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Argus Media: European marine biodiesel prices converge

Market participants said uncertainty was a factor lending measured support to prices in recent weeks, eventually settled by decision by Dutch government to reduce multiplier for bio bunker fuels from 2024.

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Marine biodiesel blend price spreads converged along regional lines in November, as traded values eased in the west Mediterranean but held ground in northwest European ports.

1 December 2023 

The price of B24, a blend comprising 76pc very-low sulphur fuel oil (VLSFO) and 24pc used cooking oil methyl ester (Ucome), fell to $775.67/t, dob Algeciras-Gibraltar, on 15-30 November from $783.68/t in the two weeks prior.

The price slipped on the back of thinning trading activity as a consequence of limited marine biodiesel bunkering demand in the region, according to market participants. And unbalanced upstream fundamentals on the VLSFO and Ucome markets weighed on market fundamentals for the B24 blend.

Easing prices for marine biodiesel in the Mediterranean were not mirrored in northwest Europe. Argus assessed B30 (Ucome) fob ARA, which combines the European benchmark biodiesel assessment and fob VLSFO barge prices, at an average of $764.32/t in the second half of November — higher by $4.54/t from the average in 1-14 November.

Market participants reported firmer demand in Antwerp for the B30 (Ucome) fob ARA blend, ahead of introduction of the EU emissions trading system (ETS) regulations.

Argus assessed Ucome fob ARA range barges at an average of $1,262.25/t in the second half of November, higher by nearly $40.50/t than the average on 1-14 November as market participants held onto storage with an eye on a contango structure into 2024. As a consequence, the premium commanded by B24 dob Algeciras-Gibraltar to B30 (Ucome) fob ARA narrowed to $11.34/t (or 1.5pc) from $23.90/t (or 3.16pc) in the same timeframe.

The price convergence translated more prominently on the advanced biodiesel marine blend. The B30 advanced fatty acid methyl ester (Fame) 0°C CFPP dob ARA price — which incorporates a significant price deduction for advanced Dutch renewable fuel (HBE-G) tickets, which are available for those domestically blending biofuels produced from feedstocks listed in Annex IX Part A of the EU's Renewable Energy Directive (RED II) — rose to an average of $671.56/t in the second half of the month, from $660.68/t on 

1-14 November.

Market participants said uncertainty was a factor lending measured support to prices in recent weeks, eventually settled by the decision by the Dutch government to reduce the multiplier for biofuels in maritime shipping to 0.4 from 2024. Those in the market have sought to take advantage of the current multiplier of 0.8 before the year ends. B30 advanced Fame dob ARA prices should rise further in 2024 regardless of demand for the blend components, based on a lesser reduction in the HBE-G value that is deducted from the total.

Argus assessed B24 dob Algeciras-Gibraltar at a premium of $104.10/t (or 15.51pc) to the B30 advanced Fame dob ARA on 15-30 November, narrowing from the $123/t (or 18.66pc) premium held in the two weeks prior.

By Hussein Al-Khalisy

Photo credit and source: Argus Media
Published: 4 December, 2023

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Biofuel

NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Firm said it has started a biofuel test run on Noshiro Maru, operated by Tohoku Electric Power, marking the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility firm.

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NYK conducts first Japan bio bunker fuel trial on coal carrier for domestic power utility firm

Japanese shipping firm NYK on Monday (10 February) said it has started a biofuel test run on its coal carrier Noshiro Maru, which is operated by Tohoku Electric Power on 9 February.

This is the first time in Japan that a coal carrier has been used to test biofuel for a domestic power utility company. Mitsubishi Corporation Energy in the Keihin area facilitated the supply of biofuel for the vessel.

Biofuels are made from organic resources (biomass) of biological origin, such as agricultural residues and waste cooking oil, and are considered to produce virtually zero carbon dioxide (CO₂) emissions when combusted.

“Since they can be used in heavy-oil-powered ship engines, which are common on large merchant ships, biofuels are considered a key means of reducing greenhouse gas (GHG) emissions in the transition period from heavy oil to zero-emission fuels,” NYK said. 

“Using biofuel to reduce GHG emissions during sea navigation also contributes to reducing Scope 3 GHG emissions generated by transporting customers’ cargo.”

NYK added it will continue to focus on introducing biofuels and other next-generation fuels, and will contribute to reducing GHG emissions in our customers' supply chains while promoting decarbonisation in marine transport.

 

Photo credit: NYK
Published: 11 February, 2025

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Biofuel

IBIA welcomes IMO move to draft guidance change on carriage of bio bunker fuels

IBIA welcomed agreement by IMO’s Sub Committee on PPR 12 to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships.

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The International Bunker Industry Association (IBIA) on Monday (10 February) said it submitted a document to IMO on the carriage of biofuels for supply to a ship for use as fuel oil on board that ship in November 2023.

This highlighted that as conventional bunker vessels were limited in carrying fuel oil of no more than 25% biofuel it presented a potential impediment to the global adoption of biofuels as fuel oil for ships and so to the ambition for the decarbonization of international shipping in the short term, as set out in the 2023 IMO GHG Strategy.

“IBIA therefore welcomes the agreement by IMO’s Sub Committee on Pollution Prevention and Response (PPR 12) to draft Interim Guidance on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships,” it said on its website. 

The guidance allows conventional bunker ships certified for carriage of oil fuels under MARPOL Annex I to transport blends of not more than 30% by volume of biofuel, as long as all residues or tank washings are discharged ashore, unless the oil discharge monitoring equipment (ODME) is approved for the biofuel blend(s) being shipped. 

“The Interim Guidance is expected to be approved by IMO’s Marine Environment Protection Committee (MEPC 83) in April,” IBIA added. 

“IBIA’s membership represents stakeholders from across the global marine fuel value chain, and being able to draw on this technically strong and credible resource will, in its role of having consultative status to the IMO, mean that IBIA will continue to bring important matters to the attention of the wider IMO membership for due consideration.”

 

Photo credit: International Bunker Industry Association
Published: 11 February, 2025

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Alternative Fuels

ENGINE on Fuel Switch Snapshot: Liquid fuel prices drop

VLSFO availability improves in Singapore; B100 cheaper than HSFO with EU regulations; LNG becomes costliest fuel option in Rotterdam.

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ENGINE on Fuel Switch Snapshot: Liquid fuel prices drop

Once a week, bunker intelligence platform ENGINE will publish a snapshot of alternative and conventional bunker fuel prices in the world’s two biggest bunkering hubs. The following is the latest snapshot:

  • VLSFO availability improves in Singapore
  • B100 cheaper than HSFO with EU regs
  • LNG becomes costliest fuel option in Rotterdam

B100 (100% biofuel) is now $32/mt cheaper than HSFO in Rotterdam when factoring in EU ETS compliance costs and FuelEU pooling benefits for voyages between two EU ports.

EU regulations make liquid biomethane (LBM) $121/mt cheaper in Rotterdam than HSFO, but only if used in a diesel slow-speed (SS) marine engine with the lowest methane slip of 0.2%.

If the fuel is used in an Otto medium-speed engine with a 3.1% methane slip, LBM is actually $14/mt more expensive than HSFO, even with regulatory benefits.

ENGINE on Fuel Switch Snapshot: Liquid fuel prices drop

Regardless of the engine type, Rotterdam's VLSFO-equivalent liquefied natural gas (LNG) benchmark is now more expensive than all conventional fuels.

Even when accounting for the EU ETS and FuelEU penalties and considering that the fuel is used in a diesel SS engine, the theoretical price of LNG remains $66/mt higher than VLSFO and only $1/mt cheaper than LSMGO.

Liquid fuels

Rotterdam's VLSFO-equivalent B100 price has declined by $66/mt, while Singapore’s price has dropped by $10/mt over the past week.

PRIMA Markets assessed the Dutch HBE rebate for B100 in Rotterdam at $369/mt on Friday, marking a $12/mt increase from the previous week.

Rotterdam’s VLSFO price has remained relatively stable, with only a modest $4/mt decline—smaller than the $7/mt drop seen in the front-month ICE Brent futures contract.

Singapore has seen a larger $16/mt drop, partly due to improved VLSFO availability. Recommended lead times for the grade have shortened from 7–11 days last week, to 4–8 days now.

Liquid gases

Rotterdam’s LNG price has climbed for a third week in a row, this time by $26/mt over the past week. This increase is linked to a 3% rise in the front-month Dutch TTF Natural Gas contract, a key European gas benchmark.

The Dutch TTF benchmark has risen due to increased demand due to colder weather and increased draws from underground gas reserves in Europe.

Singapore’s VLSFO-equivalent LNG price has also climbed by $12/mt in the past week. “The rise can be attributed to updated forecasts of colder weather in Japan and higher gas prices in Europe,” Rystad Energy said.

By Konica Bhatt

 

Photo credit and source: ENGINE
Published: 11 February, 2025

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