar

The pricing difference to conventional fuels is the biggest challenge facing the adoption of greener fuels by shipping companies, according to the chief of MISC’s shipmanagement company Eaglestar.

Marcus Hand, Editor

May 29, 2023

3 Min Read
Captain Peter Liew 2023 (1)[23]
Capt Peter Liew, Managing Director/CEO, EaglestarPhoto: MISC

Eaglestar has been one of the frontrunners in operating LNG dual-fuel tankers for MISC tanker company AET.

Speaking to Seatrade Maritime News at the Langkawi International Maritime & Aviation exhibition, Capt Peter Liew, Managing Director/CEO of Eaglestar, noted the technology for LNG-fuelled ships had been around many years with LNG carriers using it as a fuel as well as carrying it as a cargo.

The company started managing its first LNG dual-fuel aframaxes for AET in 2017 and was able to gain from the experience of its parent in the operation of LNG carriers. While Capt Liew admits there some teething issues he says they are very comfortable operating such dual fuel vessels today.

In total Eaglestar now manages 13 LNG dual-fuel tankers, and will take delivery of further three VLCCs in the next year or so.

However, even though the vessels can be powered by LNG and have crew fully trained to do so this does not mean that it is actually being used a fuel to the huge price difference with conventional fuels.

“The biggest challenge today is on the price of LNG compared to conventional fuel,” he stated.

The price of LNG skyrocketed following the Russian invasion of Ukraine making its use as maritime uneconomical for dual-fuel vessels. At the end of April Capt Liew said just two of its 13 dual-fuel tankers were using LNG as a fuel, although this number has started to increase over the last month as the price has come down.

Related:87% of seafarers say training needed for handling new fuels

“We are very supportive of LNG dual-fuel as an alternative fuel and ammonia or methanol, or other fuel that has lower or zero carbon emissions, but the market has to be fair so that everyone is able to burn them. So, the field will have to be level first,” he explained.

This could take the form of a carbon tax, carbon levy or other instruments to reduce the price gap. Capt Liew said that most importantly it has to be applied sustainably and equitably across the industry.

Looking at the impact of the price gap he takes the case of ammonia as a fuel, which MISC is developing as part of the Castor Project. “Even if green ammonia is available today, and the technology is available today, one will be wondering whether people will be burning ammonia fuel, because it's so expensive compared to conventional fuel, and nothing is stopping conventional fuel being used. So, what is the motivation for the owners?” he asks.

“In my opinion, the greatest challenge is not so much the technologies, it's not so much about the availability of the greener field, it is the price difference.”

Related:Methanol leads February alternative fuel vessel orders

In terms of operating dual-fuel vessels whether they be LNG, methanol, ammonia, or another fuel, additional training of seafarers is an absolute must. “There is no shortcut, you have to train your crew and reskill them,” Capt Liew stated.

As to whether experience in operating LNG dual-fuel vessels will help with the move to other types of alternative fuel he said it would help to some extent but there would still be specific training requirements. “It does help a little bit, but additional training is still required as the properties of ammonia are totally different from LNG.”

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About the Author

Marcus Hand

Editor

Marcus Hand is the editor of Seatrade Maritime News and a dedicated maritime journalist with over two decades of experience covering the shipping industry in Asia.

Marcus is also an experienced industry commentator and has chaired many conferences and round tables. Before joining Seatrade at the beginning of 2010, Marcus worked for the shipping industry journal Lloyd's List for a decade and before that the Singapore Business Times covering shipping and aviation.

In November 2022, Marcus was announced as a member of the Board of Advisors to the Singapore Journal of Maritime Talent and Technology (SJMTT) to help bring together thought leadership around the key areas of talent and technology.

Marcus is the founder of the Seatrade Maritime Podcast that delivers commentary, opinions and conversations on shipping's most important topics.

Conferences & Webinars

Marcus Hand regularly moderates at international maritime events. Below you’ll find a list of selected past conferences and webinars.

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