Biofuel

ENGINE: Knowledge gaps are hidden barriers to biofuel term contracts, says FincoEnergies

Lack of knowledge on pricing, quality and product availability for biofuels is leading to hesitation in signing term agreements, FincoEnergies told ENGINE.

Published

2 years ago

November 18, 2024

Admin

Lack of knowledge on pricing, quality and product availability for biofuels is leading to hesitation in signing term agreements, FincoEnergies told ENGINE.

When it comes to biofuels, a lack of knowledge and visibility on biofuel prices is one of the main reasons shipping companies are hesitant to close term contracts today, Johannes Schürmann, commercial director of FincoEnergies’ marine division said.

“We have pitched to quite a few customers about closing a term contract, maybe a 1- or 2-year contract based on one biofuel pricing index, but we haven’t succeeded,” Schürmann explained. “The main reason is that internally, they need board approval to lock in certain price levels. They prefer using a floating price with a fossil index, like ICE Gasoil plus a fixed premium, to calculate their exact financial exposure.”

While some globally accepted pricing indexes for biofuels exist, shipping companies often lack access to these essential price points. And without reliable pricing information, these companies struggle to make informed decisions, making them reluctant to engage in long-term commitments.

“The main reason is they have no clue [about] the pricing indexes in biofuel,” Schürmann said.

To address this, Schürmann argued for fixed-term contracts, which lock in prices over an agreed period, reducing exposure to spot market fluctuations and easing logistical challenges related to adjusting barge or cargo deliveries.

Another challenge is uncertainty about availability of biofuels, particularly outside major bunkering hubs like ARA and Singapore. Suppliers in more and more ports have launched biofuel bunker operations, but there is a perception among shipowners that availability is still lacking and that opting for biofuels to comply with regulations like FuelEU Maritime in the EU can reduce their flexibility if they call at ports without availability.

Term contracts can help mitigate these risks by sending firm demand signals to suppliers, who can then plan future investments and establish logistics to meet increased bunker demand, according to Schürmann.

The sulphur factor for biofuels

Different grades of biofuels can be used in the road, shipping or power generation industries. However, quality differences among these grades can significantly impact pricing in the shipping sector, Schürmann emphasised. This variability can make it difficult for buyers to predict costs accurately, which in turn can influence their decision to sign term contracts.

Some biofuels can be used interchangeably as road or bunker fuels. Others have higher sulphur content, which makes them unsuitable for road while still acceptable for shipping.

For instance, a product with 20 ppm sulphur content cannot be used by vehicles because it exceeds the road standard cap of 10 ppm. But it can be used in shipping since it is below the International Maritime Organisation’s (IMO) 0.10% – or 1,000 ppm – cap. This product may be sold at a discount because it is limited to bunkering, he explained.

Biomethanol’s quality and pricing labyrinth

The pricing situation becomes even more challenging for new alternative fuels like low-carbon methanol or ammonia, Schürmann argued.

For instance, he said, green ammonia is not yet widely available, making it difficult to establish prices for it. Methanol, and especially biomethanol, currently lacks a standardised pricing mechanism for shipping. Some companies provide individual quotes, but market prices vary widely across suppliers. This can complicate decision-making for buyers considering these emerging bunker fuels.

Discrepancy in quality and regulations can add another layer of complexity to the pricing structures for fuels like biomethanol.

Biomethanol quality, especially for prototype batches, can differ significantly. Specifications of methanol supplied for shipping are gradually aligning with the International Methanol Producers and Consumers Association (IMPCA) Reference Specifications.

The IMPCA reference specs are a set of standards that define fuel quality of methanol by testing for elements like chloride, sulphur, hydrocarbons, acidity and volatility.

These specifications help ensure consistency within methanol grades. But there remains some uncertainty about the range of methanol grades that engine manufacturers like MAN Energy Solutions and Wärtsilä can accept. Engine manufacturers are still determining which specifications to allow and finalise, which complicates methanol’s pricing and market readiness.

As methanol begins aligning with chemical industry specifications, any quality variations or unmet specifications could create price disparities depending on which industries can utilise the product, he added.

Given this uncertainty, shipping companies might feel it is more prudent to adopt a wait-and-see approach, preferring to engage in spot or very short-term deals like quarterly agreements, rather than committing to multiple-year contracts.

Addressing the biomethanol demand drought

FincoEnergies started offering truck-to-ship biomethanol deliveries in the Port of Amsterdam last year. But demand remains low.

“We have had biomethanol in stock for over a year; we have a truck ready to deliver, and we have the parts ready to deliver, but we see that demand for biomethanol is very, very low,” Schürmann said.

The company is still betting on this fossil fuel alternative because it expects demand to pick up in the near-term.

“Whilst current demand is developing, the company maintains its commitment to biomethanol, supported by industry movements such as Maersk’s recent long-term methanol sourcing agreement,” he said.

There are now 43 methanol-capable vessels in operation globally and another 342 vessels are on order for deliveries towards 2033, according to classification society DNV’s database.

“So yeah, we need to invest in that [fuel],” Schürmann said.

To offset financial risks, he thinks that fuel suppliers should strike the right balance between spot deliveries and term contracts.

“There will be shipping companies that close contracts; you only need to find the right ones, and you need to set up a partnership approach.”

By Konica Bhatt

Photo credit: FincoEnergies
Source: ENGINE
Published: 18 November, 2024

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Alternative Fuels

ENGINE on Fuel Switch Snapshot: LSMGO surges to greater premium over biofuel

B100 discount to LSMGO widens to $541/mt in Rotterdam; Singapore’s B100 drops to $106/mt below LSMGO; Rotterdam LBM at $639-833/mt discounts to LSMGO.

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ENGINE on Fuel Switch Snapshot: LSMGO surges to greater premium over biofuel

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:

20 July 2026

B100 discount to LSMGO widens to $541/mt in Rotterdam
Singapore’s B100 drops to $106/mt below LSMGO
Rotterdam LBM at $639-833/mt discounts to LSMGO

B100’s premium over HSFO in Rotterdam has narrowed by $50/mt over the past week to $64/mt, while its discount to VLSFO has widened by $83/mt to $105/mt.

B100 has become far more competitive against LSMGO in Rotterdam, with its discount widening by $180/mt over the past week to $541/mt, as a surge in conventional fuel prices left B100 broadly unchanged by comparison.

B100’s price has risen by $109/mt in Singapore, but its discount to LSMGO has still widened by $102/mt to $106/mt, as LSMGO surged by an even greater $211/mt.

Rotterdam’s LNG premium over VLSFO has widened by $35/mt to $201/mt for vessels with Otto medium speed (Otto MS) engines. For vessels with diesel slow speed (diesel SS) engines, LNG has flipped to a $15/mt premium over VLSFO, from a $22/mt discount the prior week.

Liquefied biomethane (LBM) discounts to VLSFO in Rotterdam have narrowed by $50-52/mt to $203-396/mt over the past week. Against LSMGO, LBM discounts have widened by $45-47/mt to $639-833/mt, depending on engine type.

In Singapore, LNG is now $42/mt cheaper than LSMGO for vessels with Otto MS engines, and $134/mt cheaper for vessels with diesel SS engines.

ENGINE on Fuel Switch Snapshot: LSMGO surges to greater premium over biofuel

Liquid fuels

HSFO and VLSFO prices in Rotterdam have jumped by $66/mt and $99/mt respectively over the past week, while LSMGO has surged by an even steeper $196/mt. A $9.69/bbl ($71/mt) rise in front-month ICE Brent futures, to $87.94/bbl ($645/mt), drove bunker prices sharply higher across the board.

Bunker fuel availability is tight for prompt delivery dates in the ARA ports, with buyers advised to enquire about stems between 5-7 days ahead to get good coverage, a trader said.

Rotterdam’s B100 price has risen by $16/mt over the past week. Dutch ZRE A ticket prices were unchanged at €107.50/mtCO2e.

Singapore’s HSFO and VLSFO prices have risen by $130/mt and $132/mt respectively, while its LSMGO price has gained an even steeper $211/mt over the past week.

VLSFO availability in Singapore has been tight, with several suppliers reporting low stock levels. Recommended lead times have widened from 13–17 days last week to 14–19 days now.

Liquid gases

Rotterdam’s LNG prices have surged by $134-136/mt over the past week, while its LBM prices have climbed by $149-151/mt.

LBM discounts to LNG in Rotterdam have narrowed by $15/mt to $404-411/mt.

Singapore’s LNG bunker benchmarks have surged by $196-197/mt over the past week.

By Erik Hoffmann

Photo credit and source: ENGINE
Published: 21 July, 2026

Alternative Fuels

Repsol and Maersk wrap up first bioethanol bunkering operation in Port of Barcelona

Repsol supplied 2,800 mt of bioethanol to a Maersk container vessel, “Antonia Maersk”, in the first bunkering operation of its kind in the Port of Barcelona and one of the first in the Mediterranean.

Published

1 day ago

July 20, 2026

Admin

Repsol and Maersk wrap up first bioethanol bunkering operation in Port of Barcelona

Spanish energy company Repsol and shipping giant A.P. Moller – Maersk (Maersk) completed the first bioethanol bunkering operation in the Port of Barcelona, according to the port authority on Wednesday (15 July).

Repsol successfully supplied 2,800 metric tonnes (mt) of bioethanol to a Maersk container vessel, Antonia Maersk, in the first bunkering operation of its kind in the Port of Barcelona and one of the first in the Mediterranean.

The operation demonstrates growing demand for alcohol-based marine fuels, as well as the readiness of the infrastructure, logistics, and operational capabilities required to support their deployment at commercial scale.

Juan Abascal, Repsol’s Executive Managing Director of Industrial Transformation and Circular Economy, said: “With this supply, we reaffirm our commitment to the decarbonization of maritime transport through solutions that are available today and ready to scale in the future.

“At Repsol, we provide shipping companies with a reliable supply chain and a multi-energy strategy that combines different renewable fuels to support the sector in a safe, competitive, and sustainable transition.”

The supply took place in the Port of Barcelona under fully commercial conditions, bringing together key players across the maritime value chain and demonstrating how collaboration can accelerate the adoption of lower-emission solutions in shipping.

The delivery was carried out by Bahía Candela, Repsol’s newest bunker vessel, operated by Mureloil and designed to supply both conventional marine fuels and next-generation energy products.

During the bunkering operation, Bahía Candela operated using its battery system, enabling the fuel transfer to be completed with zero local emissions, and further reducing the environmental footprint of the operation.

Prior to the bunkering, Maersk tested ethanol on one of its smaller vessels, the 1,800 TEU feeder vessel Laura Maersk, which in 2023 became the world’s first dual-fuel container vessel able to operate on methanol. Today, Maersk has 23 dual-fuel container vessels designed to operate on methanol; however, the company continues to explore ethanol as an alternative fuel for its methanol-enabled vessels. Laura Maersk has performed sailings on 100% ethanol as well as blends of ethanol and methanol.

Emma Mazhari, Vice President Energy Markets at Maersk, said: “Following the successful ethanol trials conducted on Laura Maersk, this latest bunkering of Antonia Maersk marks another important step in our efforts to explore scalable low-emission fuel solutions.

“As the first ethanol trial on one of our large dual-fuel vessels, with a capacity of 16,000 TEU, it allows us to deepen our understanding of ethanol’s operational potential at scale.

“Building on the experience we have gained with methanol, we are working closely with port authorities and industry partners to develop the infrastructure and procedures needed to support ethanol bunkering. Ethanol is one of several pathways we are pursuing to diversify our future fuel portfolio and help accelerate the development of new, viable liquid marine fuel markets.”

Photo credit: Port of Barcelona
Published: 20 July, 2026

Biofuel

DP World, Svitzer switch harbour tug to HVO100 biofuel at London Gateway

“Svitzer Thames” switching from marine diesel to HVO can reduce CO₂ emissions by up to 700 mt annually, while also improving local air quality.

Published

1 day ago

July 20, 2026

Admin

DP World, Svitzer switch harbour tug to 100% HVO at London Gateway

Global logistics group DP World recently said the company bunkered the first harbour tug to use 100% Hydrotreated Vegetable Oil (HVO) fuel at London Gateway, in collaboration with Svitzer.

Svitzer Thames handles some of the world’s largest container ships at the port, and switching from marine diesel to HVO can reduce CO₂ emissions by up to 700 metric tonnes (mt) annually, while also improving local air quality.

“DP World and Svitzer are working together to use biofuel on tugs to reduce emissions in the UK, enabling cargo owners to actively reduce supply chain emissions at the source,” DP World said in a social media post.

“By transitioning to this lower lifecycle emissions solution, we are helping our customers to tackle scope 3 emissions and meet their sustainability goals along the supply chain.”

DP World partnered with marine services company Svitzer, under a partnership that will see its tug boats serving DP World’s ports transition to these fuels.

Manifold Times previously reported DP World supporting the bunkering of tugboat Svitzer Bargate using 100% Hydrotreated Vegetable Oil (HVO) in place of conventional diesel.

The operation was conducted at the Port of Southampton in the UK.

The company added that the emissions savings from this activity form part of the last nautical mile carbon inset credits under its Carbon Inset Programme, enabling cargo owners to actively reduce supply chain emissions at the source.

Photo credit: DP World
Published: 20 July, 2026