Connect with us

Biofuel

ENGINE: Biofuel bunkers are making waves

ENGINE team launched a project to map out all the physical bunker suppliers that offer biofuels in ports and investigated what was available in different regions.

Admin

Published

on

RESIZED Shaah Shahidh on Unsplash

As a growing part of the shipping industry is exploring ways to trim its carbon footprint, the ENGINE team reports that biofuels are making waves and finding their way to bunker ports around the world.

We often get asked variants of the question: "Where can we bunker biofuels?"

For every region and port that was enquired about, we had to investigate what was available. As the information accumulated in leaps and bounds, we decided to launch a project to map out all the physical bunker suppliers that offer biofuels in more and more ports.

It’s a moving target, and this is some of what we have uncovered so far.

East of Suez

266810eb 8bdd 4ae6 87a5 6963a1d3ae64 1200w

Biofuels are starting to become more common in Singapore, but so far they have only made up a fraction of the port’s total bunker sales. B24 (24% biofuel) is the standard blend ratio as sea-going bunker barges are restricted to carrying 25% biofuel and as suppliers seek to err on the safe side of that requirement. Prices are often quotes as a premium over very low sulphur fuel oil (VLSFO) and the typical biofuel grade is fatty acid methyl ester (FAME), which is also called biodiesel.

A couple of Chinese bunker suppliers have started offering biofuel blends for delivery in Zhoushan and Guangzhou, and another two have brought them to Hong Kong. As biofuel blends don’t qualify as bonded bunkers in mainland China, in which value added tax (VAT) is waived for VLSFO, it makes less sense for Chinese refiners and blenders to blend them with VAT-exempt VLSFO. The suppliers therefore import finished B24-VLSFO blends from Singapore and other places before they are sold in Chinese ports.

B35-MGO blends are available in Indonesian ports because of a national 35% minimum biofuel blending mandate. But these derive from palm oil and are not sustainable. Palm oil’s close connection to deforestation means they won’t qualify under the International Sustainability and Carbon Certification (ISCC) programme or as renewable fuels towards upcoming European Union (EU) regulations.

In the Middle East there is one major producer and wholesaler of waste-based biofuels. The UAE-based producer has struck supply deals with two physical bunker suppliers in the country, where it collects used cooking oil (UCO) from McDonalds restaurants and other sources. One of the suppliers has so-called ISCC-certification, which requires the biofuel to meet certain sustainability criteria throughout its lifecycle. From a small base, the producer says that bunker demand has doubled in each of the past three years, and that demand is expected to grow exponentially in the years to come.

Europe & Africa

16a13c7a 84cb 4dd1 87b4 cdca94ca57ce 1200w

Rotterdam dominates the global biofuel bunkering scene. Around 6% of all of the bunkers sold in the first half of this year was blended with biofuels, and that was down from an even stronger 8% last year. More biofuel trials and regular refuelling of ships have taken place in Rotterdam than in any other port and a greater number of suppliers offer biofuels there.

Local biofuel processing capacity, imports from China and competition between bunker suppliers in a burgeoning biofuel bunker market provide economies of scale in Rotterdam and contribute to keep prices in check.

But perhaps the biggest reason behind its growth is simple. Rotterdam is Dutch, and the Netherlands has generous market mechanisms in place for biofuels sold for bunkering, particularly for advanced waste-based biofuels. In fact, the price incentives have worked too well and pulled biofuel feedstock away from the road fuels market. The road fuels market faces tougher blending mandates, and more biofuels are needed to meet them, the government told ENGINE.

To rebalance the biofuel scales between road and marine, the Dutch government has launched a consultation with a proposal that could effectively halve the biofuel rebate multiplier. This could see Rotterdam’s discount of more than $200/mt to Singapore be slashed to about half that.

Mediterranean bunker suppliers are also starting to catch the biofuel wave. A few suppliers across Gibraltar, Spain, Malta and Italy now offer blends. Some typically need a week or two of lead time to source, blend and deliver the fuel to ships. One supplier has struck a deal with a ferry company that has tested biofuels blended in small ratios on a ferry with the upcoming FuelEU Maritime regulation in mind.

A lack of biofuel demand in South Africa and Mozambique has meant that suppliers have so far held back on bringing it to market. Some are saying they hope to pursue biofuel in the future.

Americas

US biofuel bunkering is struggling to gain traction in the absence of government subsidies. While harbour crafts and road vehicles enjoy subsidies, ocean-going vessels do not. This has meant that comparable B30 biofuel blends have been prohibitively expensive in Houston compared to Rotterdam for example.

Unlike Rotterdam and the rest of the EU’s upcoming CO2 and greenhouse gas (GHG) regulations, there are also no nationwide US environmental regulations to incentivise uptake of biofuel blends by ships. Customer demand will therefore likely come from ship types close to the end consumer, like ferries, cruise ships and container ships.

Some bunker suppliers have already announced readiness or intent to offer. These include California, where local environmental regulations have boosted uptake of 99% renewable diesel (R99), which differs from FAME in that it is not chemically esters. Canada’s Vancouver, the US Gulf Coast, Colombia’s Cartagena and Brazil make up some of the other places with biofuels on offer.

The Panama Canal is likely the biggest bunker area in the Americas, but a joint venture of companies that was previously buoyant about the prospect of building at least one biorefinery and importing biofuels for bunkering and other transport fuel markets has more recently cast doubts about its feasibility. "The issue is feedstock and competing with current subsidies in the US and EU markets that hog and distort [the] price of feedstock," one of the companies told ENGINE.

Meanwhile, a recent entrant to the US Gulf Coast’s biofuel bunker market has been championing a mass balancing approach. Its pricing is based on the feedstock type, but thanks to mass balance accounting the feedstock purchased does not necessarily need to be the feedstock in the fuel consumed by that buyer’s ship. Blends based on UCO, soybean oil and tallow are current options, and more waste-based biofuel alternatives is expected to follow in the future.

To help shipowners get more clarity around what’s available where, ENGINE will come out with more detailed overviews of biofuel bunker supply by region and port later this year.

By the ENGINE team: Shilpa Sharma, Nithin Chandran, Queeneerich Kharmawlong, Konica Bhatt, Debarati Bhattacharjee, Aparupa Mazumder, Tuhin Roy and Erik Hoffmann

Source: ENGINE
Photo credit: ENGINE / Shaah Shahidh on Unsplash
Published: 16 October, 2023

Continue Reading

Bunker Fuel

ENGINE on Fuel Switch Snapshot: LNG costlier than VLSFO

Singapore’s VLSFO price is cheaper than LNG; LNG approaches parity with VLSFO in Rotterdam; price gap between biofuel and LNG shrinks.

Admin

Published

on

By

ENGINE on Fuel Switch Snapshot: LNG costlier than VLSFO

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:

27 May 2024

  • Singapore’s VLSFO price is cheaper than LNG
  • LNG approaches parity with VLSFO in Rotterdam
  • Price gap between biofuel and LNG shrinks

LNG bunker benchmarks in Rotterdam and Singapore continue to rise sharply.

With estimated EU Allowance (EUA) costs included in bunker fuel costs, Singapore's LNG bunker price has surged $34-37/mt in the past week after a $29-30/mt jump the week prior.

After adjusting the price for calorific contents to become VLSFO-equivalent, Singapore's LNG price has flipped to a premium of $29-36/mt over its VLSFO in the past week, from a $30-36 discount noted a week prior.

Rotterdam's fossil LNG bunker price has closed even further on VLSFO by $33-34/mt over the past week, making it only $20-33/mt cheaper than VLSFO now.

Biofuel price premium in Singapore over fossil LNG has dropped by another $61-62/mt to $75-81/mt in the past week. In Rotterdam, the bio-bunker premium over LNG has narrowed by $11/mt to $156-168/mt.

VLSFO

Rotterdam's VLSFO price has mostly followed Brent's downward movement over the past week. Rotterdam’s VLSFO benchmark has declined by $11-18/mt in the past week, depending on whether the estimated EUA costs are included.

Availability of VLSFO is normal in Rotterdam, with lead times of 3-5 days recommended to ensure full coverage from suppliers, a trader said.

Singapore’s VLSFO benchmark has also tracked Brent’s movement, falling $32/mt over the past week.

Lead times for VLSFO in Singapore have exhibited significant fluctuations recently. Most suppliers now recommend lead times of up to 10 days for this grade, while some can accommodate stems within five days.

Biofuels

Rotterdam’s B24-VLSFO HBE bunker price has inched $5/mt higher in the past week. When we add estimated EUA costs, the price has gained $8-10/mt, depending on whether we are looking at voyages between EU ports or between EU ports and non-EU ports.

A huge gain in the price of palm oil mill effluent methyl ester (POMEME) feedstock – qualified for Dutch HBE rebates – has pushed the price higher. PRIMA-assessed POMEME price in the ARA has jumped by $70/mt to $1,368/mt in the past week.

In contrast, Singapore’s B24-VLSFO UCOME bunker price has slumped by $25-28/mt, depending on whether the price is adjusted with estimated EUA costs.

The price has declined amid a $10/mt drop in UCOME FOB China, according to PRIMA Markets. Chinese biodiesel exports to the EU are being investigated by the European Commission for "unfairly traded biodiesel". The ongoing investigation has dented Chinese biodiesel inflows into European countries.

LNG  

Rotterdam and Singapore’s LNG bunker prices have seen significant upticks in the past week.

Rotterdam’s LNG bunker benchmark has climbed $16-22/mt higher, depending on whether estimated EU ETS costs are included in the cost of fuel. This increase has been driven by the underlying front-month NYMEX Dutch TTF Natural Gas benchmark, which has seen an uptick due to heavy maintenance activities at Norwegian gas facilities.

Singapore’s LNG bunker benchmark has risen by a staggering $34-37/mt in the past week. The movement is influenced by the upward trend in the underlying Japan/Korea Marker (JKM) gas benchmark and prevailing trends in the Asian LNG market.

Analysts at ANZ Bank noted that “the rally in global gas prices continued amid ongoing buying from importers.” Importers such as Japan and South Korea are restocking gas inventories ahead of the Northern Hemisphere summer, further driving demand.

By Konica Bhatt

 

Photo credit and source: ENGINE
Published: 28 May 2024

Continue Reading

Biofuel

Japan: NYK begins first long-term bio bunker fuel test run on VLCC

VLCC “Tenjun” received an initial supply of biofuel in Singapore and will continue to use biofuel bunker for three months to comprehensively verify the safe and stable procurement of biofuel for long-term use.

Admin

Published

on

By

Japan: NYK begins first long-term bio bunker fuel test run on VLCC

Nippon Yusen Kabushiki Kaisha (NYK) on Monday (27 May) said it began a long-term biofuel test run on its very large crude oil tanker (VLCC) Tenjun on 2 May. 

The vessel received an initial supply of biofuel in Singapore and will continue to use biofuel for approximately three months to comprehensively verify the safe and stable procurement of biofuel for long-term use.

“NYK has conducted many short- and long-term safety trials of biofuel use on bulk carriers, car carriers, and liquefied petroleum gas (LPG) carriers, but this was the first time an NYK-operated VLCC has engaged in a long-term biofuel trial,” the firm said on its website.

Biofuels are made from organic resources (biomass) of biological origin, such as agricultural residues and waste cooking oil, and are considered to have 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 added.

Vessel Particulars

Length : 330.00 metres
Width : 60.00 metres
Gross tonnage: 159,927 tonnes
Deadweight tonnage: 302,108 tonnes
Year built: 2008
Shipbuilder: IHI Marine United Shipbuilding Corporation (Kure City, Hiroshima Prefecture)

 

Photo credit: NYK
Published: 27 May 2024

Continue Reading

Bunker Fuel

ScanOcean to supply B15-DMA bunker fuel for Lakeway Link RoRo service

Both will partner on the use of B15-DMA, a marine fuel with 15% renewable content, for Lakeway Link’s new RoRo service connecting Södertälje, Sweden, and Gdynia, Poland.

Admin

Published

on

By

215

Lakeway Link AB on Friday (24 May) announced a new partnership with Swedish supplier of marine fuels ScanOcean AB on the introduction of B15-DMA, a marine fuel with 15% renewable content, for Lakeway Link's new roll-on/roll-off (RoRo) service connecting Södertälje, Sweden, and Gdynia, Poland.

Under the agreement, ScanOcean AB will supply the B15-DMA fuel, meeting the stringent ISO 8217 compatibility standards and boasting a ISCC-EU certification. 

The fuel not only supports the reduction of greenhouse gas emissions, as mandated by the EU ETS obligations, but also significantly improves the Carbon Intensity Indicator (CII) and Clean Shipping Index (CSI) scores for vessels. The fuel is also compatible towards the upcoming FuelEU Maritime regulations.

The deliveries of B15-DMA will be made in Södertälje, Sweden, to the M/S Lakeway Express, thereby kickstarting the utilisation of this innovative fuel. This partnership underscores both companies’ commitment to environmental sustainability that goes beyond compliance.

Fredrik Hermansson, CEO of Lakeway Link AB, said: “Our decision to partner with ScanOcean AB and begin using B15-DMA fuel is a pivotal step in our journey towards reducing our environmental impact. This initiative not only aligns with our sustainability goals but also sets a new standard in the maritime industry for environmental responsibility.”

Jonatan Karlström, Managing Director of ScanOcean AB, said: “We are thrilled to partner with Lakeway Link AB as they embark on their new ro-ro service. This collaboration is not just a business milestone but a significant leap forward in our mission to provide sustainable fuel solutions. With our new product offerings, we are dedicated to leading the charge towards a greener maritime industry.”

 

Photo credit: Lakeway Link
Published: 27 May 2024

Continue Reading
Advertisement
  • Aderco advert 400x330 1
  • Consort advertisement v2
  • SBF2
  • v4Helmsman Gif Banner 01
  • EMF banner 400x330 slogan
  • RE 05 Lighthouse GIF

OUR INDUSTRY PARTNERS

  • 102Meth Logo GIF copy
  • Singfar advertisement final
  • Triton Bunkering advertisement v2
  • HL 2022 adv v1


  • E Marine logo
  • Auramarine 01
  • Innospec logo v6
  • Cathay Marine Fuel Oil Trading logo
  • CNC Logo Rev Manifold Times
  • Victory Logo
  • Energe Logo
  • MFA logo v2
  • Central Star logo
  • endress
  • Headway Manifold
  • 400x330 v2 copy
  • Advert Shipping Manifold resized1
  • VPS 2021 advertisement

Trending