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Glander International Bunkering highlights regulations driving up bio bunker fuel uptake

Increased regulations in shipping means biofuel use is heavily incentivised in the short term as use of conventional fuels becomes more constrained by regulatory costs, says firm.

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Global bunker trading firm Glander International Bunkering, which recently received ISCC EU and ISCC Plus certificates for its biofuel operations in Norway and Geneva offices, continued its guide on what to look out for when procuring biofuel bunkers, focusing on volumes as well as regulations in this article:

Biofuels have rapidly emerged as one of the most popular alternative marine energy choices over the past few years as the shipping industry bears down on its greenhouse gas emissions.

The advantages of using biofuels are clear: they work as a drop-in alternative to conventional bunkers, with little or no changes needed to ships’ engines or delivery infrastructure to use them, and result in net reductions in GHG emissions based on their full lifecycle assessment when produced from second or third generation (sustainable) feedstocks.

Biofuels already help buyers today meet their ESG targets and will soon be one of the solutions to meet the mandatory blend-in requirements as set out in the FuelEU Maritime Regulation, starting in 2025.

Bunker buyers can take on these fuels immediately, without significant up-front investment or any long-term commitment to them.

Biofuel volumes

Demand for these fuels has grown rapidly during the past months. Rotterdam saw 791,000 mt of sales for biofuel/marine fuel blends last year, up by 163% from 2021, while Singapore kicked off biofuel sales in 2022 with 140,000 mt of blended product sold in total. The main products in ARA are B30 and in Singapore B24, which means 30% respectively 24% of biofuel blended with conventional marine fuel. The fuels are already available at a wide range in other ports, and volumes can be expected only to climb in the coming years.

These sales initially came in the course of trials from shipping companies looking to try out the fuels in their engines on a one-off basis, but regular sales are now increasingly being seen.

The first thing to note about biofuels in the marine fuel space is that when we talk about them, it’s almost always blends being referred to, typically with up to about 30% biofuel content mixed with VLSFO, HSFO or MGO. Higher ratios of biofuel content, even up to 100%, have been shown to work in conventional engines but are as yet rarely used.

Regulations driving biofuel uptake

There is no doubt that one of the main drivers for the shipping industry’s transition towards carbon neutrality is the increasing and rapidly developing regulatory requirements.

Firstly, IMO has now set a firm target for reaching net-zero greenhouse gas emissions from international shipping approaching the year 2050.The target includes checkpoints for 2030 and 2040 of 20 and 70% respectively absolute reductions (striving for 30% and 80%). In addition, the uptake of zero or near-zero fuels are to represent at least 5% by 2030. Consequently, the shipping industry cannot just wait until 2050, but will be working on reaching these targets already now. The targets of absolute emissions reductions can only be reached by transitioning from traditional to alternative fuels.

Secondly, the CII regulations has now entered into effect. From this year all vessels larger than 5,000 GT will have calculated for them a CII rating based on historical data submitted to the IMO. The rating is a calculation of the CO2 the vessel emitted per unit of cargo capacity per nautical mile.

The rating will come as a letter between A and E, with A at the top of the scale, and ratings will be determined on an annual basis. Ships receiving a D rating for three years or an E rating for a single year will need to implement a corrective action plan as part of the ship energy efficiency management plan (SEEMP) setting out their plans to improve their performance and rating. Alternative fuel such as biofuel will have a significant positive impact on the rating.

Finally, IMO is set to adopt further regulation – such as a price on carbon emissions as well as a green fuel standard – in the coming years to further drive the transition.

But separately from the global effort on decarbonisation led by the IMO, the European Union has also been pursuing its own regulatory agenda.

Last year the EU came to a deal on including shipping within the union’s emissions trading system (ETS). All ships over 5,000 GT in size will be included in the ETS, covering 100% of CO2 emissions from intra-EU voyages and 50% of emissions from voyages between EU ports and the rest of the world. In practice, this means that all vessels calling a European port will be affected by the EU ETS.

The system will be phased in starting in 2024 with 40% of emissions covered, 70% in 2025 and 100% from 2026 onwards. Shipping companies will be required to buy an equivalent number of “EU Allowances” (representing one tonne of CO2 emissions) to match their annual total fleet emissions, and deliver these to the authorities each year.

Europe also has a separate regulation called FuelEU Maritime, which will require shipping firms to gradually incorporate renewable fuels in their bunker purchases in order to lower the GHG intensity of the fuel burned. Like the ETS it is a gradually phased in system with the same coverage in terms of ship size and geographical scope. Meanwhile, the FuelEU Maritime sets requirements not only for CO2, but for other greenhouse gases as well.

These regulatory drivers are just the start; further developments can be expected from the IMO in the coming years, and over the longer term the US and China may also seek to impose their own rules if they are dissatisfied with the global regulations.

All of this will mean biofuel use is heavily incentivised in the short term as the use of conventional fuels becomes more constrained by regulatory costs.

Related: Glander International Bunkering provides guide on buying bio bunker fuels

Photo credit: Glander International Bunkering
Published: 28 August, 2023

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Poland: ORLEN to strengthen position in bunker fuels sector with new oil terminal

With the terminal’s commissioning, the company plans to introduce a bunkering vessel to service the Tri-City ports with conventional marine fuels and biofuels.

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Polish multinational oil refiner ORLEN Group on Wednesday (12 June) said it is solidifying its presence in the marine fuels market with the construction of a new oil terminal that is scheduled for completion by the second half of 2025.

Construction of the Martwa Wisła terminal, located on the Martwa Wisła river, has already exceeded 70%.

The Martwa Wisła terminal will enhance the logistics capabilities of the Gdańsk refinery, allowing for the transshipment of approximately 2 million tonnes of fuel products annually.

The first four loading arms have already arrived at the construction site and the remaining four loading arms are slated for delivery by the end of June. The devices, with a throughput capacity of up to 500m³/h, will be used at transshipment points to load tankers.

With the terminal's commissioning, the company plans to introduce a bunkering vessel to service the Tri-City ports (Gdańsk, Gdynia, Sopot) with conventional fuels and biofuels.

For over 20 years, the Group has been supplying quality marine fuels to all Polish seaports. Its refinery product portfolio encompasses a wide range of fuels that guarantee quality and strict compliance with regulations, including MGO (DMA 0.1%S), ULSFO (RMD80 0.1% S) and LNG, which will in the near future be complemented with ‘green’ alternatives.

All marine fuels offered by ORLEN comply with the international ISO 8217:2017 standard and meet the requirements of the MARPOL Convention.

 

Photo credit: ORLEN Group
Published: 14 June 2024

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Australia: Crew of bunker tanker “Champion 63” to strike following employer’s refusal to negotiate

‘BP has decided they can’t pay industry standards in Brisbane and want to keep their workers’ wages low,’ states MUA spokesman.

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Champion 63

The crew of Champion 63, a 2022-built Australia-registered bunker tanker with home port of Brisbane, is set to go on strike after bargaining for a new enterprise agreement has stalled, stated the Maritime Union of Australia (MUA) on Wednesday (12 June).

Members of the Australian Maritime Officers Union, the Australian Institute of Marine and Power Engineers, and MUA voted up protected industrial action on 11 June 2024.

The crews have been trying to formalise their employment conditions with ASP Ship Management since the bunkering operations commenced in February 2023. It took ASP approximately six months to issue the Notice of Employee Representational Rights (NERR) and start bargaining.

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“The crew of the new bunker barge on the Brisbane River and the maritime unions bent over backwards to make this vessel work,” said MUA Assistant Branch Secretary Paul Gallagher.

“Including low wages, excessive hours and a roster that does not allow crew to take leave. 18 months down the track when it comes time for BP to reward their crew and pay industry standards what do they do? They deny them fair wages, a workable roster and threaten their back pay!”

The AMOU filed a bargaining dispute after ASP refused to take their claim for a roster that does not demand that crews work every weekend seriously.

“Having to work every weekend because ASP does not have suitable relief arrangements is unacceptable,” said AMOU Industrial Officer Tracey Ellis.

“Crews have a right to be rostered time off to spend with their family. Waiting for ASP to fix the issue did not work, filing a Bargaining Dispute in the Fair Work Commission did not work, so the crews will take protected industrial action until their concerns are taken seriously.”

The crews onboard the Champion 63 voted up an unlimited number of stoppages of work of between one hour and 48 hours.

Gallagher added that, “the Maritime unions will not tolerate the big multinational fuel barons of this world undermining the Australian maritime wages and conditions of seven local mariners who are trying their best to support our own local shipping and Cruise Ship industry. If your cruise holiday gets delayed it is because, after recording over $40 billion profit in last two years, BP has decided they can’t pay industry standards in Brisbane and want to keep their workers’ wages low.”

 

Photo credit: Maritime Union of Australia
Published: 13 June 2024

 

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Infineum releases Sustainability Report 2023 outlining its sustainability progress

Infineum celebrates 25 years of operations and looks forward to the next 25 years of progress towards its net zero ambition by 2050, says CEO.

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Press release Infineum remains focused on our purpose to become a sustainable world class specialty chemicals company

Infineum, a specialty chemicals company headquartered in the UK, on Thursday (13 June) released its fourth annual Sustainability Report, reinforcing its purpose to create a sustainable future through innovative chemistry.

Aligned with the company’s strategic plan to achieve its vision and purpose, Infineum announces:

Publication of its Sustainability Report 2023 (Sustainability.Infineum.com), which outlines the efforts and progress that the company has achieved through the year, including:

  • Championing of Diversity, Equity & Inclusion (DE&I) throughout the organisation
  • Achievement of 28% of colleagues volunteering, surpassing its 2025 target of 25%
  • Increased share of relevant supplier spends covered by sustainability assessments to 62%

Launch of revamped corporate website (www.Infineum.com) to better represent Infineum as a specialty chemicals company, showcasing Infineum’s existing capabilities, as well as diversification in the new markets

The joint venture, formed in 1999 between Shell and Exxon Mobil, celebrates its 25th anniversary this year and recently shared its restructure strategy to two business units, Sustainable Transportation and Energy Applications.

“As Infineum celebrates 25 years of operations and we look forward to the next 25 years of progress towards our net zero ambition by 2050, I am pleased to share our fourth annual sustainability report,” says Infineum CEO Aldo Govi.

“This is a journey and we have made excellent progress, but improvement will not always be linear, especially when set against the backdrop of a challenging external environment, but our purpose of creating a sustainable future through innovative chemistry, continues to drive us forward.

“We remain focused on our vision to become a sustainable world-class specialty chemicals company. Sustainability was at the core of reshaping Infineum to better enable us to contribute to sustainable mobility and the transition to a low-carbon economy.”

 

Photo credit: Infineum
Published: 13 June 2024

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