Bunker Fuel

Argus Meda viewpoint: European marine biodiesel demand to firm

Marine biodiesel bunkering demand in Europe could rise in 2024 due to IMO’s first assignment of energy efficiency “grades” for vessels and the extension of the EU ETS.

Published

11 months ago

December 28, 2023

Admin

Hussein Al-Khalisy of global energy and commodity price reporting agency Argus Media on Wednesday (27 December) published a report on marine biodiesel bunkering demand in Europe:

Marine biodiesel bunkering demand in Europe could rise in 2024, as a result of the International Maritime Organisation's (IMO) first assignment of energy efficiency "grades" for vessels and the extension of the EU's Emissions Trading System to the shipping sector.

Market participants expects firmer marine biodiesel bunkering demand in the first half of 2024 on the back of the new regulations.

IMO's CII regulations means that vessels will be graded from A to E in 2024, which will represent their operational energy efficiency in 2023. Bunkering marine biodiesel can enhance a vessel's rating as it reduces the CO2 emissions from fuel consumption and allow non-compliant ships to avoid fines and increased refinancing costs.

In January 2024 the EU's Emissions trading system (ETS) will cover CO2 emissions from large ships. Using a biofuel component in a marine biodiesel blend will have an emission factor of zero under the EU ETS scheme, making it a lucrative option for shipowners looking to minimise their exposure to EU ETS regulations.

The marine biodiesel market is tiny compared with the conventional marine fuels market, but demand has stayed steady on the year in 2023 at around 520,000t, triple the volumes sold in 2021, according to data from the Port of Rotterdam. This compares with about 6.77mn t of conventional fossil bunker fuels sold at the port in the first nine-months of this year.

Some participants reported that demand for marine biodiesel may firm further in 2025 as shipping firms will have to use ETS allowances covering 70pc of their reported emissions, while allowance availability tightens. The FuelEU maritime initiative which is set to start in 2025, could also support demand.

But others expects a more marginal rise in marine biodiesel consumption on the back of thinning biofuels subsidy tickets values for the shipping sector in Amsterdam and Rotterdam.

New markets

An increasing number of suppliers in the northwest European bunkering hub of Amsterdam-Rotterdam-Antwerp (ARA) have been offering marine biodiesel blends, with a spot market emerging there and also the west Mediterranean.

This prompted the indexation of northwest European calculated biodiesel and very-low sulphur fuel oil (VLSFO) prices and the launch of the first market-led marine biodiesel blend price in the west Mediterranean.

B24 dob Algeciras-Gibraltar is a spot price assessment launched on 1 November, comprising a blend of 24pc used cooking oil methyl ester (Ucome) and 76pc very low sulphur fuel oil (VLSFO). It was assessed at an average of $779.31/t in November and around $763/t in December so far, or an average November premium of $168.30/t and December premium of around $182/t to conventional dob VLSFO in the west Mediterranean bunkering hub of Gibraltar-Algeciras-Ceuta. It was also marked at a premium of about 2.25pc ($17/t) to Argus B30 (Ucome) fob ARA, and a 16.94pc ($112.69/t) premium to the B30 advanced Fame 0°C CFPP dob ARA in November.

Demand for northwest European marine biodiesel blends slipped in November on the back of slower seasonal demand and price uncertainty in the underlying conventional VLSFO market in ARA. Meanwhile, trading for Ucome thinned in recent weeks as demand shifts towards rapeseed oil which has better winter properties. Market participants reported an uptick in demand for the B30 advanced fatty acid methyl ester (Fame) 0°C CFPP blend towards the close of the year on the back of the announcement from the Dutch government reducing the subsidy multiplier for biofuels in maritime shipping to 0.4 from 2024.

Photo credit and source: Argus Media
Published: 27 December 2023

Related Topics:Bunker fuel - Biofuel Technology - Emissions reporting

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Business

Shell MGO bunker heist: Bunker clerk pleads guilty to helping Sentek acquire misappropriated fuel

Wong Wai Meng, who received more than USD 286,000 from Sentek Marine & Trading for his assistance, pleaded guilty to 12 counts of intentionally helping the firm acquire the misappropriated marine gas.

Published

11 hours ago

December 2, 2024

Admin

A bunker clerk, Wong Wai Meng, who received more than USD 286,000 (SGD 384,681) from Singapore-based Sentek Marine & Trading (Sentek) for his assistance, pleaded guilty to 12 counts of intentionally helping the company acquire misappropriated marine gas oil, The Straits Times reported on Friday (29 November).

The 58-year-old Singaporean was employed at the Sentek when he assisted in acquiring more than 28,000 metric tonnes (mt) of the misappropriated fuel worth USD 13.58 million (SGD 18.26 million).

Wong committed the offences over 46 occasions between August 2014 and December 2017.

Wong is among the three bunker clerks previously employed by Sentek, who were charged for offences under the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA) and the Prevention of Corruption Act (PCA).

Another bunker clerk among the three charged, Wong Kuin Wah, 61, was sentenced to seven years and six months’ jail on 18 November for his role in misappropriating more than 27,000 tonnes of gas oil worth around USD 12.8 million (SGD 17.2 million).

The third individual who was charged, Boo Pu Wen, reportedly passed away in July 2023 and had his charges abated following his death, meaning Boo’s court proceedings over his 19 charges at the time came to an end.

Former Shell employees, who were key members of a group who dishonestly misappropriated fuel from Shell Pulau Bukom, were sentenced to jail in court earlier.

Earlier coverage of developments by Manifold Times regarding the Shell MGO bunker heist can be found below:

Photo credit: Katrin Bolovtsova
Published: 2 December, 2024

Biofuel

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

Fingerprinting identifies feedstock origins of FAME-based biofuels used in shipping industry; can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity.

Published

11 hours ago

December 2, 2024

Admin

Singapore: GCMD introduces new technique for FAME bio bunker fuel fingerprinting

The Global Centre for Maritime Decarbonisation (GCMD) on Monday (2 December) released its latest report, presenting a new technique that creates a fingerprint for Fatty Acid Methyl Esters(FAME) bio bunker fuels.

This fingerprint identifies the feedstock origins of the FAME-based biofuels used in the shipping industry.

GCMD said FAME fingerprinting is needed as the shipping sector is increasingly using biofuels, such as FAME, to reduce its GHG emissions. With that, concerns have arisen regarding the legitimacy of biofuels and whether they are truly sustainable.

Industry bodies are seeing a rising number of cases mislabelling biofuels purported to be made from recycled oils and fats, while suspicions persist that they might be produced from cheaper and less sustainable virgin oils.

“To address these concerns, FAME fingerprinting can be used as a potential tool to detect fraud in marine fuel supply chains and ensure biofuel authenticity. By providing a physical validation method that complements existing certification schemes, FAME fingerprinting can help justify the green premium with genuine environmental benefits and safeguard the integrity of marine fuels supply chain,” GCMD said.

FAME fingerprinting is based on the principle that the fatty acid profile of FAME is unique to its feedstock and can be preserved during feedstock transesterification to produce FAME. The "fingerprint" can then be compared against a database of known fatty acid profiles to identify the feedstock origin.

GCMD worked with VPS who modified existing fuel testing methods to carry out sample analyses using a gas chromatograph with flame-ionisation detection, an instrument commonly found in fuel test laboratories.

The analysis takes about an hour, comparable to the turnaround time for current marine fuel quality testing in the supply chain.

“We have tested this method on a variety of FAME samples from different suppliers, including virgin oils, used cooking oils, palm oil mill effluent, beef tallow and food waste and were able to identify the feedstock origins for each sample,” GCMD added.

Manifold Times previously reported Captain Rahul Choudhuri, President, Strategic Partnerships at marine fuels testing company VPS, forecasting the use of finger printing technology today will likely establish a blueprint of how future alternative bunker fuels’ feedstocks are authenticated.

Captain Choudhuri said this when he gave an update of VPS’ biofuels finger printing trials with GCMD.

Note: The full report, titled ‘Rapid forensic analysis of FAME-based biofuels: Potential use of its fingerprint as a fraud detection tool’, can be downloaded here.

Photo credit: Global Centre for Maritime Decarbonisation
Published: 2 December, 2024

Methanol

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

Korean firm’s MoU with AE Risinājumi will see construction of Latvia’s first commercial-scale green methanol production plant, which will supply green methanol to ships in EU’s maritime fleet.

Published

11 hours ago

December 2, 2024

Admin

PLAGEN to produce and supply green methanol bunker fuel with Latvia plant

South Korean clean energy firm PLAGEN on Friday (29 November) signed an MOU with Latvian company, AE Risinājumi, for the production of green methanol in Latvia at the “2024 Latvia-Korea Business Forum” hosted by the President of Latvia.

The agreement will result in the construction of Latvia's first commercial-scale green methanol production plant, which will supply green methanol to ships in the EU's maritime fleet, contributing to the reduction of greenhouse gas emissions from maritime transportation.

PLAGEN's MoU aims to produce 20,000 metric tonnes (mt) of green methanol per year and will begin feasibility studies in the first half of 2025, and full-scale production will begin in 2028.

With 53% of Latvia's land area covered by forests, timber production and wood processing make a significant contribution to Latvia’s economic production, which generates a large amount of forest residues and wood wastes. In addition, Latvia also has an abundance and low price of renewable electricity from wind power.

Latvia is one of the most competitive countries in the European Union, as it can produce clean methanol at a competitive price by using abundant wood waste as a raw material and renewable electricity from cheap wind power.

The use of abundant forest residues and wood wastes as a feedstock and cheap renewable electricity from wind power makes it possible to produce green methanol with a competitive price, making Latvia is one of the most competitive countries in the EU.

In the European Union, the European Emissions Trading Scheme (EU-ETS) will come into effect in 2025, requiring shipping companies to purchase carbon credits for their greenhouse gas emissions.

In addition, the EU is implementing FuelEU Maritime, which aims to reduce greenhouse gas emissions by 2% below the 2020 average by 2025 and 80% by 2050. This is expected to result in an energy transition to green methanol.

In July 2023, the International Maritime Organization (IMO) adopted a revised strategy that calls for reducing greenhouse gas (GHG) emissions from ships to net-zero by or around 2050, and plans to introduce full-scale regulations from 2027, and shipping companies have begun ordering methanol-powered ships fueled by green methanol, a carbon-neutral fuel.

“We expect to start producing green methanol in Latvia in 2028, which will reduce greenhouse gas emissions from EU maritime transport vessels and contribute significantly to the revitalization of the Latvian economy and national energy security,” said John Kyung, CEO of PLAGEN.

In November 2024, PLAGEN completed the purchase of an industrial complex and received a government permit for the construction of the country's first green methanol plant in Dongjeom Industrial Complex in Taebaek City, Gangwon-do.

The project, which will produce 10,000 mt per year, is scheduled to begin construction in the first half of 2025 and begin production in the second half of 2027.

Photo credit: PLAGEN
Published: 2 December, 2024