Bunker Fuel

VPS shares review and position on new ISO 8217:2024 marine fuel specs

VPS believes new revised standard ISO8217:2024 is a major step forward from the previous 2017 6th revision and will provide global shipping and bunker industry with greater support than its predecessor.

Published

2 months ago

July 5, 2024

Admin

Steve Bee, Group Commercial Director of marine fuels testing company VPS, on Thursday (4 July) highlighted on the latest ISO 8217:2024 revisions and their impact on maritime emissions compliance:

Ever-increasing environmental legislation in relation to reducing emissions from the global maritime fleet, has driven the development of numerous new fuels, since the last revision of the international marine fuel standard, ISO 8217:2017.

We have seen in recent years the introduction of Very Low Sulphur Fuel Oils (VLSFOs) to support meeting the IMO2020 change in reducing the global cap for sulphur levels within marine fuels to 0.50%. This has been followed by a transition to include synthetic, renewable and recycled content within marine fuels, in the form of biofuels. These will support the reduction of carbon dioxide emissions to help comply with the IMO 2030/2050 targets and numerous other legislative requirements such as, Monitoring, Recording & Verification (MRV), CII & EEXI, EU Emissions Trading Scheme and FuelEU Maritime.

As the world’s leading marine fuel testing company, VPS has over the years witnessed a slow uptake of new revisions of the ISO 8217 standard, due to a combination of price and initial availability.

According to our most recent data, 12.6% of fuel samples that are received for testing were purchased in accordance with the 2005 standard, 47.7% with the 2010 revision, 19.3% with the 2012 version, and just 20.4% with the most recent revision published in 2017.

VPS shares review and position on new ISO 8217:2024 marine fuel specs

Testing to a standard specification which is almost 20 years old and superseded by four revisions, the 2005 revision offers little in the way of vessel and environmental protection with respect to modern fuels, yet over 12% of fuels are still purchased against this revision. The cat-fine limit of 80ppm, has elevated risk of vessel damages than the 60ppm limit introduced as far back as 2010. Sulphur limits are widely outdated with the requirements of the IMO2020, 0.50% limit, stating sulphur limits of 3.50%, 4.00% and 4.50%, for the various residual grades, offering little in regard to today’s SOx regulations. In addition, Clause 5 of ISO 8217:2005, offers no consideration of today’s more complex fuel mix and the presence of FAME, HVO, GTL, or BTL in today’s fuel supply chain.

Today, the most popular revision of the standard is still ISO 8217:2010, accounting for almost 50% of all fuel samples received for testing. This 14-year old fuel standard, pre-empted the future changes in sulphur limit regulations, by removing sulphur limits from Table 2. However, this old standard revision did not account for the statutory requirements of IMO2020 and the introduction ten years later, of the 0.50% sulphur VLSFO fuels which came to the market to address the legislative reduction in SOx emissions from global shipping. There is no specification within this revision for VLSFOs, currently the most popular marine fuel type purchased today.

In addition, for VLSFOs there has been a reduction in the spread of viscosity range from 2021 to 2024. In 2021 the majority (37%) of the VLSFO’s supplied in the marine industry had a viscosity in the range of 80 to 100 cSt. This has changed over the years showing an increasing trend in the viscosity, so that in 2024 we see an increase to 43% of the VLSFO’s supplied in the marine industry with viscosity in the range of 80 to 100 cSt.

However, all samples are tested to a 380Cst specification, with only a maximum viscosity specification and no minimum viscosity limit, which would have been extremely helpful especially to the operators to plan ahead. Yet, a positive introduction was the Cat-fine limit reduction to 60ppm.

For distillate grades, ISO 8217:2010 introduced a new grade, DMZ, with minimum viscosity 3.000 mm2/s at 40°C. Specification limits were added for hydrogen sulphide, acid number, oxidation stability and lubricity. In addition, the minimum viscosity requirement for DMA was raised to 2.000 mm2/s and a minimum viscosity requirement of 2.000 mm2/s added for DMB.

Some changes were also made to the residual grades.

Yet Clause 5 within ISO8217:2010, has the following statement:

5.4 The fuel shall be free from bio-derived materials other than 'de minimis' levels of FAME (FAME shall be in accordance with the requirements of EN 14214 or ASTM D6751). In the context of this International Standard, “de minimis” means an amount that does not render the fuel unacceptable for use in marine applications. The blending of FAME shall not be allowed.

The ISO 8217:2017 revision currently accounts for only 20% of fuels purchased, which is astonishingly low, considering that up to May 2024, it was the most recent revision? This revision did move nearer than its predecessors towards accounting for the presence of renewable feedstocks and FAME.

This sixth revision had changes in the general requirements to allow hydrocarbons from co-processing of renewable feedstock with petroleum feedstock and hydrocarbons from synthetic or renewable sources. Additional marine distillate grades, DFA, DFZ and DFB were added with a maximum fatty acid methyl ester(s) (FAME) content of 7.0 volume %

Requirements to report cloud point and cold filter plugging point were added to winter grades of DMA and DMZ, whilst the sulphur content of DMA and DMZ was reduced to a maximum of 1.00 mass % and the sulphur content of DMB reduced to a maximum of 1.50 mass %. Along with these changes, the “de minimis” FAME level was increased to approximately 0.5%.

Finally, Clause 5 contained the following statement:

5.1 The fuel composition shall consist predominantly of hydrocarbons primarily derived from petroleum sources while it may also contain hydrocarbons from the following:

- synthetic or renewable sources such as Hydrotreated Vegetable Oil (HVO), Gas to Liquid (GTL) or Biomass to Liquid (BTL);

- co-processing of renewable feedstock at refineries with petroleum feedstock.

Therefore, whilst upon release, each revision of ISO8217 has introduced many improvements relating to marine fuel quality at the time of release, the drive to reduce emissions from global shipping has seen many changes in fuels, introduced at a faster rate than the updates within ISO8217. As a consequence, buying fuels to older revisions, will only elevate the levels of risk to a vessel, crew health & safety and the environment. So, in May 2024, 80% of marine fuels are still being purchased to ISO82217 revisions which are between 12-19 years old, bearing little resemblance to the fuels available in today’s marine fuel market.

The introduction of the latest and 7th revision of the standard, ISO 8217:2024, released on 30th May 2024, has now addressed a number of the requirements associated with these newer fuels, to support the industry on its decarbonisation journey.

In addition to ISO 8217:2024, ISO 8216:2024, released prior to the release of ISO 8217:2024, identifies the various fuel grades introduced within the new standard and explaining the designated fuel codes.

VPS Review of ISO8217:2024

VPS believes the new revised standard ISO 8217:2024, is a major step forward from the previous 2017 6th revision and will provide global shipping and the bunker industry with greater support than its predecessor. Further to this, VPS would like to provide additional fuel quality and fuel management considerations:

Table 1 and Table 3 emphasises on distillates and biofuels with residual and distillate blends including FAME, HVO, GTL and BTL. VPS have tested several biofuels over the recent years with different bio-components, such as Cashew Nut shell Liquid (CNSL) and Tyre Pyrolysis Oil (TPO), Bio FAME residues, Algae oil all of which exhibit different behaviours and fuel management challenges, to those vessels choosing to use such fuel blends. Some of the key parameters that are required to identify the quality of such fuels are not considered in this revision of the standard.

Note: The full article by VPS’ Steve Bee and tables mentioned can be found here.

Photo credit: VPS
Published: 5 July, 2024

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Financial Result

CBL International gross profit down 32.2% on year for 1H 2024

Decline primarily driven by reduction in premium sold to customers; leading to lower gross profit per tonne even though there was an increase in volume sold, says CBL.

Published

2 hours ago

September 13, 2024

Admin

CBL International Limited (CBL), the listing vehicle of Banle Group (Banle), a marine fuel logistic company in the Asia-Pacific region, on Thursday (12 September) announced its unaudited financial results for the six months ended 30 June.

CBL said its gross profit for the period was approximately USD 2.72 million, a decrease of 32.2% compared to USD 4.01 million for 1H 2023.

The firm said the decline was primarily driven by the reduction in premium sold to customers and led to lower gross profit per tonne, which was partially offset by an increase in volume sold.

CBL also reported its Consolidated revenue for 1H 2024 increased by 44.4% to approximately USD 277.23 million, compared to USD 191.96 million in the same period in 2023.

“This significant growth was driven by a 39.4% year-over-year increase in sales volume, attributed to the expansion of the Company's global supply network and higher marine fuel demand due to geopolitical factors,” it said.

The company announced the pricing of its initial public offering on Nasdaq Capital Market on 22 March last year.

“We are pleased with the robust growth in our revenue and sales volume during the first half of 2024, despite the challenging market conditions. Our strategic initiatives, including the expansion of our service network and our focus on sustainable fuel solutions, have positioned us well to navigate these challenges and capitalise on emerging opportunities,” said Teck Lim Chia, Chairman & CEO of Banle Group.

“While the current market environment has pressured our margins, we remain confident in our long-term strategy and our ability to deliver value to our shareholders.”

Other Financial Highlights:

Operating Expenses: Operating expenses rose by 64.0% to approximately USD 4.12 million, up from USD 2.51 million in 1H 2023. This increase was attributed to higher selling and distribution expenses related to our sales growth, strategic expansion in the Company's supply network to new geographic areas, and the development of our biofuel operations.
Net Income: The company reported a net loss of approximately USD 1.62 million, compared to a net income of USD 1.15 million in 1H 2023. The loss was driven by lower gross margin and higher operating costs.
Cash Flow: Net cash provided by operating activities was approximately USD 2.30 million, a significant improvement from a cash outflow of USD 7.24 million in 1H 2023, reflecting better management of working capital.
Cash position: As of June 30, 2024, Banle's consolidated cash balance increased by approximately USD 2.29 million, or 30.9%, to USD 9.69 million, compared to USD 7.40 million as of December 31, 2023. This increase was primarily driven by improved working capital management. The Company also reported a significant increase in accounts receivable and accounts payable balances, reflecting the growth in its sales activities.

Operational Highlights:

Global Network Expansion: As of June 30, 2024, Banle expanded its global service network from 36 ports at our IPO in March 2023 to over 60 ports across Asia, Europe and Africa. This strategic expansion has enabled the Company to secure new bunkering business opportunities, particularly in European markets where environmental regulations are increasingly stringent. The opening of the Company's new office in Ireland in late 2023 has bolstered our market coverage and enhanced local sourcing capabilities. Notably, the Company completed inaugural bunkering services through a local physical supplier in Mauritius in May 2024, further strengthening our market presence.
Biofuel Initiatives: Banle continued its commitment to sustainability by expanding its B24 biofuel operations, obtaining ISCC EU and ISCC Plus certifications in 2023. The Company successfully commenced biofuel bunkering services through local physical suppliers in Hong Kong, China, and Malaysia, positioning itself as a pioneer in sustainable fuel solutions. The B24 biofuel blend, which includes 24% UCOME (used cooking oil methyl ester), offers a 20% reduction in greenhouse gas emissions compared to conventional marine fuels, aligning with global decarbonisation efforts.
Response to Macroeconomic Environment: The global economy has shown signs of moderate growth in 2024, with emerging markets, particularly in Asia, driving this recovery. However, the shipping industry continues to face challenges such as fluctuating freight rates, port congestion, and disruptions in major trade routes due to the ongoing Red Sea Crisis. Banle has proactively adapted to these conditions, coordinating increased fuel supplies in Asian ports to meet heightened demand, ensuring that our customers' needs are met despite logistical challenges.

Looking ahead, Banle said it remains focused on expanding its market presence, particularly in the biofuel sector, and continuing to enhance its global supply network.

Photo credit: Essow on Pexels
Published: 13 September, 2024

Alternative Fuels

KPI OceanConnect expands Asia footprint with new Tokyo office

New office will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative bunker fuels to tightening environmental regulations.

Published

3 hours ago

September 13, 2024

Admin

KPI OceanConnect expands Asia footprint with new office in Japan

Marine energy solutions provider KPI OceanConnect on Thursday (12 September) announced the opening of its new office in Tokyo, Japan, to strengthen its regional presence and support to local customers.

The office is KPI OceanConnect’s fifth in Asia, reflecting an increasing commitment to strategic growth in the region.

Japan is a leading innovator in the maritime industry, operating the third largest merchant fleet and is an important market for KPI OceanConnect.

The new office, led by Ken Kobayashi, Head of Japan, will help existing and new clients navigate increasing operational complexity in the marine energy sector, from new alternative fuels to tightening environmental regulations.

The announcement follows KPI OceanConnect’s recent publication of robust financial results for the year 2023/2024 and demonstrates its continued commitment to investing in building strong partnerships across the marine fuels value chain worldwide.

The expansion of the local team in Japan will enable KPI OceanConnect to actively engage with Japanese buyers and suppliers on a daily basis to exchange knowledge and expertise to support the development of innovative energy transition strategies for its clients.

The launch of the new office was celebrated with an opening reception on 10 September. The event was attended by the group’s owner, Nina Østergaard Borris and the Executive Management team of KPI OceanConnect, including Anders Grønborg, CEO, Dorthe Bendtsen, COO, and Jesper Sørensen, Global Head of Alternative Fuels and Carbon Markets.

To celebrate this milestone, KPI OceanConnect hosted an opening reception at the XEX Tokyo restaurant, just steps away from its new office in the Burex building. The event also featured music by DJ Yumi.

Anders Grønborg, CEO of KPI OceanConnect, said: “KPI OceanConnect has worked closely with clients in Japan for a very long time. As a key market for our sector and our business, this new office allows us to be closer to our customers and other important local stakeholders.”

“It is a time of transformation in the maritime value chain, and we are ready to work with our partners to identify opportunities for further collaboration and innovative solutions. We believe that our values of decency, good governance, transparency and long-term sustainability resonate well in this market.”

Ken Kobayashi, Head of Japan, KPI OceanConnect, said: “KPI OceanConnect is here to support its clients in turning today’s challenges and future uncertainties into opportunities for growth and innovation. From new fuels to new regulations, our network of experts is focused on delivering tailored, value-adding services to clients to future-proof their decision making, no matter the complexity.

“With a partnership-driven approach, we’re enabling greater transparency and innovation and are helping rewrite the bunkering playbook to support clients through the energy transition.”

Photo credit: KPI OceanConnect
Published: 13 September, 2024

Alternative Fuels

European shipowners and bunker fuel producers launch Clean Maritime Fuels Platform

Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association, HydrogenEurope and Methanol Institute.

Published

3 hours ago

September 13, 2024

Admin

European shipowners and bunker fuel producers launch Clean Maritime Fuels Platform

The European Community Shipowners’ Associations (ECSA) on Thursday (12 September) announced the launch of the Clean Maritime Fuels Platform.

The new Clean Maritime Fuels Platform is a bottom-up industry initiative aiming to enhance communication between the shipping sector and fuel producers and to identify common challenges and possible solutions, considering the implementation of the Fit for 55 package and the transition to a net-zero economy by 2050.

Members of the initiative include ECSA, FuelsEurope, eFuel Alliance, European Waste-based & Advanced Biofuels Association (EWABA), HydrogenEurope and Methanol Institute.

According to ESCA, access to clean maritime fuels is a top priority for the decarbonisation of the shipping sector.

The recently published Draghi report on the Future of European Competitiveness identifies shipping as one of the most difficult sectors to decarbonise, requiring around 40 billion in annual investments between 2031 and 2050.

The report highlighted that, while the EU is a world leader in sustainable renewable and low-carbon fuels for the decarbonisation of transport, it has limited installed capacity and planned production. The EU needs to start building a supply chain for clean fuels, or the costs of meeting its targets will be significant.

Representatives of ECSA, FuelsEurope, eFuel Alliance, EWABA, HydrogenEurope and Methanol Institute held their first meeting on 12 September and agreed on the objectives and the working principles of the new platform. Members also started to discuss the key topic of infrastructure gaps.

The platform will focus on policies and tools to support the production and uptake of clean maritime fuels in Europe including areas such as maritime in EU ETS and funding opportunities.

The platform will hold regular meetings with ECSA taking care of the secretariat’s tasks.

“Today, the shipping and energy industry join forces and launch a dialogue platform that can facilitate better flow of information about the common challenges we are facing. We need all hands on deck to make the energy transition happen. In order to meet our targets, we need clean fuels available in the market in sufficient quantities and at an affordable price. European shipowners are proud to launch with the fuel producers the Clean Maritime Fuels Platform”, said Sotiris Raptis, ECSA Secretary General.

“We are very excited to launch the Clean Maritime Fuels Platform today. Our 55+ members from across the EU are working tirelessly to produce waste-based and advanced biodiesel of the highest quality requirements and GHG savings to bring a new era of clean shipping to Europe. We believe that a closer collaboration between renewable fuel suppliers and ship owners will significantly reduce technical, operational, and financial barriers across the supply chain for the development and uptake of renewable maritime fuels”, said Angel Alvarez Alberdi, Secretary General of EWABA.

“The energy transition is a gradual journey, not an overnight change. It demands a robust regulatory framework and collaboration among all stakeholders involved to drive effective decarbonization. As we work alongside our 100 members through the complexities of this transition, the Clean Fuels Maritime Platform will play a crucial role in accelerating our shift to cleaner fuels and innovative technologies. By combining our collective expertise and efforts, we are not only tackling the pressing need for emission reductions but also laying the groundwork for a more resilient and sustainable maritime industry”, said Greg Dolan, CEO of Methanol Institute.

Photo credit: European Community Shipowners’ Associations
Published: 13 September, 2024