Managing fuel storage and segregation is a delicate dance on tanker vessels. The typical fuel grades carried include Very Low Sulfur Fuel Oil (VLSFO), Marine Gas Oil (MGO), and increasingly, biofuel blends like B30 (30% biofuel, 70% conventional fuel). However, the physical limitations of tank layouts and sizes pose significant challenges in accommodating multiple fuel grades simultaneously.
Tank configurations vary across vessel types, often with a limited number of sizable tanks suitable for primary fuel storage. Accommodating too many fuel grades risks comingling and contamination, which can compromise fuel quality and compliance. As such, tanker operators must carefully juggle their fuel inventory, strategically planning bunkering operations and voyage routing to minimise the need for carrying excessive fuel grades concurrently.
Avoiding comingling is a top priority, as it can lead to off-spec fuels and potential engine damage. Stringent procedures are in place to ensure tanks are emptied before loading a new fuel grade, adding another layer of complexity to fuel management. With the introduction of biofuel blends, the challenges intensify, as these new fuel types must be meticulously segregated and tracked to maintain compliance and sustainability claims.
The rise of biofuel mandates
The shipping industry is facing increasing pressure to reduce its environmental impact, leading to the introduction of biofuel mandates such as FuelEU. This regulation aims to promote the use of sustainable biofuels in maritime transportation, with the goal of reducing greenhouse gas emissions.
Under FuelEU, vessels operating in the European Union will be required to incorporate a specific percentage of biofuels into their fuel mix. Initially, the mandate will require a 2% biofuel blend for the first five years, gradually increasing to 6% in subsequent years. However, it is important to note that biofuels are not expected to completely replace traditional bunker fuels like VLSFO and MGO. Rather, they will be used as a supplementary fuel source to help meet decarbonisation targets.
The introduction of biofuel mandates presents new challenges for tanker operators. While biofuels offer a more sustainable alternative, they also introduce complexities in terms of tracking, compliance, and fuel management. Ensuring compliance with regulations like FuelEU will require robust systems and processes to monitor and report on biofuel usage accurately.
Complexities of biofuel tracking and compliance
As the shipping industry transitions towards using more biofuels to meet environmental regulations, vessel operators face new challenges in tracking and proving compliance. Unlike traditional fossil fuels, biofuels often come in batches with varying levels of bio-components and sustainability certifications.
Proper tracking of these batches is crucial to demonstrate that the correct biofuel grade was consumed during specific voyages. However, maintaining a clear chain of custody can become complicated, especially when multiple biofuel batches are loaded onto a single vessel. Mistakes in batch tracking could lead to discrepancies between the reported fuel consumption and the actual biofuel used.
Moreover, verifying the sustainability credentials of biofuel batches is a critical aspect of compliance. Certain biofuels may not meet the required standards for greenhouse gas emissions reductions or sustainable sourcing practices. Without proper documentation and proof of sustainability, these biofuel batches could be deemed non-compliant, potentially resulting in penalties or fines.
To avoid such risks, vessel operators must be diligent in their biofuel tracking and reporting from day one of new regulations taking effect. Establishing robust processes and systems to accurately monitor biofuel batches, their associated sustainability certifications, and their consumption patterns is paramount. Failure to do so could jeopardize compliance efforts and undermine the environmental benefits of using biofuels in the first place.
Traditional batch-based reporting approach
The traditional approach to fuel reporting on ships has been based on the concept of batches and Bunker Delivery Notes (BDNs). Each time a vessel takes on fuel, a BDN is issued, detailing the quantity and grade of the fuel supplied. The common practice is to follow a “first-in, first-out” (FIFO) logic, where the fuel batches are consumed in the order they were loaded onto the ship.
From the perspective of verifiers, such as classification societies, the BDN serves as the primary proof of the fuel quantities and grades received by the vessel. In the context of emissions reporting and compliance, verifiers have typically relied on spot-checking BDNs against the reported fuel consumption data. The underlying assumption is that vessels are consuming fuel batches in the FIFO order, as indicated by the chronological sequence of BDNs.
This batch-based reporting approach has been seen as relatively straightforward and aligned with the operational practices of most vessels. By adhering to the FIFO logic and cross-checking with BDNs, verifiers can gain reasonable assurance that the reported fuel consumption figures are accurate and consistent with the fuel supplied to the vessel.
However, as biofuel mandates and sustainability requirements become more stringent, the traditional batch-based reporting approach may face challenges in providing the level of granularity and traceability required for demonstrating compliance with evolving regulations.
Tank-based reporting for stricter compliance
As biofuel mandates like FuelEU come into effect, there is a growing concern among shipping companies about ensuring strict compliance from day one. While verifiers have indicated that a batch-based “first-in, first-out” approach aligned with Bunker Delivery Notes (BDNs) may suffice, some experts argue for a more conservative risk minimisation strategy.
The tank-based reporting approach involves tracking exactly which fuel batches are loaded into which tanks on a vessel. This level of granularity allows for precise monitoring of biofuel consumption, ensuring that the right batches are being used at the right times, and enabling full traceability back to the BDNs and proof of sustainability documentation.
ZeroNorth’s eBDN platform emerges as a flexible and powerful enabler of both batch-based and tank-based reporting approaches. By seamlessly associating BDNs with specific tanks, eBDN ensures detailed traceability of fuel batches and supports compliance with biofuel sustainability requirements. This adaptability allows operators to transition between reporting methods effortlessly, aligning with operational priorities or regulatory needs as they evolve.
By knowing the specific contents of each tank, shipping companies can avoid potential issues that may arise from a first-in, first-out logic. For instance, if multiple biofuel batches are on board and one lacks proper sustainability certification, the vessel may choose to consume the certified batch first, even if it is newer, violating the first-in, first-out assumption. With eBDN’s ability to track and document such decisions, operators can ensure compliance while optimising their fuel strategies.
While tank-based reporting adds complexity, it provides a safeguard against potential compliance risks and fines. As regulations continue to evolve and become stricter, having a robust system like eBDN in place that can adapt to changing requirements becomes increasingly valuable. By erring on the side of caution and implementing a more comprehensive fuel tracking solution from the outset, shipping companies can future-proof their operations and minimise the risk of non-compliance penalties.
The ‘Batch vs Tank’ reporting debate
There is an ongoing debate surrounding the optimal approach to fuel reporting compliance – whether to adopt a batch-based “first-in, first-out” logic tied to Bunker Delivery Notes (BDNs), or a more granular tank-based reporting system that tracks exactly which fuel batches are stored in each tank.
On one side, verifier guidance suggests that the BDN-linked batch approach is sufficient for proving compliance. This method assumes that as fuel is consumed, the oldest batches delivered are used up first before newer ones, matching the BDN documentation. It is a simpler process that aligns with existing practices.
However, there are concerns that this approach may be too lax when it comes to new biofuel mandates like FuelEU. With multiple biofuel grades potentially on board, each with varying sustainability credentials, a strict first-in, first-out logic could lead to reporting inaccuracies. What if a newer biofuel batch is prioritised for consumption over an older one due to operational reasons?
The counterargument advocates for tank-based reporting as a more cautious strategy to minimise compliance risks. By meticulously tracking which specific fuel batches are loaded into each tank and keeping a real-time log of consumption from those tanks, there is full visibility and traceability. This approach aims to leave no ambiguity about what was actually burned, avoiding potential issues down the line.
Ultimately, the optimal reporting method is up to each operator’s risk assessment and operational realities. The key is implementing solutions that offer flexibility to switch between batch and tank-based reporting as requirements evolve. This agility ensures that compliance can be achieved through whichever approach proves most suitable, minimising disruptions and adjustments needed mid-journey.
Digital solutions for fuel management
To effectively navigate the complexities of managing multiple fuel grades, biofuel batches, and compliance reporting, digital fuel management solutions have emerged as powerful enablers. By leveraging data and automation, these tools can streamline the tracking of batches, BDNs (Bunker Delivery Notes), and tank levels across the fleet.
One of the key advantages of digital fuel management platforms is their ability to automate the association between fuel batches, BDNs, and the specific tanks they are loaded into. This traceability is crucial for maintaining an audit trail and ensuring compliance with regulations that mandate proof of sustainability for biofuels.
Moreover, these solutions often incorporate contextual reporting capabilities. This means that the level of reporting granularity can be adjusted based on whether biofuels are present on a particular vessel. If a ship is not carrying any biofuel, the system can automatically switch to a simpler grade-based reporting approach, reducing administrative overhead. However, when biofuels are loaded, the system can seamlessly transition to a more comprehensive tank-based reporting mode, ensuring meticulous tracking of batch consumption.
The true power of digital fuel management tools lies in their ability to enable quick adjustments to reporting strategies. As regulations evolve and compliance requirements shift, these platforms can adapt swiftly. If a decision is made to switch from a batch-based approach to a tank-based approach mid-voyage or mid-year, the system can accommodate this change without disrupting operations.
By consolidating data from various sources, such as procurement systems and bunker supply events, these solutions can maintain an up-to-date record of the remaining on-board (ROB) quantities for each batch and tank. This information can then be leveraged for data-driven decision-making, optimising tank usage and minimising the risk of contamination or comingling.
Contextual reporting based on biofuel use
As the biofuel era dawns, tanker operators face a delicate balance between ensuring compliance and minimising administrative burdens on vessel crews. The key lies in adopting a contextual reporting approach, where the level of granularity in fuel reporting adapts seamlessly to the presence of biofuels on board.
When a vessel is operating solely on traditional fuel grades like VLSFO or MGO, a simplified grade-based reporting system can suffice. This approach follows the industry-accepted “first-in, first-out” logic, tracking fuel consumption based on the order in which batches were loaded, as documented by the Bunker Delivery Notes (BDNs).
However, the moment biofuels enter the equation, the reporting requirements escalate. To ensure full traceability and prove the sustainability credentials of the biofuel batches, a more granular tank-based reporting method becomes essential. This approach meticulously tracks the specific tanks containing each biofuel batch, enabling precise monitoring of consumption patterns.
By implementing a contextual reporting system, digital fuel management solutions can seamlessly switch between grade-based and tank-based reporting modes based on the presence of biofuels. When biofuels are loaded, the system automatically triggers tank-based reporting, relieving vessel crews from the administrative burden of manually adjusting reporting procedures.
This intelligent switching not only ensures compliance but also minimises disruptions to established workflows. Vessel teams can continue their familiar grade-based reporting practices until biofuels are introduced, at which point the system elevates to the more rigorous tank-based approach, safeguarding the vessel’s adherence to evolving regulations.
Optimising tank usage through data
In the era of multiplying fuel grades and biofuel mandates, efficiently managing limited tank storage space has become a high-stakes game of logistical Tetris for tanker operators. With vessels carrying a diverse mix of VLSFO, MGO, and various biofuel blends like B30, avoiding comingling and contamination is paramount while still maximising cargo capacity.
This is where digital fuel management solutions leveraging data-driven decision making can be game-changers. By integrating real-time data on fuel quantities, grades, properties, and tank levels across the fleet, these platforms can provide decision intelligence that allows for:
Intelligent tank allocation: Through analysis of voyage data, fuel consumption profiles, and tank configurations, the system can recommend optimal tank load plans to avoid quality incidents while minimising unused tank space.
Dynamic re-allocation: If compliance demands shift mid-voyage, the software can identify underutilised tanks suitable for receiving new fuel grades without risk of contamination based on remaining-on-board (ROB) levels.
Batch tracking and auditing: By integrating BDN data and tracking fuel batches from procurement to consumption, the system maintains a fully auditable record to prove compliance with biofuel sustainability criteria.
What-if simulations: Fuel managers can run scenarios to evaluate different tank load plans, bunkering options, and voyage routing to optimise for cost, compliance, or sustainability targets based on the latest intelligence.
In essence, these data-driven tools transform tanker fuel management from an exercise in guesswork and risk mitigation into a strategic optimisation play. As the energy transition accelerates, mastering this digital game of tank Tetris will be crucial for tanker operators to stay ahead of tightening regulations while maximising operational efficiency.
Preparing for stricter decarbonisation rules
As the shipping industry continues its journey towards decarbonisation, the demands for adopting renewable fuels are only expected to intensify. While biofuels represent an initial step, more stringent regulations will likely mandate the use of alternative fuel sources with even lower carbon footprints.
To future-proof operations, vessel operators must prioritise establishing comprehensive traceability throughout their fuel supply chains. Every drop of fuel consumed will need to be meticulously tracked, from its original source and production method to its precise utilisation on board. This level of granular data capture and reporting will be crucial for demonstrating compliance with increasingly stringent emissions targets.
Moreover, the ability to dynamically adjust fuel strategies and procurement will become paramount. As new renewable fuel options emerge and evolve, vessel operators must possess the agility to seamlessly integrate these alternatives into their operations. Maintaining flexibility in fuel management processes and systems will be key to staying ahead of the decarbonisation curve.
Ultimately, the road to a sustainable shipping industry hinges on embracing transparency, traceability, and adaptability in fuel management practices. By proactively laying the groundwork for comprehensive fuel tracking and strategic agility, vessel operators can position themselves to navigate the complexities of stricter decarbonisation mandates with confidence and compliance.
Flexibility to adapt to evolving regulations
As the maritime industry continues its decarbonisation journey, regulations surrounding fuel usage and emissions reporting are expected to become increasingly stringent. The path towards a more sustainable future is unlikely to be linear, with potential shifts in mandates, targets, and approved fuel types.
In this ever-changing landscape, flexibility becomes a crucial attribute for any fuel management solution. Shipping companies need the ability to adapt their reporting approaches seamlessly, ensuring compliance with the latest requirements while minimising operational disruptions.
Solutions that offer versatility in reporting methodologies, such as the ability to switch between batch-based and tank-based reporting, provide a significant advantage. This flexibility allows companies to respond promptly to regulatory updates, adjusting their practices to align with evolving standards without the need for extensive system overhauls or manual interventions.
Furthermore, adaptable solutions can accommodate the introduction of new fuel types or blends, enabling seamless integration and accurate tracking from the outset. As the industry explores alternative fuel sources, such as synthetic or renewable fuels, having a flexible system in place ensures a smooth transition and maintains regulatory compliance.
By embracing flexibility, shipping companies can future-proof their operations, minimising the risk of non-compliance penalties and positioning themselves as industry leaders in sustainable practices. Ultimately, the ability to adapt swiftly to changing regulations is not only a competitive advantage but also a necessity in the pursuit of a more environmentally responsible maritime industry.
Digital tools as enablers for complex fuel management
As the maritime industry navigates the transition towards decarbonisation and stricter emissions regulations, the complexity of fuel management on board vessels is increasing exponentially. With multiple fuel types, including traditional bunkers, biofuels, and future renewable alternatives, ship operators face the daunting task of ensuring compliance while optimising operations.
Enter digital fuel management solutions, which have emerged as critical enablers in this intricate fuel juggling act. These software platforms act as centralised command centers, providing real-time visibility and control over fuel inventories, consumption patterns, and regulatory reporting requirements.
At the core of these digital tools lies advanced data integration capabilities, seamlessly ingesting information from various sources such as bunker delivery notes (BDNs), tank level sensors, and voyage data. By consolidating this data into a unified platform, ship operators gain a comprehensive view of their fuel landscape, enabling informed decision-making and proactive compliance measures.
One of the key advantages of digital fuel management solutions is their ability to automate complex tracking and reporting processes. With built-in algorithms and configurable rules, these tools can automatically associate fuel batches with their respective tanks, ensuring traceability and accurate reporting. This becomes particularly crucial when dealing with multiple biofuel grades, each with its own sustainability certifications and compliance requirements.
Moreover, these digital platforms offer contextual reporting capabilities, adapting their reporting mechanisms based on the presence or absence of biofuels on board. When biofuels are loaded, the system can automatically switch to a more granular, tank-based reporting mode, providing the necessary level of detail for regulatory compliance. Conversely, when operating solely on traditional bunkers, the system can revert to a batch-based or grade-based reporting approach, minimising administrative overhead.
Beyond compliance, digital fuel management solutions also contribute to operational efficiency and cost optimisation. By leveraging advanced analytics and machine learning algorithms, these tools can identify patterns and anomalies in fuel consumption, enabling proactive measures to reduce wastage and optimise bunker procurement strategies.
As the maritime industry continues its decarbonisation journey, the role of digital tools in fuel management will become increasingly pivotal. With their ability to handle complexity, ensure compliance, and drive operational excellence, these solutions will be instrumental in navigating the intricate tanker fuel tetris, enabling ship operators to stay ahead of the curve and embrace a sustainable future.
Conclusion: mastering the tanker fuel tetris
The shipping industry faces a complex juggling act in managing multiple fuel grades, especially with increasing biofuel mandates disrupting traditional bunkering and storage approaches. Physical tank layout limitations, avoiding comingling, tracking batch sustainability, and ensuring compliance from day one pose significant challenges.
While batch-based reporting aligns with some verifier guidance, many experts recommend the more granular tank-based approach to minimise compliance risks as regulations evolve. Digital fuel management solutions enable automated tracking of batches, BDNs, tank levels, and contextual reporting based on biofuel use.
Data-driven decision-making optimises tank usage across a diverse fleet. Crucially, these tools provide the flexibility to adapt reporting approaches if requirements change under stricter future decarbonisation rules beyond biofuels.
As the industry transitions towards greater renewable fuel adoption, full transparency, traceability, and the ability to manage complex fuel tetris games will be critical. Implementing flexible digital fuel management solutions today paves the way for sustainable compliance in an increasingly decarbonised future.
Source: ZeroNorth
