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Marine biofuel specialist FincoEnergies has been in the ARA market for several years and established itself as perhaps the world’s biggest supplier of biofuel blends to ships.

Countless shipping firms have grabbed news headlines through trialling GoodFuels’ biofuels supplied by FincoEnergies to their ships. Various feedstocks have been tried and tested, with differences in performances and greenhouse gas (GHG) reduction potentials recorded.

ENGINE spoke to FincoEnergies commercial director Johannes Schurmann to explore some of the more pressing questions and challenges around biofuels for bunkering. Have there been a lot of teething issues so far, where are we now, and what will a more GHG-regulated marine fuel future look like?

The answers below are highlights from the conversation. Click here to download the full interview or email Johannes Schurmann or Erik Hoffmann.

Erik Hoffmann (EH): We are seeing a wide range of price levels from various biofuel bunker suppliers in the Netherlands. These are given either for fuels based on feedstocks such as cashew nut shell liquid (CNSL), palm oil mill effluent (POME) or used cooking oil (UCO), which have different properties. Are there major differences in the performances of these fuels?

Johannes Schurmann (JS): If you look at POME and UCO, those are indeed different feedstocks that can have different properties. But it’s not a given that they have different properties. POME is of course a waste product from the palm oil industry, but UCO could also be a waste product from palm oil.

We have quite some clients that want solely used cooking oil methyl ester (UCOME), which is biodiesel made from UCO, because they believe they have engine acceptance for UCOME. But in the end, it’s impossible to prove that physical UCO ended up in the biodiesel. Only if you control the entire supply chain you could say ok, the physical UCO ended up in the biodiesel.

It’s very hard to base the quality of the biodiesel on the original feedstock if we are working with waste-based products.

CNSL is a totally different ball game. It’s a fuel that we don’t have much data about. We know that it has been used for some years in fuel oil blends. Some shipping companies are testing it, but there are also some nasty stories about all kinds of problems that occur with this product.

If you look at the composition of CNSL, it’s composed of mainly carbonyls and anacardic acids, and those are different from the fatty acids that we are well known in biodiesels.

It could be an interesting product for the future because there are quite some volumes available. It’s much cheaper than the biodiesels that we see today, but from a technical side, there are still quite some challenges that we need to overcome. So to just start using it because it fits in the ISO 8217 specification, that is too easily said.

EH: POME should not be confused with virgin palm oil, but how can a shipowner know that a POME-based biofuel is actually POME and not something else?

JS: We have been looking at POME for a while. In the Netherlands we have worked with this Dutch HBE [hernieuwbare brandstofeenheden] system, that does allow certain feedstocks to be used for international shipping if they are eligible for those HBEs, those bio tickets. And 2-3 years ago, they narrowed down the feedstock list which pushed us towards POME.

We didn’t use it before because we were scared of this “palm” word in the feedstock, and if you can use UCO or tallow, why look at POME? Due to the legislation we had to look at POME.

What we did was first looking at where is this POME coming from? It’s mainly coming from Southeast Asia – Malaysia for example, Indonesia as well. To prove that the POME is really a waste product, we need to rely fully on the ISCC [International Sustainability & Carbon Certification]. The ISCC is certifying basically all the parties in the chain, including the ones producing POME.

And when the auditors visit sites that are producing POME, they are checking whether those sites are actually increasing or decreasing the amount of POME that they produce on a yearly basis. They say you cannot produce more than you did in previous years. Those auditors are really looking to make sure that you are not purposely producing POME. We think that this is a good mechanism.

A better way to check that they’re not purposely producing POME is to see whether they even have a financial incentive to produce POME. And what we have done over the past years is that we have checked the POME price, so the raw feedstock, compared to palm oil.

What you see is that most of the time, not always but most of the time, the price of palm oil is higher than the price of POME. If the price of palm oil is higher than the price of POME, then for the producers of POME, there is no incentive to optimise the waste products rather than their premium product, which is palm oil.

EH: You have been looking into various ways of tracking feedstocks…Are either physical and blockchain tracers being used to guarantee that a biofuel’s origin and supply chain is what it says on the Proof of Sustainability (PoS)?

JS: Setting up a chain where a lot of mass balancing is done on paper, and setting up a chain with a physical tracer in there is extremely hard because you need to put tracers in all the big pools of feedstocks. You need to be able to track them to the vessel with a bunker sample for example, including what the dilution is of each tracer that you put in the original feedstocks.

Then you need to link those together – the tracers you find in the bunker sample and the tracers you’ve put in the original feedstock. In reality, we see that it is insanely hard to organise that. And it is quite costly because you need to physically put tracers in all those feedstocks. Because they’re coming from all over the world, it’s quite costly to organise that. From a physical side, we are not yet convinced that such a system would work.

GoodFuels tested isotopic tracers as a ‘unique fingerprint’ in a biofuel stem delivered to a Norden-owned tanker in 2022. GoodFuels

The only benefit we found during trials, is that onboard the ships you have many different fuel tanks, and to have a tracer in the bunkers that you actually supplied to the ship could be beneficial because then onboard you can prove that if some problems occur, for example with the separator or in the engine, you can prove whether it was your fuel or not that led to a problem.

Regarding the digital tracers, we have been looking into blockchain solutions already for years. But we also see that this ISCC chain is quite solid. In Europe, we will start working with the Union Database soon. It’s a European-wide database for all biofuel streams and everybody participating in the European schemes will need to fill in their mass balance in that system, so that they can basically keep track of all movements of biofuels.

If you at some point adopt such a system globally, that would be very strong, but it’s definitely a good start that we have this unified database in Europe. I would say such a database is stronger than if we had worked independently as companies with blockchain technologies.

EH: Rotterdam’s total bio-blended bunker sales surged from 301,000 mt in 2021 to 791,000 mt in 2022, but then they unexpectedly dipped to 751,000 mt last year. Why was there a declining trend?

JS: It’s based on multiple factors. And what we have seen, and we think has the biggest impact, is that Singapore biofuel bunker sales spiked a lot. There has been some movement away from the Netherlands to Singapore. Of course, what we also see in the Netherlands is that general bunker fuel consumption declined year-over-year from 2022 to 2023. The share of biofuel, or at least the absolute consumption of biofuel, went down in those years. And fossil as well.

We see a tendency that LNG has better economics. I think the LNG business has had quite some tough years in 2022-2023, and in 2021 as well a bit. But we see a lot of new vessels with LNG engines. We see that the LNG business is getting more traction again. So that is definitely an impact.

And maybe the last impact is that in the early years of biofuel adoption, especially in 2022, there were a lot of cargo owners pushing biofuel consumption because they wanted to decarbonise their supply chains in shipping.

Since last year, and especially this year, we have seen some economic headwinds. We see that there is less interest from cargo owners to pay extra for sustainable supply chains. Therefore we are lacking a push from the cargo owner side to bunker more sustainable fuels. We know from a lot of our customers that they are struggling to sell the emission reductions of their consumed biofuels to their cargo owners.

Photo credit: GoodFuels and ENGINE
Published: 18 June 2024