"We have evolved our business by diversifying into the decarbonization aspect, having consultancy services, developing carbon tools for the specialized tanker sector, and hosting the first-of-its-kind seminar specifically dedicated to this sector."

Sudheer Vijapurapu

MANAGING DIRECTOR, NEW ASIA SHIPBROKERS (NAS)

May 31, 2024

How has New Asia Shipbrokers (NAS) evolved in its 11 years of existence?

I started NAS with a vision to provide a level of service that goes above and beyond that of a typical broker and from that we have created a name for ourselves as a knowledge based professional boutique shop. We have evolved our business by diversifying into the decarbonization aspect, having consultancy services, developing carbon tools for the specialized tanker sector, and hosting the first-of-its-kind seminar specifically dedicated to this sector. We now work much more in the biofuels and renewables market, which represent about 50-60% of our revenue, whereas a decade ago, it was the majority (90%) chemicals and 10% vegetable oils. 

Could you elaborate on the seminars and tools offered to the specialized tanker industry?

Our inaugural seminar took place on 29th February 2024, with attendees from Europe, India, and Southeast Asia. The idea behind organizing these knowledge-sharing platforms is to create an awareness of decarbonization: regulations change fast and cannot be kept on the back burner for long. Specialized tankers are probably one of the most complex ships and can have the highest amount of carbon emissions in proportion to the deadweight of the ship. Measuring the exact consumption and emissions for a specialized tanker is complicated because of the multiplicity of load ports, discharge ports due to the cargo grades, and several operations like heating or cleaning involved – as opposed to other sector ships. 

Understanding these challenges, NAS has developed a tool to give an estimate of the carbon footprint (and associated costs) regardless of the size of the cargo. It allows Charterers to ensure they are charged fairly by the shipowner. We are constantly updating the tool and will be launching it once the market is ready. With the FuelEU Maritime regulations coming into place in January 2025, the GHG intensity of marine fuels will need to be reduced by 2%; and then, stepwise, by 7.5% (2030), 13% (2035), all the way to 75% (2050). Currently, no fuel alternative meets that kind of scale. 

We will be having the seminar on a yearly basis to stay and keep others updated with the new regulations 

Where is the industry leaning to in terms of alternative fuels?

There are many questions on scale and availability when it comes to alternative fuels and is too early to say what could be a viable alternative. The most obvious choice seems to be the blending of biofuels, but it is not so straightforward when you account for the carbon footprint associated with the transportation of biofuels to blending facilities (or the “well-to-tank” factor). Some bunker suppliers in Singapore already have an infrastructure set-up with bio-blended bunkers up to B24 grade, but sales of these bunkers have been disappointing since January this year due to pricing and owners wanting to test out whether the engines are compatible or not. 

The shipping sector is more of a reactive than proactive industry. A potential solution discussed at our seminar was for companies that do not want to risk their capital on trying bio-blended fuels to obtain carbon credits: Alcom Carbon Markets (ACM) has developed a methodology in collaboration with the Gold Standard (the most accepted certifying body for issuing carbon credits and carbon offsets), which can help projects reduce their footprint by voluntarily blending bunkers with alternative fuels, the credits generated can either be used to offset or sold to Singapore’s carbon exchange (Climate Impact X). 

How are continuous disruptions, like the current security challenges at the Red Sea, impacting global trade?

If these challenges continue, we may see people looking more locally rather than globally. Already, fewer chemicals are shipped from Asia to Europe because of the restrictions in the Red Sea, yet this is temporary. A larger issue is that China, once the world’s biggest importer of chemicals, is now a big exporter. Whereas the West is limited by greater environmental restrictions to add capacities, the East has the manpower, feedstocks, land availability, and demand - over 70% of which resides in this part of the world, for more capacity additions. It’s unlikely that supply chains can become completely localized, as these inter-dependencies will continue to exist, regardless of the disruptions unfolding.

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