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A.P. Moller – Maersk links new $5.0bn revolving credit facility to its CO2 performance

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A.P. Moller - Maersk links new $5.0bn revolving credit facility to its CO2 performance. Image: Pixabay
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A.P. Moller – Maersk secures a new sustainability-linked revolving credit facility of $5.0bn through a syndicate of 26 selected banks. This is the first bank refinancing arranged by Maersk after its transformation from a diversified conglomerate to a global container logistics company.

The facility refinances the undrawn $5.1bn facility maturing in 2021 and has a tenor of five years which may be extended by up to two years. It will be part of the company’s liquidity reserve.

“We have received strong support from our global relationship banks. The facility was substantially oversubscribed, and we are pleased with the terms and conditions of the new facility. With the new facility we have extended the maturity profile of our finance commitments, while aligning with our sustainability ones,” highlights Henriette Hallberg Thygesen, CEO of Fleet & Strategic Brands.

The credit margin under the facility will be adjusted based on Maersk’s progress to meet its target of reducing CO2 emissions per cargo moved by 60% by 2030, which is significantly more ambitious than the IMO target of 40% by 2030 (all 2008 baseline).

In 2018 Maersk announced its commitment to becoming carbon neutral by 2050. The new finance facility affirms Maersk’s efforts to drive sustainability into its operations and supply chains.

“We are determined to reach our ultimate target of becoming fully carbon neutral by 2050, and this agreement serves as another enabler for us to deliver on that ambition. Given the lifespan of our fleet, we need to find new and sustainable solutions to propel our vessels within the next 10 years. To realize this ambitious commitment, we are partnering with researchers, regulators, technology developers, customers, energy providers – and now banks,” explains Henriette.

Banco Santander S.A., London Branch, Bank of America Merrill Lynch International Designated Activity Company, Barclays Bank Plc, BNP Paribas, Citibank N.A. London, Commerzbank Aktiengesellschaft, Crédit Agricole Corporate and Investment Bank, Danske Bank A/S, Deutsche Bank, Handelsbanken, HSBC France, MUFG, Nordea, SEB and Standard Chartered Bank, joined as mandated lead arrangers.

Banco Bilbao Vizcaya Argentaria, S.A., London branch, DNB Bank ASA, Industrial and Commercial Bank of China (Europe) S.A., Brussels branch, ING Bank, J.P. Morgan Securities Plc, Mizuho Bank, Ltd., Morgan Stanley Bank International Limited, Natwest Markets Plc, Sumitomo Mitsui Banking Corporation, Société Générale and the Standard Bank South Africa Limited, Isle of Man branch, joined as lead arrangers.

Crédit Agricole and SEB acted as Sustainability Coordinators. MUFG acted as Documentation Agent and BNP Paribas as Facility Agent.

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Stena Bulk performs a test running an MR tanker on 100% biofuel

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During the coming weeks Stena Bulk will perform a test running an MR tanker on 100% biofuel. The fuel is the MR1-100 bio-fuel oil, produced from used cooking oil and supplied by GoodFuels in Rotterdam, the Netherlands. It has been bunkered onto the Stena Immortal and will be used to power the main engine in normal operations to test and prove the technical and operational feasibility.

“By doing this test we want to contribute to push the industry and pave way towards more sustainable shipping”, says Erik Hånell, President and CEO Stena Bulk. “We want to be able to offer our customers additional options with less environmental impact in the future and by conducting the trial in normal operations we want to show that being sustainable doesn´t have to interfere with core business”, he continues.

Biofuels are compatible with regular fuels but produced from biomass or biowaste instead of fossil oil. While there are many kinds of biofuel Stena Bulk is only using 2nd generation fuel, meaning they are based on waste and thereby do not compete with food production. In this case the fuel is made from used cooking oil.

The reduction of CO2 by using this particular biofuel is around 83%. In this trial we will reduce the emissions with 690 mt. These figures are from a life cycle perspective, i.e. including production and distribution of the fuel. Apart from contributing to a large reduction in greenhouse gas emissions the fuel also emits significantly lower levels of SOX than regular compliant fuels.

 

 

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Wärtsilä advances future fuel capabilities with first ammonia tests

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Wärtsilä advances future fuel capabilities with first ammonia tests. Image: Wartsila
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The technology group Wärtsilä has initiated combustion trials using ammonia. The research will help the company to prepare for the use of ammonia as a fuel that can contribute to reducing both the shipping’s and energy sectors’ greenhouse gas emissions.

As part of the tests, ammonia was injected into a combustion research unit to better understand its properties. Based on initial results, the tests will be continued on both dual-fuel and spark-ignited gas engines. These will be followed by field tests in collaboration with ship owners from 2022, and potentially also with energy customers in the future.

“The first tests have yielded promising results and we will continue to optimise combustion parameters,” said Kaj Portin, General Manager, Fuel & Operational Flexibility, Wärtsilä Marine. “This is an important step in making sure that Wärtsilä can provide the engine and fuel systems that ship owners need, whichever fuel they choose in the future.”

Ammonia is a promising, carbon-free fuel as shipping explores how to fulfil the International Maritime Organization’s vision of reducing greenhouse gas emissions from shipping by at least 50% by 2050, while the energy sector is developing optimal paths for 100% renewable energy systems already today. Although ammonia is derived mainly from fossil sources today, in the future ammonia’s greenhouse gas footprint can be nearly eliminated if it is produced using electricity from renewable sources.

The tests are just the latest step as Wärtsilä aims to develop a complete ammonia fuel solution comprising engines, fuel supply and storage. The company is working with ship owners, shipbuilders, classification societies and fuel suppliers to learn more about system and safety requirements, as well as fuel composition, emissions and efficiency.

Wärtsilä is developing ammonia storage and supply systems as part of the EU project ShipFC to install ammonia fuel cells on Eidesvik Offshore’s supply vessel Viking Energy by 2023. The company has also gained significant experience with ammonia from designing cargo handling systems for liquid petroleum gas carriers, many of which are used to transport ammonia.

Ammonia has a number of properties that require further investigation. It ignites and burns poorly compared to other fuels and is toxic and corrosive, making safe handling and storage important. Burning ammonia could also lead to higher NOx emissions unless controlled either by aftertreatment or by optimising the combustion process. A regulatory framework and class rules will need to be developed for its use as a marine fuel.

Wärtsilä is investigating several future fuels, including synthetic methane, ammonia, hydrogen and methanol, with a view to providing complete flexibility across engines and the fuel chain. Internal combustion engines can be adapted to burn any fuel. Dual-fuel or spark-ignited engines are already capable of burning liquified natural gas – from fossil, biomass or synthetic sources – while diesel engines can run on liquid biofuels, biodiesel or e-diesel.

Wärtsilä has extensive experience in converting engines to other fuels, including diesel to dual-fuel, as well as engines capable of burning methanol and volatile organic compounds from crude oil cargoes. The modularity of modern engines means that conversions can be made with a very limited exchange of components. Wärtsilä’s investment in modular engines and in storage and supply systems will enable shipping’s transition from current fossil fuels to bio- and synthetic fuels.

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Port of Long Beach marine terminals open and operating

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Port of Long Beach marine terminals are open and operating amid the unfolding health crisis, with regular vessel calls and scheduled work shifts continuing at the nation’s second-busiest seaport.

The Port’s marine terminals are receiving vessel calls and workers are transferring cargo off and on ships under the health-protective directives established by the U.S. Coast Guard and Customs and Border Protection, with guidance from the U.S. Centers for Disease Control and Prevention.

While the Port’s primary focus is to protect the well-being of the Port and industry workforce, all stakeholders are working diligently to ensure that cargo operations continue, maintaining a vital link in the supply chain to ensure everyday goods continue to be available to Americans.

To slow community spread of COVID-19, the Port Administration Building, Joint Security Command and Control Center and Maintenance Facility are closed to the public through March 31, 2020, or until further notice.

However, normal administrative functions are continuing – all communications and meetings with Port of Long Beach staff will take place online or via phone. Port staff members are at work and will continue to facilitate cargo operations.

The Port is also working very closely with the Long Beach Department of Health and Human Services, supporting communications and planning efforts.

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