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Argus Media: B24 bunker demand in Asia, Middle East to rise in 2025

B24 bunker fuel demand in key ports of Singapore, Zhoushan and Fujairah will likely rise in 2025 due to increased demand ahead of implementation of EU’s FuelEU maritime regulation.

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B24 bunker demand in the key ports of Singapore, Zhoushan and Fujairah will likely rise in 2025, because of increased demand ahead of the implementation of the EU's FuelEU maritime regulation.

25 October 2024

Regional demand for B24 — which consists of 24pc used cooking oil methy ester (Ucome) and 76pc very low sulphur fuel oil (VLSFO) — is expected to rise as shipowners prepare to meet more stringent mandates set by the EU and the International Maritime Organisation (IMO) from next year, said market participants.

FuelEU Maritime aims to raise the share of renewable and low-carbon fuels in the fuel mix of maritime transport within the EU, and will set requirements for greenhouse gas emission reductions against a 2020 baseline level, starting with 2pc in 2025. The use of B24 is a relatively low-cost way to help meet the new mandate and is available at key ports globally.

Competition for B24 is rising in Asia and the Middle East as port authorities revisit local rules and permits. The Zhoushan Port Authority will obtain the domestic blend permit by the end of the year, it said recently at a local conference, which will pave the way for key local refiners to blend and sell B24 to local and international shipowners.

The quota is likely to be divided among Chinese majors like PetroChina (CNPC), Sinopec, and CNOOC. The port authorities further mentioned that CNPC and Sinopec are expected to each receive a blending quota of 200,000t of B24, while CNOOC will receive a blend quota of 100,000t in 2025. There were no further details available or any other formal announcement.

But regional traders and shipowners, which have been waiting for the lifting of restrictions by the Chinese government, expect the move will allow shipowners more options to bunker B24 in this region.

European market participants expect this B24 blending permit, if allocated, may pull some marine biodiesel demand towards Zhoushan and away from shipowners operating on east-west routes between Singapore and Europe.B24 blends in Zhoushan could end up pricing very competitively against VLSFO when EU emission trading system (ETS) costs are accounted for, given easing prices for Chinese-origin biodiesel, participants added. And FuelEU Maritime's pooling mechanism, which allows shipowners to pool different vessels together to achieve overall compliance across the pool, will enable shipowners that operate east-west routes to pool those vessels with other vessels that operate only within the EU — opening the door for marine biodiesel bunkered in Zhoushan to help meet FuelEU compliance.

Singapore

B24 consumption has been on the rise in Singapore, the world's largest bunkering hub, through 2024 because of demand from regional and international shipowners for refuelling of this blended marine fuels. B24 consumption touched 470,300t between January to September, according to data from the Maritime and Port Authority of Singapore (MPA).

Demand for B24 is expected to near 800,000t by the end of 2024, up from 518,000t in 2023. Zhoushan remains competitively priced versus Singapore for VLSFO, with Singapore's delivered on board (dob) prices for the past year showing a $3/t premium versus Zhoushan on average, based on Argus data.

But Singapore-based traders remain confident that the city-state will continue to lead the region in terms of B24 bunkering demand into 2025. "I think both ports will co-exist and there will be price competition…also it doesn't replace Singapore as the main port, do note," said a key global trader and refiner.

Singapore is also the cheapest in terms of B24 pricing, compared with other key ports like Rotterdam and Fujairah. The spread between Singapore versus Rotterdam since 24 April shows a $94/t discount for bunkering in the former port, while the discount for Singapore with Fujairah stood at an average of $39.4/t, based on Argus data.

Middle East

Bunkering B24 has been picking up in the Middle East since the end of 2023, with sporadic demand trickling in this year. "We receive enquiries for B24 once or twice a month, sometimes even less than that for small volumes of 150-200t," one Fujairah-based trader said. But this could change following the implementation of the EU's FuelEU Maritime regulation from January 2025 .

The EU is an important market and a regular destination for much of the maritime traffic passing through Fujairah, so the new regulations are likely to be a trigger for change, market participants said. "Many vessels refuel in Fujairah before calling at EU ports," one trader says. "They already have to comply with the EU ETS, [Carbon Intensity Index], and will need to also comply with FuelEU."

By Mahua Chakravarty, Hussein Al-Khalisy and Elshan Aliyev

 

Photo credit and source: Argus Media
Published: 28 October 2024

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Biofuel

Pinnacle Marine and Abo Shoten ink MoU for B100 trial in Singapore

Pinnacle will carry out a 1,000-hour B100 biodiesel trial on an aluminium harbour craft in Singapore; Abo Shoten will contribute funding to support construction and operational expenses of the trial vessel.

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Pinnacle Marine and Abo Shoten ink MoU for B100 trial in Singapore

Singapore-based shipbuilding firm Pinnacle Marine on Wednesday (13 November) said it signed a Memorandum of Understanding (MOU) with Abo Shoten, Ltd. to launch a collaborative research project centred on a full biodiesel (B100) trial.

Pinnacle will carry out a 1,000-hour B100 biodiesel trial on a 16-metre aluminium harbour craft within Singapore’s port waters. Other partners are NTU’s Maritime Energy & Sustainable Development Centre of Excellence (MESD), Weichai Singapore Pte Ltd, and China Classification Society.

“As part of the agreement, Abo Shoten will contribute funding to support the construction and operational expenses of the trial vessel,” Pinnacle said in a social media post. 

“This MOU aligns with Abo Shoten’s Sustainable Development Goals, which emphasise sustainable practices, maritime decarbonisation, and environmental stewardship - principles that closely align with Pinnacle’s commitment to sustainability.”

The MOU was formally signed by the CEOs, Mr. Ren Wada of Abo Shoten and Mr. Fabian Lim of Pinnacle Marine.

“We look forward to continued collaboration with our partner in advancing maritime decarbonisation, including the construction, delivery, and successful operation of this research harbour craft powered by B100 biodiesel in our port waters,” the firm added.

Manifold Times previously reported Pinnacle signing a Research Collaboration Agreement with NTU Maritime Energy & Sustainable Development Centre of Excellence (MESD), Weichai Singapore Pte Ltd, and the China Classification Society.

Related: Biodiesel sea trial to be conducted on harbour craft in Singapore

 

Photo credit: Pinnacle Marine
Published: 14 November, 2024

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Bunker Fuel

Hercules Tanker Management plans fleet expansion with new chemical bunker tankers

Firm plans to add up to 10 IMO II Chemical Tankers that will have the ability to supply up to 100% biofuel and all forms of methanol and feature diesel-electric and battery-ready power units.

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Hercules Tanker Management plans fleet expansion with new chemical bunker tankers

Hercules Tanker Management (HTM) on Tuesday (12 November) announced plans to further expand and renew its fleet with six new vessels, and the option to build an additional four, set to be agreed later this year. 

Following last month’s announcement of the construction of four new tankers, HTM, the new shipping venture launched by John A. Bassadone, founder and CEO of independent marine fuel supplier Peninsula, is now adding a further 10 ‘ultra-spec’ vessels, in a 6+4 deal, with the first expected to be delivered in 2026. 

The 7,700 DWT IMO II Chemical Tankers will be sister ships to the four vessels announced previously, and are also being constructed in the Jiangmen Hangtong shipyard in China.

The vessels are described as ‘ultra-spec’ due to their flexible, sustainable design, which aims to minimise emissions.

All vessels will have the ability to supply up to 100% biofuel, all forms of methanol and feature diesel-electric and battery-ready power units, which, combined with advanced hull and propeller design, will reduce emissions by around 20% compared to older conventional barges.

John A. Bassadone, Founder and CEO Hercules Tanker Management and Peninsula, said: “The order of these new vessels marks another important milestone for HTM as we continue expanding and renewing our fleet, closely aligned with the needs of both HTM’s and Peninsula’s customer base.”

“We remain committed to the supply of conventional fuels, but our new assets will achieve this with lower emissions. Equally we anticipate an evolving alternative fuels market, in which we will play a leading role with specialist supply assets.”

Related: Peninsula to time-charter four tanker newbuildings from HTM
Related: Peninsula founder launches shipping firm Hercules Tanker Management
Related: Hercules Tanker Management orders LNG bunkering vessel from Hyundai Mipo

 

Photo credit: Hercules Tanker Management
Published: 14 November, 2024

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Alternative Fuels

ExxonMobil supplies Hapag-Lloyd with B25 bio bunker fuel blend in Antwerp

Firm supplied Hapag-Lloyd vessel “Colorado Express” with 1,320 mt of B25 bio marine fuel blend, which consisted of ExxonMobil’s Premium HDME 50™ fuel and waste-based FAME derived from UCOME.

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Hapag-Lloyd

ExxonMobil on Thursday (7 November) said it supplied Hapag-Lloyd’s vessel Colorado Express with 1,320 metric tonnes (mt) of a B25 bio marine fuel blend in Antwerp. 

The blend consisted of ExxonMobil’s Premium HDME 50™ fuel, a 0.10% sulphur Emission Control Area (ECA) fuel, and waste-based fatty acid methyl esters (FAME) derived from used cooking oil methyl ester (UCOME).

“The ‘drop-in’ blend met the requirements of ISO 8217:2017 with the exception of the FAME component. The FAME content complied with EN 14214,” ExxonMobil said in a statement.

“The bio component was made material certified as meeting the sustainability requirements of the RED II: feedstocks not in competition with land for food production.”

ExxonMobil’s bio marine fuel blend underwent a range of tests prior to delivery in Antwerp. 

The blend offered an estimated 20.1% well-to-wake greenhouse gas (GHG) reduction compared with conventional marine fuel formulations on an energy basis.

“Hapag-Lloyd aims at having net-zero carbon fleet operations by 2045. As part of that commitment, we are continuously looking for opportunities to onboard new bio blends in our fuels mix. We appreciate ExxonMobil’s efforts to supply us with a bio blend with ULSFO, which is another step forward in our decarbonisation journey,” said Ilyas Muhammad, Head of Green Fuels at Hapag-Lloyd. 

“We successfully bunkered bio-ULSFO blend at our Colorado Express and so far our operational experience with this product is positive. We look forward to increasing bio-ULSFO consumption in the future,” said Nikolai Doerner, Senior Manager Biofuels at Hapag-Lloyd.

The Colorado Express used the bio marine fuel blend without incident; both NOx and particulate emissions were within accepted limits.

“ExxonMobil is looking for ways to support our customers [to] reduce their GHG emissions,” said Pelin Gillis, Marine Fuels Sales Manager, BNL, ExxonMobil. “We are proud to have helped Hapag-Lloyd on their journey to a lower GHG emissions future.”

“ExxonMobil has greatly extended its range of ‘drop-in’ bio marine fuel blends,” said Armelle Breneol, Marine Fuels Technical Advisor, ExxonMobil. 

“We now offer a B25 ULSFO, a B30 VLSFO, a B7 MGO and a B10 HSFO. This will help our customers access the blend they need to meet their engine operations and GHG emission reduction goals.”

 

Photo credit: Hapag-Lloyd
Published: 8 November, 2024

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