Shipping’s energy transition – the role of biofuels and carbon offsets

In an interview with Seatrade Maritime News, Høll said that a year ago KPI OceanConnect set up its alternative fuels and special projects division as the bunkering company saw a “huge need” to gather information and work with partners on questions they had on the energy transition.

Two areas that the new division has worked on with clients and partners are carbon offsets and biofuels. Høll says the company did one of the first carbon offset deals in the industry in the spring of last year in a voluntary offset transaction.

Moving into areas such as carbon offsets KPI OceanConnect needs to ensure that offset units that are bought are verified, and that the partners it works with are properly vetted.

“So, it's an area where a lot of our clients are still looking for advice and are still in a wait and see position. So, for me, I see our alternative fuel and special project division, also as a sparring partner, and we are the ‘go to partner’ if they have questions around offsets,” he explained.

Carbon offsets look set to have a role to play when shipping becomes part of the European Emissions Trading Scheme (ETS) from the start of 2023. He says they don’t yet have the full picture of the impact of the ETS but it will definitely have a cost that will need to be compensated for.

Related:Podcast: In conversation with Søren Høll, CEO of KPI OceanConnect

Høll sees a similar picture of working with clients and suppliers in terms of developing biofuels for shipping.

It is not just owners seeking to use biofuels to reduce the carbon footprint of their vessels, but also suppliers from other sectors seeking to enter the maritime market. For example, a company that traditionally supplies biofuels in land-based markets can partner with KPI OceanConnect to build a new business in shipping as they are not known as suppliers in the industry today.

For shipping companies biofuels are still in the trial phase and KPI OceanConnect expects to see a number of its clients doing smaller contracts with biofuels due to limited availability. “It’s definitely an area that is developing,” he said.

Høll sees it as process of gaining knowledge that can be shared with partners both on the client and supply side of the business.

While putting a strong emphasis on the future Høll stressed that the company was still very much working with the fuels available today. “The fossil fuels, the conventional fuels, will still be there for a number of years. So, we still have a business run today, but we build definitely on that for the future,” he stated.