COS Weekly Newsletter - Friday, 13 May 2022
Parkland announces $600 million expansion
Parkland Corporation has announced plans to increase renewable fuel production at its Burnaby Refinery as part of its commercial decarbonization strategy, enabling the supply of low carbon products and services. Plans include expanding existing co-processing volumes to approximately 5,500 barrels per day, and a new stand-alone renewable diesel complex capable of producing approximately 6,500 barrels per day of renewable diesel. It is estimated that these projects will require an investment of approximately $600 million, with the majority of capital investment expected to be deployed in 2024 and 2025.
The announcement follows collaboration with the Government of British Columbia and supports the Government’s ambition to achieve net-zero emissions by 2050. Parkland has received BC Government support for over 40 percent of the project costs in the form of BC Low-Carbon Fuel Standard Compliance Credits. The expansion will also create up to 1,000 jobs in its construction phase. A final investment decision will be made in the second half of 2023, with production expected to begin in 2026.
Maersk deployment upgrade
Maersk is redeploying two 3,600teu ice-class 1A vessels, Vistula Maersk
and Vayenga Maersk
, to the Canada Atlantic Express service between Canada and Northern Europe. (North Europe to/from Canada) replacing existing vessels. The ice-class vessels’ propeller and rudder design has been optimized for the lowest fuel consumption. The vessels will utilize biofuel, which is carbon neutral and is manufactured from recycled sustainable biomass. The deployment change will provide Canadian customers with green logistics solutions and is a step towards Maersk's carbon neutrality by 2040.
James Point joins SAAM Vancouver fleet
SAAM Towage welcomes the SAAM James Point
, to Vancouver after completing its loading operation onto the cargo ship BBC Moonstone in Halong Bay, Vietnam. The new Damen 2312 tug is named after respected Musqueam Point Family Patriarch, James Point. Born shortly after confederation, he was a fisherman, who worked the Fraser River, and up and down the coast. He was a well know lacrosse player in his youth. Featuring an innovative DAMEN ASD2312 design, this tug was acquired from the Dutch company DAMEN and built at its Song Cam shipyards in Vietnam. Measuring 23 meters long and 12 meters in beam, it boasts 70-bollard pull capacity, Kongsberg azimuth thrusters and two CAT 3512C IMO Tier III main engines, which enables it to operate in emissions control areas (ECA) since it meets standards from the International Maritime Organization for nitrogen and sulphur oxide emissions.
Expert panel findings on plant health risks
The Canadian Food Inspection Canada has released recent findings from an expert panel on plant health risks in Canada. Plants are critical to Canada as agriculture and forestry account for 500,000 jobs and over $90 billion in annual exports. Plants face many threats, such as rising temperatures, changing precipitation patterns, extreme weather events, disease, and new predators, all of which have been exacerbated by climate change, the global movement of people and goods, and evolutionary processes. The report, Cultivating Diversity,
examines the existing and emerging risks to plant health in Canada and offers insights into promising practices that may help to mitigate them. The report focuses on key areas of risk, rather than specific risks, as well as strategies to reduce vulnerability and increase resilience. On a related note Canada joins the United Nations and countries around the world in recognizing the first International Day of Plant Health
MARAD provides record funding to ports
The US Department of Transportation added $234.3 million to its previously announced $450 million this year for port infrastructure investments through the Maritime Administration’s (MARAD) Port Infrastructure Development Program. The $684.3 million is the highest level of funding ever made available for the program. The grants which are awarded on a competitive basis go to projects that improve the safety, efficiency, and reliability of the movement of goods into, out of, around, or within a port. Coastal seaports, inland river ports, and Great Lakes ports are eligible to receive funding and this year the program was expanded as part of the infrastructure law passed by the US Congress to include projects that reduce or eliminate port-related criteria pollutant or greenhouse gas emissions.
Last year’s program awarded $241 million in funds to 25 projects to improve port facilities in 19 states and one territory. Among the largest grants were $52 million for a rail expansion project at the Port of Long Beach, $18 million toward the expansion of Houston’s Bayport Container Terminal, nearly $16 million to Tacoma for an off-dock container storage facility, and nearly $15 million to Brunswick, Georgia for the development of a fourth Ro-Ro berth for the auto industry. Other projects supported the developing offshore wind industry with $29.5 million for the wind tower port manufacturing project in Albany, New York, and $20 million for Portsmouth, Virginia’s development of the Marine Terminal to stage wind turbines and other materials. Smaller grants addressed inland ports and navigation.
Diesel supply impacting US trucking
According to several trade publications, diesel supplies on the US East Coast are now the lowest in almost 20 years and some are saying that diesel is now surpassing labour as the industry's No. 1 expense. Reduced diesel supplies out of Russia combined with a loss of US refining capacity could have a devastating impact on the supply chain. Refinery utilization nationwide was at 90% last week. That is right about in the middle of where utilization has come for the first weekly report of May over the past six years, excluding the pandemic-related operations of 2020. The EIA, in July of last year, said it had removed six refineries from its permanent base of refining capacity. While that can be offset by capacity expansions and de-bottlenecking elsewhere, the end result is that even at full capacity — and the nation’s refining system never operates at 100% — there is less capability to produce refined products in the US than there was two years ago. The average price for a gallon of diesel fuel in Ohio reached a record $5.24 for the state. Semi-trucks can carry between 120 and 150 gallons of diesel fuel and to fill a quarter of a tank costs can range between $900-$1,100.
EU coordinates efforts to move Ukraine's grain
The European Commission is in a race against time to help shift Ukraine's grain by end of July to meet demand and free up silo capacity for the next harvest. 75 percent of Ukraine's grain production is exported and accounts for approximately 20 percent of the country's export revenue. The European Commission is stepping with its EU-Ukraine Solidarity Lanes
strategy to unblock borders with Ukraine and boost capacity on road and rail routes to export Ukrainian grain, while also sourcing vessels and free warehouse capacity inside EU countries to store excess produce. The scale of the challenge is huge. Earlier this month, a ship carrying 70,000 metric tons of Ukrainian cereals left the port of Constanța in Romania — it had to be supplied by 49 barges and trains running across the border. The Commission aims to move almost 300 times that much freight in less than three months.
Allianz report highlights concerns re cargo fires
The maritime industry’s most anticipated annual report on incidents and casualties, Allianz’s Safety & Shipping Review 2022
, is out with a special supplemental section dedicated to the Ukraine war. The report identifies cargo fires as a priority concern. There have been over 70 reported fires on container ships alone in the past five years, the report notes. Fires often start in containers, which can be the result of non-/mis-declaration of hazardous cargo, such as chemicals and batteries – around 5% of containers shipped may consist of undeclared dangerous goods. Fires on large vessels can spread quickly and be difficult to control, often resulting in the crew abandoning ship, which can significantly increase the final cost of an incident. Fires have also become a major loss driver for car carriers as well, and sustainability concerns driving up costs of salvage and wreck removal. When large vessels get into trouble, emergency response and finding a port of refuge can be challenging. Specialist salvage equipment, tugs, cranes, barges and port infrastructure are required, which adds time and cost to a response.
More scheduled sailings cancelled
With the low volume of exports out of China due to the continuation of COVID restrictions, major ocean carrier alliances have announced cancellations of at least a third of their scheduled sailings out of Asia through early June, affecting Asia-Europe services more than transpacific. Asia - US West Coast rates fell 3% this week while Asia - North Europe prices were unchanged, though rates on both lanes have decreased by more than 20% since the first lockdown began in Shenzhen in March. According to Freightos Weekly Update, there is no sign of slowing US demand for ocean imports. March set a new record for monthly container imports, and though volumes from April through August are expected to be below that level, imports this summer are projected to be higher than last year. These volume increases may reflect the pull forward of peak season demand as importers try to get ahead of both the delays experienced last year and the possibility of additional slowdowns at West Coast ports in July when an important dockworker labour contract expires.
ICS and Suez Canal Authority sign landmark agreement
The International Chamber of Shipping (ICS) and the Suez Canal Authority (SCA) have signed a Memorandum of Understanding (MOU) covering key issues impacting international ship owners and operations of the Suez Canal. The year-long commitment will increase information sharing and negotiations on the movement of global trade through the Canal. It will open communication on long-term strategies for toll pricing, environmental protection, and decarbonization. The organizations hope it will lead to in-depth collaboration on operational and structural policies of the Canal, the safety and security of transiting vessels, and enhancing pilotage, towing and repair services. The agreement follows a period of close cooperation between the two organizations, who have been in regular contact over the Covid-19 pandemic, and during the grounding of the Ever Given
in 2021. Egypt is increasingly positioning itself as a key figure in the shipping decarbonization effort, and the country will host COP27 this November. A maritime delegation led by ICS is scheduled to return to Egypt for the UN climate summit to continue meaningful dialogue on shipping’s transition to net-zero.
Repatriation of over 600 i-Kiribati seafarers completed
The full repatriation of over 600 i-Kiribati seafarers to Tarawa, capital of the Republic of Kiribati, has been completed. This week, six seafarers arrived in Tarawa, marking the end of a two-year period of repatriation blighted by pandemic-related restrictions and delays. The repatriation was led by a coalition of employers, unions and NGOs, in tandem with the government of Kiribati, who successfully navigated global travel restrictions and shifting covid protocols, to return the seafarers home. The seafarers returned in groups due to pandemic-related travel restrictions across the globe. From November 2020 – April 2021, 362 Kiribati seafarers returned via Fiji to Tarawa on various flights organised by the Kiribati government. In November 2021, 141 Kiribati seafarers returned on a vessel hired by their employer. At the start of 2022, 73 seafarers were repatriated in groups of around 10 on flights chartered by the Kiribati government, employers, and a religious organisation that supports seafarers. The remaining six seafarers repatriated from Fiji this week and will complete their quarantine in a government facility, as have all the repatriated seafarers both before departing and upon arrival.
May 13 - Botnia Enabler
Chinese shipyard CIMC Raffles today delivered Botnia Enabler, the first of two multi-fuel Knud E. Hansen designed ConRo ships, to Gothenburg, Sweden, based Wallenius SOL.
With a length of 242 meters, a beam of 35.2 meters and a cargo capacity of 5,800 lane meters, the ship is the world’s largest ice-rated multi-fuel ConRo. The ship will operate in Europe and the Gulf of Bothnia on the Zeebrugge-Antwerp-Kokkola-Skellefteå-Oulu-Kemi-Travemünde route. Container carrying capacity on the route will increase by almost 300 percent from 336 TEU to 1000 TEU compared to the ship currently serving the route, and RO/RO capacity will increase by almost 100 percent.
The multi-fuel (LNG, LBG, diesel or synthetic diesel) Botnia Enabler is significantly more energy-efficient per transported unit than older vessels, and according to Swedish Environmental Research Institute IVL’s calculations, will not only reduce greenhouse gas emissions on her route by 63 percent per transported unit, but also NOx (96 percent), SOx (99 percent) and particulates (99 percent).