Business

Argus Media viewpoint: US biofuels bunker demand seen muted

Demand from larger, ocean-going vessels will likely remain muted from a lack of US biofuel bunkering subsidies and strong international competition, says Stefka Wechsler.

Published

2 years ago

December 27, 2022

Admin

Biofuels used for bunkering could see an uptick in use in New York and California in 2023, driven by smaller, harbor vessel demand, but demand from larger, ocean-going vessels will likely remain muted from a lack of US biofuel bunkering subsidies and strong international competition.

23 December 2022

Harbor supply vessels — including ferries, tug boats, bunker barges and dredgers, among others — ply US territorial waters burning ultra-low sulphur diesel (ULSD). They are also allowed to burn B30 biodiesel made from blending 70pc ULSD and 30pc US-price subsidized biodiesel.

Rising ULSD prices in New York could drive up interest in B30 blends this winter. A B30-ULSD blend was pegged at $8.80/t discount to outright ULSD in New York in November, Argus data showed.

In October and early November, US Atlantic coast distillate inventories dropped to their lowest levels since May and April this year and approached their prior multi-decade lows of April 1996, amid steep backwardation that discouraged storage. Global diesel supplies have been tight because of Russia’s ongoing conflict with Ukraine. The EU ban on Russian petroleum products imports set to take effect on 5 February should tighten US Atlantic and Gulf coasts distillate inventories in the first half of next year.

Separately, California will require commercial harbor craft vessels in the state to burn renewable diesel (R99) instead of ULSD starting on 1 January. The state’s environmental agency California Air Resource Board (CARB) forecasts harbor craft vessel demand for R99 in California at 3,562 b/d in 2023. In November, Argus assessed R99 at a $213.60/t premium to ULSD in Los Angeles.

Little to no large ship demand

Despite the expected uptick in New York and California demand, demand for US biofuel for bunkering by ocean-going vessels is expected to remain muted next year.

Globally, interest in biofuels as low-carbon bunker fuels alternatives has grown, because unlike methanol, ammonia and LNG, biofuels are plug-and-play fuels that do not require vessel retrofitting. But ocean-going vessels such as container ships, dry bulk carriers and oil tankers are currently not allowed to purchase US-tax payer subsidized biodiesel. This is because ocean-going vessels would burn the bulk of the fuel in international waters, instead of in US territorial waters.

In November, B30, a blend of 30pc un-subsidized biodiesel and 70pc VLSFO was pegged at $1,133/t in the US Gulf coast, compared to $762/t in Amsterdam-Rotterdam-Antwerp. If ocean-going vessels were allowed to buy US-subsidized biodiesel, B30 in the US Gulf coast would have cost them $785/t in November, Argus data showed. Rotterdam sold 522,167t of biodiesel blends in the first nine months of 2021 compared with the US, where ship owners have been only occasionally trialing burning biodiesel. The lack of biodiesel bunker demand in the US is expected to remain in 2023.

Another low-carbon marine fuel option deemed feasible by the marine shipping industry is green methanol, which includes bio-methanol and e-methanol. Bio-methanol is made from sustainable biomass feedstocks and e-methanol is derived from renewable electricity and CO2.

Currently, green methanol prices are not competitive with conventional marine fuel prices. But grey methanol — produced using natural gas and coal — has been cheaper than marine gasoil (MGO). Grey methanol was assessed 26pc cheaper than MGO, or $264/t below MGO in November in the US Gulf, Argus assessments showed. Burning grey methanol does not significantly reduce CO2 emissions compared with MGO, but grey methanol does not contain sulphur and can substitute MGO, which has 0.1pc sulphur maximum limit in US territorial waters.

Ship owners looking to commission new vessels can invest in dual-fuel methanol burning vessels, substitute their MGO burn with grey methanol to reduce their bunker costs, while waiting to see if green methanol prices ease. Demand for grey methanol for bunkering could see an uptick in the US Gulf.

By Stefka Wechsler

Photo credit and source: Argus Media
Published: 27 December, 2022

Newbuilding

Tsuneishi delivers world’s first methanol dual-fuel Ultramax bulker to NYK

“Green Future” was delivered at Tsuneishi factory on 13 May and will be chartered by NYK Bulk & Projects Carriers, an NYK Group company, from Kambara Kisen.

Published

23 hours ago

May 15, 2025

Admin

Tsuneishi delivers world’s first methanol dual-fuel Ultramax bulker to NYK

Tsuneishi Shipbuilding on Wednesday (14 May) said it has delivered the world’s first methanol dual-fuel Ultramax bulk carrier, Green Future.

The 65,700 dwt vessel was delivered at its factory on 13 May and will be chartered by NYK Bulk & Projects Carriers, an NYK Group company, from Kambara Kisen.

Tsuneishi Shipbuilding said the vessel maintains the high cargo capacity and fuel efficiency characteristic of the TESS66 Aeroline design series, while enabling more sustainable operations through the use of methanol as a fuel.

The methanol fuel tank has been positioned to maximise safety and facilitate smooth cargo handling while maintaining loading efficiency. It is also equipped with a fuel-efficient main engine and Tsuneishi’s proprietary Aeroline technology to reduce wind resistance, delivering superior fuel performance.

Mr Okumura Sachio, Representative Director, President & Executive Officer of Tsuneishi Shipbuilding, said: “This delivery marks just the beginning. We will continue constructing methanol dual-fuelled vessels at our overseas facilities and remain steadfast in our pursuit of technological innovation to contribute to a more sustainable maritime industry and global environment.”

NYK said the vessel is the first bulk carrier in the NYK Group to be equipped with a dual-fuel engine that uses methanol and fuel oil.

Vessel Particulars

LOA: 199.99 m
Breadth: 32.25 m
Depth: 19.15 m
Deadweight: approx. 65,700 metric tonnes
Capacity: approx. 81,500 m3
Draft: 13.8 m

Photo credit: Tsuneishi Shipbuilding
Published: 15 May, 2025

Events

Green Shiptech China Congress to explore alternative bunker fuels and ship technologies

LNG, methanol and ammonia as well as fuel cell integration will be among key issues discussed at the annual conference which will be held on 25 to 26 September in Shanghai.

Published

23 hours ago

May 15, 2025

Admin

Ridge China on Wednesday (14 May) announced it will be hosting the 14th Green Shiptech China Congress (GSCC), an annual conference which will be held on 25 to 26 September in Shanghai.

More than 4,400 experts and decision makers from governments, classification societies, shipowners, shipyards, research institutes, technology/equipment suppliers and consulting companies attended the previous GSCC from 2012 to 2024.

For 2025, over 400 industry experts, corporate decision makers and government officials will be engaged in comprehensive discussions on current issues of IMO, EU, USCG, China MSA’s policies and regulations, designs and standards for new ship models, innovative and sustainable green ship technologies at this annual conference.

Alternative bunker fuels such as LNG, methanol and ammonia as well as fuel cell integration will be part of the important issues discussed at the event.

Speakers will be from

IMO
European Commission
U.S. Coast Guard
China MSA
Financial Institutions
Maritime Research Institutes
Solution & Technology Providers
Shipowners
Shipyards
Classification Societies

Key topics

Policies and Regulations Update and Interpretate by IMO, European Commission, U.S. Coast Guard and China MSA
Retrofitting Vessels to Achieve Decarbonization Goals
Energy Efficiency Continues to Be Key for Decarbonization
Decarbonization Through Digitalization
Digital Technologies As a Key Enabler for Emissions Reduction
Impact of a Hull Coating Upgrade on Hull Efficiency
LNG As Marine Fuel: Pivoting Towards Cleaner Shipping
Methanol As a Marine Fuel
Ammonia’s Credentials As a Green Fuel
Wind Propulsion Technology
Fuel Cell Integration: Upcoming Challenges and Opportunity
Propelling Carbon-neutral Shipping with Green Engines and Alternative Fuels
Next-generation Electric and Hybrid Marine Propulsion Technologies and Components
Latest Developments in Energy Storage Systems

Interested parties may contact:

Mr. Quin Xu
Tel: +86 21 6607 8610 -8003
Mob: +86 13564222811
Email: [email protected]

Note: The English and Chinese version of the event website can be found here and here respectively while the event registration can be found here.

Photo credit: Ridge China
Published: 15 May, 2025

Bunker Fuel

TFG Marine to launch bunker fuel supply operations in Jamaica on 1 June

Firm will commence marine fuel supply operations at Port of Kingston and on north coast of Jamaica, with Scott Petroleum, a local supplier with insight into Caribbean bunker market.

Published

24 hours ago

May 15, 2025

Admin

TFG Marine to launch bunker fuel supply operations in Jamaica from 1 June

Global marine fuel supply and procurement firm TFG Marine on Wednesday (14 May) said it will launch its bunkering service in Jamaica with its local partner, Scott Petroleum.

The marine fuel supply operations will commence at the Port of Kingston as well as on the north coast of Jamaica, from 1 June.

“The operation is being launched in partnership with Scott Petroleum, a trusted local supplier with over two decades of experience and unmatched insight into the Caribbean bunker market,” it said in a social media post.

Very Low Sulphur Fuel Oil (VLSFO), High Sulphur Fuel Oil (HSFO) and Low Sulphur Marine Gas Oil (LSMGO) fuels will be sourced locally from the Petrojam Limited-operated Kingston refinery and will be supplied via the bunker barge operated by Scott Petroleum.

“By combining Scott Petroleum’s local insight with TFG Marine’s global expertise and commitment to innovation, this new venture aims to set a new benchmark for marine fuel supply in the region, delivering reliable, efficient and transparent bunkering services to vessels calling at this key Caribbean port,” the company said.

Kenneth Dam, Head of Bunkering at TFG Marine, said: “We’re very happy to be setting up in Jamaica,” It’s a strategic location with strong demand and teaming up with Scott Petroleum means that we can hit the ground running with an existing reliable, well-run operation.

“We’re looking forward to bringing TFG Marine’s global expertise and fuel supply innovation to the Caribbean, and to raising the standard of service for marine fuel customers across the region.”

Gary Scott, CEO at Scott Petroleum, said: “We are excited about our partnership with TFG Marine. The new venture will form a strong force to expand the bunker service being offered in Jamaica and will be able to capture other opportunities that exist in the region”

Note: For inquiries regarding TFG Marine’s new vessel supply services in the region in collaboration with Scott Petroleum, contact [email protected] or [email protected].

Photo credit: TFG Marine
Published: 15 May, 2025