BHP has revealed it is trialling the use of biofuels for vessel propulsion with bulker giant Golden Ocean.
Rashpal Singh Bhatti, BHP's vice-president of maritime & supply chain excellence, broke the news during a panel discussion at Nor-Shipping on Wednesday.
"We're taking biofuels trials forward and whilst they're not scalable at a level that we want them to be, we learnt yesterday in the Nor-Shipping introduction that we've got to pivot or preserve quickly," Bhatti said during the session, which was moderated by TradeWinds' editor-in-chief, Julian Bray.
"But you've got to start somewhere. So we fail fast — that's fine. Learn fast and move on. But we can't stand still," Bhatti said.
Test period
“We’re working with GoodFuels and with Golden Ocean and with other organisations to say that we’re going to take that cost up front — and, if it works, we’re going to help them scale it," he continued.
GoodFuels is a Netherlands-based producer of "sustainable" biofuels, which are manufactured using feedstock derived from waste or residue products, according to its website.
Golden Ocean chief executive Birgitte Ringstad Vartdal, who was also on the panel, told TradeWinds that it was “too early” to comment on the fuel project with BHP.
The "bold steps" BHP is taking to improve its environmental impact and corporate social responsibility have benefited not only the miner's value chain, but its share price too, Singh Bhatti said.
Efficiency angle
Marine fuel will be one of the shipping industry's biggest disruptors over the next 10 years, Bhatti predicted during the conference session.
"Birgitte and other shipowners around this table will not be able to go to shipyards and get 20-year [lifespan] vessels anymore," he told delegates.
"The banks will not price them because they know those ships will become redundant in five years and new technology will come into play. That will change the industry forever."
On Tuesday, Singh Bhatti revealed that BHP is partnering with shipping and commodity players to develop LNG-fuelled newcastlemaxes and VLOCs that can carry coal and iron ore from Australia to China, as TradeWinds has reported.
"While batteries are still not where they need to be, we will be the organisation that takes LNG bulk shipping forward," he said today.
Partners in the LNG fuel project include fellow miners Fortescue Metals Group and Rio Tinto, plus shipowners MOL, China Merchants Energy Shipping and U-Ming Marine Transport.
Driving change
Bhatti said today that BHP is on a mission to help make shipping “much much safer”.
"The way we think about it is that whatever we're doing is for a purpose and our purpose is the safest coverage at the lowest cost — in that order," he said.
Bhatti pointed to the fact that 800 seafarers are killed at work each year.
He also cited a recent UN report that said 570,000 people will die prematurely between 2020 and 2025 on the back of emissions from shipping.
"We take that as a huge criticism to us, as the largest charterer in the world," the BHP executive said. "We're doing something about that."
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