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Argus Media: Netherlands biofuel bunker growth uncertainty lingers

Netherlands government subsidizes sales of biofuels for bunkering but the subsidies are not set in stone; they are reviewed annually and could decrease or even be scrapped.

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The inclusion of marine fuel emissions in the EU's Emissions Trading Scheme (ETS) set to begin in 2024 could drive up biofuel for bunker sales in Rotterdam, but uncertainly lingers around Netherlands biofuels marine fuel subsidies.

17 March 2023

The inclusion of maritime shipping in the EU's ETS will require ship owners traveling within the EU's territorial waters to pay for 40pc of their greenhouse emissions from 2024, rising to 70pc from 2025 and to 100pc from 2026.

Biodiesel, as a plug and play fuel, has gained traction with ship owners. Rotterdam biofuel bunker blends sales more than doubled to 791,653t in 2022 from 301,051t in 2021.

Rotterdam B20 biodiesel was priced at a $98/t average premium, or a 17pc premium to very low-sulphur fuel oil (VLSFO), in the first half of March, Argus data showed. Rotterdam B30 biodiesel was pegged at $131/t average premium or a 23pc premium to VLSFO during the same period.

The Netherlands government subsidizes sales of biofuels for bunkering. Without the Netherlands subsidies, B20 and B30 would have been priced at 41pc, or a $232/t premium, and 59pc, or a $331/t premium, to VLSFO, respectively, in the first half of March. But the Netherlands marine use subsidies are not set in stone. They are reviewed annually and could decrease or even be scrapped.

The Netherlands government excluded the maritime sector from its domestic biofuels ticket scheme in 2021 on the back of the disproportionate use of biofuels in shipping in 2020.

Fuel suppliers in the Netherlands' shipping sector can since then only claim renewable fuel units (HBEs) from biofuels that are produced from feedstock listed in Annex IX part A of the EU's revised Renewable Energy Directive (RED II), and therefore classify as advanced. The decision came after fuel suppliers obligated under the Dutch biofuels blending mandate had made increasing use of the option to claim HBEs generated by using renewable energy in seagoing shipping in 2020. Biofuels used in maritime shipping covered almost 30pc of the overall blending target in 2020.

Still, in the 2022 compliance year — which runs between April 2022 and April 2023 — around 32pc of total HBEs issued — or around 23.6mn HBE-Gs — came from the maritime sector. This prompted the Dutch government to remove brown grease, a popular feedstock used for biofuels in shipping, from the list of approved advanced feedstocks in the HBE scheme on 1 January 2023.

By contrast, Singapore, the biggest bunkering port in the world, does not offer biofuel for bunkering subsidies. Singapore biofuel marine fuel sales were at 140,000t in 2022 and data for 2021 is not available. Singapore B24, the most common biofuel bunker blend there, was assessed at $819/t average in the first half of March, 19pc and 15pc higher than Rotterdam B20 and B30, respectively (see chart).

By Stefka Wechsler and Sophie Barthel

 

Photo credit and source: Argus Media
Published: 20 March, 2023

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Biofuel

DB Schenker to ship Avolta cargo between Europe and US with bio bunker fuel

All containers that Avolta will move on the Barcelona – Miami route, using biofuel, will be shipped on low emission through application of waste-based marine biofuels and additional units of sustainable marine biofuel.

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DB Schenker

Travel retailer Avolta recently said it entered an agreement in Spain with logistics service provider DB Schenker for the transport of goods using marine biofuel between Europe and the United States.

From now on, all containers that Avolta will move on the Barcelona - Miami route, using biofuel, will be shipped on low emission through the application of waste-based marine biofuels and additional units of sustainable marine biofuel, to achieve additional compensation of the biofuel’s upstream emissions.

“This biofuel switch could prevent over 150 tons of CO2e Well-to-Wake emissions per year, based on Avolta’s 2023 container volume on this route, reducing up to 84% of the CO2 emissions,” the firm said.

The fuel used is Used Cooking oil methyl ester (UCOME) and is based on renewable and sustainable sources, mainly waste cooking oil. 

The application will be guided by the Book & Claim System, a set of principles that have been developed through a global, multi-stakeholder process with third-party validation to ensure that the use of this chain of custody model has full traceability and credibility, as well as a demonstrable climate impact.

Camillo Rossotto, Chief Public Affairs & ESG Officer Avolta, said: “We are taking a significant step forward towards decarbonising our shipments and route transportations.”

“This agreement represents the starting point of the transitioning to biofuel for ocean freight which will contribute to decarbonising our logistic emission. Our company's commitment to sustainability is firm and long-term and, as proof of this, we are planning to increase the volume of containers transported using biofuel, advancing in the sustainable and low-emission transportation industry."

Miguel Ángel de la Torre, director of maritime transport at DB Schenker in Iberia, said: "Our mission is to help, facilitate, and guide our customers in the sustainable transformation, and on this occasion, we are doing so by offering this biofuel so that they can convert their freight transport into low-emission transport.”

“In this way, our customer Avolta is not only pioneering and helping to reduce emissions but is also ahead of the new regulations and associated benefits that will be tightened in the coming years.”

 

Photo credit: DB Schenker
Published: 21 June, 2024

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LNG Bunkering

MAN Energy Solutions rejoins SEA-LNG coalition

‘MAN ES, alongside other members of the SEA-LNG coalition, are making great strides in tackling methane slip in engine technologies where it still exists,’ says Peter Keller, SEA-LNG chairman.

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MAN Energy Solutions rejoins SEA-LNG

Global multi-sector industry coalition SEA LNG on Thursday (20 June) announced that MAN Energy Solutions (MAN ES) will rejoin its coalition.  

As a provider of flexible and powerful propulsion solutions for LNG marine applications, SEA LNG said MAN ES caters to the growing demands of the shipping industry for LNG propulsion and equipment across dual fuel LNG-powered ships, LNG carriers, FRSUs, LNG feeder and bunker vessels, as well as for gas supply infrastructure. All MAN ES technology is fully compatible with net-zero biomethane and e-methane.

“MAN ES’s technical expertise adds to the technical skills and experience of SEA-LNG members, already achieving reductions in greenhouse gas (GHG) emissions. MAN ES’s two-stroke high-pressure engine technology is one of those delivering virtually no methane slip in the LNG combustion process today,” it said.

In addition, MAN ES is making significant progress in eradicating methane slip in its four-stroke engines. Over the last ten years, MAN ES has already been able to halve methane slip in its four-stroke gas engines and is aiming for a further 20% reduction by continuously improving the combustion process.

MAN ES's IMOKAT II project has secured investment from the German Federal Ministry for Economics and Climate Action to develop an after-treatment technology to further reduce methane slip from its four-stroke engines, ultimately aiming for a 70% reduction of methane emissions at 100% load.  

Stefan Eefting, Senior Vice President and Head of MAN PrimeServ Germany at MAN Energy Solutions, said: “While shipping remains the most environmentally-friendly form of transport, the many vessels powered by our technology means that MAN Energy Solutions has a special responsibility to help move the industry to net-zero; we are very happy to work with like-minded partners in achieving this.”

“Our unique ability to assess the future-fuel mix is, in great part, based on our dual-fuel engine development, which promotes LNG and other alternative green fuels that have a key role to play on the path to decarbonisation.” 

Peter Keller, SEA-LNG chairman, said: “The shipping industry’s decarbonisation drive is at a tipping point as global and regional regulations begin to impact shipowners financially.”

“As these regulatory changes continue to be felt, LNG as a marine fuel, and its decarbonisation pathway through liquified biomethane and e-methane, offers the most practical and realistic solution. The LNG solution is playing a critical role in enabling emissions reductions, starting today.”

“If we want to continue to unlock this pathway’s potential, we need the right expertise and MAN ES’s experience and insights will be critical to ensuring LNG, biomethane and e-methane firmly take their place in the basket of alternative marine fuels.”

Keller continued: “We are proud to represent the entire LNG value chain, and the addition of MAN ES only adds to our roster of industry-leading first movers to promote the LNG pathway. In particular, MAN ES, alongside other members of the SEA-LNG coalition, are making great strides in tackling methane slip in engine technologies where it still exists. With constant advances in technology, we are confident the issue of methane slip can be solved within this decade.” 

 

Photo credit: MAN Energy Solutions
Published: 21 June, 2024

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Bunker Fuel

LR report highlights potential of LPG as bunker fuel in delivering emission reduction

Study, however, outlines that technology readiness will need to improve for LPG to become a viable choice for shipowners and operators looking to transition their fleet to low and zero-carbon vessels.

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LR report highlights potential of LPG as bunker fuel in delivering emission reduction

Using liquefied petroleum gas (LPG) as a marine fuel could deliver a significant carbon reduction, particularly alongside other emissions reduction and energy saving technologies, helping shipowners comply with more stringent regulations into the next decade, according to Lloyd’s Register recently.

The Fuel for Thought: LPG, a joint report from Lloyd’s Register (LR) and the World Liquid Gas Association (WLGA) has found that the market for dual-fuel LPG engines will continue to grow based on a healthy orderbook, with LPG offering a cleaner, lower carbon emission marine energy source than many alternatives currently available.

According to the report, the use of LPG as a marine fuel combined with technology such as Onboard Carbon Capture and Storage (OCCS) can reduce a vessel’s emissions profile, with the added benefit of reducing the required CO2 storage capacity, due to the lower CO2 emissions from LPG combustion. This allows the technology to work more effectively and offers shipowners a pathway towards future regulatory compliance.  

The report, however, outlines that technology readiness will need to improve for LPG to become a viable choice for shipowners and operators looking to transition their fleet to low and zero-carbon vessels.  

Although well established, the range of available engine technologies will need to be expanded to enable widespread adoption of LPG on multiple vessel types. 

Currently there is no four-stroke marine engine capable of using LPG, meaning auxiliary engines on vessels would need to be decarbonised through an additional fuel.

A safe bunkering framework must be also developed to encourage uptake of LPG. Regulations remain in their early stages, with interim guidelines recently published by IMO.

Panos Mitrou, Global Gas Segment Director, Lloyd’s Register, said: “The pace and scale of renewable production for LPG remains a critical factor in initiating the wider adoption of LPG as a marine fuel.”

“Supportive energy-saving technologies, as along with potentially maturing onboard carbon capture and storage, will further assist in making LPG a viable low-zero carbon fuel.”

“By ensuring this, LPG could offer attractive operating and capital costs compared to other alternative fuels as shipowners look to decarbonise their fleets in line with more stringent regulations."

Nikos Xydas, World Liquid Gas Association Technical Director, said: “LPG stands as a unique and exceptional energy source, pivotal for decarbonising the shipping sector.”

“Stored and transported as a liquid and consumed as a gas, it is well recognised for its lower emission benefits as a marine fuel. With a surge in orders for LPG-fuelled ships, it's clear that LPG's role in the shipping industry is expanding.”

“As the world moves towards deep decarbonisation targets, LPG emerges as an ideal fuel for all vessel types, offering a cleaner alternative fuel today and a pathway for an even cleaner future tomorrow.”

“Its flexibility, low emissions, and cost-effectiveness position LPG as the potential fuel of choice in the shipping sector, paving also the way for low-cost deep-sea decarbonisation with the advent of bio/renewable LPG.”

Note: The ‘Fuel for Thought: LPG’ report can be found here.

 

Photo credit: Lloyd’s Register
Published: 21 June, 2024

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