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Methanol Institute and SEA-LNG unite against EU trade barriers to biomethane and biomethanol fuels

Both parties expressed their deep concerns following recent announcement by European Commission impacting the trade of biomethane and biomethane-based biofuels such as biomethanol bunker fuel.

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Methanol Institute and SEA-LNG unite against EU trade barriers to biomethane and biomethanol fuels

The Methanol Institute (MI) and SEA-LNG, key representatives of the methanol and liquefied natural gas (LNG) industries respectively, on Wednesday (17 April) expressed their deep concerns following the recent announcement by the European Commission impacting the trade of biomethane and biomethane-based biofuels such as biomethanol. 

The Commission has noted the intention to exclude the automatic certification of biomethane and biomethanol-based fuels produced through mass balance chain of custody in third-party countries outside the EU gas grids within the Union Database (UDB), an IT system to trace the sustainability and origin of renewable fuels placed into service in the European market. 

“This exclusion will severely limit the use of these critical fuels in decarbonising intra-European and international maritime transport even if these fuels were produced in accordance with EU regulations under the Renewable Energy Directive (RED),” MI and SEA-LNG said in a statement. 

Methanol Institute, as the trade association representing the global interests of the methanol industry, and SEA-LNG, a multi-sector industry coalition promoting the benefits of LNG as a marine fuel, are particularly concerned about the potential impacts of these measures on competitiveness and international trade dynamics. 

“If this materialises, it will create a trade barrier that threatens to impede the importation of biomethane and biomethanol into the European Union, limiting the availability and increasing the costs of these fuels to the bunkering industry in Europe,” they said.

“Furthermore, it may also disqualify such fuels produced using a mass balance chain of custody from non-EU gas grids, when bunkered in non-European ports for use by vessels calling at European ports from being recognised under the Renewable Energy Directive (RED). Consequently, these fuels may not be able to generate credits under EU ETS and FuelEU Maritime.”

In response to these challenges, MI and SEA-LNG call for the recognition of biomethane and biomethanol-based fuels produced using a mass balance chain of custody from non-EU gas grids under the UDB. 

“We propose an urgent meeting between our representatives and those of the European Commission to discuss necessary amendments to ensure a sustainable and competitive energy future for the European maritime sector,” they added.

 

Photo credit: Methanol Institute and SEA-LNG
Published: 18 April 2024

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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.

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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

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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.

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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

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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.

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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

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