SIBCON 2024: EMF, Argus Media point towards traditional benchmarks as baseline for shipping’s multi-fuel future

Representatives of Singapore’s largest bunker supplier Equatorial Marine Fuel Management Services (EMF) and independent market intelligence provider Argus Media shed light on the evolving marine fuels landscape and complexities involved in pricing and adoption of alternative fuels.

They were part of the Fuel Price Projections and Impact on the Multifuel Marketplace panel discussion session that took place on Thursday (10 October) during the 23rd Singapore International Bunkering Conference and Exhibition (SIBCON 2024).

Choong Zhen Mao, Executive Director, EMF emphasised the importance of the traditional bunker fuel market as a benchmark for the emerging alternative marine fuels sector. 

Conventional fuels such as fuel oil and gas oil have been the dominant players in the shipping industry for a long time, and they will continue to serve as a reference point for pricing and decision-making.

He also highlighted the need for optionality and flexibility in the marine fuel supply chain, as shipowners and operators are now building dual-fuel vessels to have the ability to use different types of bunker fuels. 

As a Singapore-based bunker supplier, EMF is also trying to offer multiple fuel solutions to cater to this demand for optionality.

“However, we also realise it is very capital intensive to offer multiple fuel solutions, and that’s why we are also embracing the spirit of collaboration. We’re working with different people to offer different kind of fuel products to the shipping sector,” shared Mr Choong.

“Besides methanol, we are working with some of our suppliers to offer B24 biofuel as well. We are in the process of locking in the key components for B24 to create a consistent blend and specifications for customers.”

Mahua Chakravarty, Editor, Marine Fuels (Asia) at Argus Media, also moderator for the panel discussion session, provided an overview of the current fuel landscape in Singapore, highlighting the growth in B24 (biofuel blend) and liquefied natural gas (LNG) consumption as a bunker fuel.

B24 consumption in Singapore has seen significant growth, increasing from around 110,000 metric tonnes (mt) in 2022 to over 500,000 mt in 2023, with further expected growth in 2024.

She observed B24 prices in 2023 were initially more aligned with conventional marine fuels. However, as liquidity in the B24 market improved, the prices started to diverge and become more independent.

In fact, B24 prices saw a 9.3% year-on-year decline in line with biofuel prices, indicating a more market-driven pricing mechanism.

Looking ahead, Argus Consulting forecasts that the B24 premium will rise further in 2025 as demand increases, driven by regulations like Fuel EU Maritime, Mahua said.

“We do see that the premiums are really holding up as we go into 2025 due to the uptake of biofuels as a marine fuel. Biofuels being the easy solution, are a drop-in solution for shipowners,” she explained.

“Although prices of Brent, VLSO and HSFO have been quite firm, the premiums of B24 [versus VLSFO] have really been driven a lot by consumption.”

Photo credit: Manifold Times
Published: 15 October