China’s growing role in the marine fuels market is reshaping the competitive dynamics between Chinese bunkering hubs and established centres such as Singapore.

 In this interview with Manifold Times, Dr Kang Wu, Energy Economist specialising in China and Southeast Asia at Global Energy Research and Educational Training Pte. Ltd., discusses the impact of China’s bonded bunker fuel tax rebate, domestic refining and import trends, the adoption of LNG and methanol, and pricing differentials with Singapore, while also examining China’s surplus of UCOME:

MT: How has China’s 2020 VAT rebate policy for bonded bunker fuel, especially for low-sulphur fuel oil, affected the competitiveness of Chinese ports like Zhoushan in comparison to traditional hubs like Singapore?

The impact has been significant, mainly because the rebate extends beyond the VAT. Effective February 2020, the Chinese government introduced a rebate policy for the 13% VAT on China’s fuel oil exports (including bunker fuels) to bonded areas. More importantly, the rebate also covers the fuel oil consumption tax, which amounts to 1,218 yuan per metric tonne (mt), or roughly $27/bbl. This policy has fundamentally transformed the economics of China’s fuel oil exports to bonded areas. However, as discussed below, China still needs to import large volumes of bunker fuel because domestic supply remains insufficient to meet demand. 

MT: With China’s independent refiners (teapots) now producing more compliant low-sulphur fuel oil, what share of China’s bonded bunker demand is now met domestically vs. imported from places like  Malaysia or Russia?

Although independent (“teapot”) refiners cannot export bunker fuels directly as they do not have export quotas, their increased production helps quota-holding national oil companies (NOCs) as well as Zhejiang Petroleum & Chemical Co., Ltd. expand their exports. However, it is worth noting that China’s overall fuel oil production has been declining in recent years because refiners increasingly use deep conversion processes to maximise the production of lighter products and petrochemical feedstocks. In 2025, China exported a record 376,000 b/d of fuel oil, the vast majority of which was shipped to bonded areas. At the same time, China imported 396,000 b/d of fuel oil, primarily from Russia, Malaysia and Singapore, down from the record 514,000 b/d imported in 2024. These imports and exports together form the foundation of China’s bonded-area fuel oil market.

MT: Given China’s push for LNG bunkering and its IMO 2030/2050 decarbonisation targets, how quickly are Chinese ports and shipowners adopting LNG or methanol bunker infrastructure compared to conventional VLSFO?

Indeed, China has made a major push to promote LNG and green methanol as marine bunker fuels, and progress has been steady. However, given the relatively low starting base, their rising impact on VLSFO consumption is expected to be gradual.

MT: How do fluctuations in China’s industrial production and coal imports (via dry bulk carriers) directly correlate with bonded bunker fuel demand at major Chinese ports?

Bonded bunker fuel demand at major Chinese ports is indeed influenced by China’s overall import and export activities. Although China’s coal imports have declined since reaching a record high of 543 million mt in 2024, the country’s total merchandise trade volume has continued to grow year by year. At the same time, China’s GDP growth has slowed compared with a decade ago. In addition, structural changes in trade patterns and shipping routes (such as a decline of exports to the US and a surge of exports to other countries) have also affected bunker fuel demand. A more detailed analysis is needed to determine the precise relationship between trade activity and bonded bunker fuel demand.

MT: What is the typical price spread between Chinese bonded bunker fuel and Singapore’s delivered bunker prices, and how do factors like China’s export quotas or refinery maintenance create arbitrage opportunities?

Following the introduction of the tax rebate policy discussed above, Chinese ports have gained a pricing advantage in the bunker fuel market, as more competitively priced bunker fuel produced domestically has become available. As a result, China’s delivered bunker fuel prices have typically traded at a discount of $15–30/mt to those in Singapore. However, prices fluctuate, and China’s bonded bunker fuel prices are not always lower than Singapore’s for three main reasons. First, China still needs to import large volumes of fuel oil, including VLSFO, into its bonded areas. Consequently, prices in these markets remain closely linked to Singapore’s delivered bunker prices. Second, the volume and timing of export quota allocations to the NOCs play an important role in determining the availability of domestically produced bunker fuel in bonded areas. At times, limited quota availability can tighten supply, resulting in shortages at China’s bonded ports. Third, during periods of geopolitical or market disruption, such as the Iran conflict since February 2026, market fundamentals can change rapidly, leading to heightened price volatility.  The bottom line is that, regardless of the absolute price spread between China and Singapore, fluctuations in the spread and China’s need to import bunker fuels continue to create arbitrage opportunities for traders.

MT: Anti-dumping duties and policies introduced by the European Commission and western regulators have resulted in overcapacity of UCOME in China; given the material cannot obtain ISCC EU certification to be blended as bio-bunker fuel (i.e. EU ETS, carbon credits), what will be your advice to Chinese holders of excess UCOME?

Like many other renewable energy products (such as solar panels) and electric vehicles, China’s UCOME industry has expanded rapidly and now faces growing trade barriers in Western markets because of its strong export growth. While there are no easy solutions for producers with excess capacity, several strategies could help.  First, producers should continue improving efficiency and reducing costs to remain competitive despite the import duties and other trade measures imposed by the EU and some other developed economies. Second, they should diversify export markets beyond the EU by targeting emerging opportunities in advanced economies such as Singapore. In particular, Singapore could leverage China’s surplus UCOME supply to accelerate the development of its sustainable aviation fuel (SAF) and bio-bunkering industries. Finally, China’s UCOME industry could encourage the Chinese government to expand domestic blending mandates, including greater use of SAF and bio-bunkering fuels, to stimulate domestic demand and help absorb excess production.

Dr Wu will be leading a two-day executive briefing, China Oil Market Dynamics, held on 26 to 27 October in Singapore. The intensive briefing will provide a comprehensive outlook on China’s oil market through 2035, covering the key market, policy, economic and structural forces shaping its future. More information on the event and registration can be found here.

Photo credit: Kang Wu
Published: 28 August, 2026

The Global Centre for Maritime Decarbonisation (GCMD) on Thursday (27 August) released its report, Quantity assurance in marine biofuel supply chains, outlining a practical approach to help shipowners verify that they receive both the total quantity of fuel and the renewable content contracted. 

The approach draws on evidence from GCMD’s end-to-end marine biofuel supply chain trials conducted under commercial operating conditions.

Biofuels are purchased not only for their energy content, but also for the renewable content and emissions reductions they represent. The renewable fraction determines the green premium and underpins GHG accounting and regulatory compliance, yet blend ratios, such as B24 or B30, are typically supplier-declared rather than independently verified. Closing this verification gap will strengthen confidence in marine biofuel transactions.

Ensuring reliable measurement of total quantity transferred

Mass flow meters (MFMs) have become the preferred method for custody transfer, as they provide a transparent and auditable basis for determining the quantity of fuel transferred.

However, adding fatty acid methyl ester (FAME) to conventional marine fuels, such as Very Low Sulphur Fuel Oil (VLSFO) or High Sulphur Fuel Oil (HSFO), can reduce the final blend’s viscosity, potentially pushing it outside the validated operating range of the MFM installed on the bunker barge. To maintain measurement integrity, the viscosity of the final blend should therefore be assessed under the actual transfer conditions against the applicable MFM operating range. This can be managed through appropriate transfer-temperature control or by using MFMs that have been validated for broader ranges.

Verifying the renewable fraction in biofuel blends

Verifying the renewable fraction requires appropriate analytical methods. FAME-based blends can be verified through compositional analysis, while hydrotreated vegetable oil (HVO)-based blends require radiocarbon analysis because renewable and fossil hydrocarbons cannot be distinguished through compositional testing. 

Interpreting analytical measurements, however, is not straightforward. Neat FAME may contain up to 3.5% non-ester material, so the measurable FAME content of a finished BXX blend may not exactly match its declared blend ratio.

Laboratory methods also have finite measurement precision. A difference between a measured result and a declared blend ratio therefore does not necessarily indicate incorrect blending or under-delivery.

Together, the three pillars of GCMD’s quality, quantity, and GHG emissions abatement assurance framework address whether the fuel is fit for use, delivers the claimed emissions reductions, and contains the contracted fuel quantity and renewable content. 

Professor Lynn Loo, CEO of GCMD, said: “Buyers need confidence that they have received both the fuel and the renewable content they paid for. This report provides a practical, evidence-backed basis for verifying renewable fuel claims, protecting commercial value and supporting credible GHG accounting as marine biofuel use scales.” 

Note: GCMD’s report can be found here. 

Photo credit: Global Centre for Maritime Decarbonisation
Published: 27 August, 2026

The Global Ethanol Association (GEA) and DNV on Monday (24 August) announced the launch of a three-year Ethanol Data Intelligence Partnership, marking an important expansion of their activities in ethanol research and data intelligence. 

The collaboration will support the development of a structured global ethanol database together with ongoing research, data maintenance and regular updates throughout the partnership.

Under the agreement, GEA will develop and provide comprehensive ethanol fuel data intelligence which will be integrated and made available to users of DNV’s Alternative Fuels Insight (AFI) platform. This initiative is designed to improve visibility and transparency across the global ethanol industry by bringing together structured and traceable information on ethanol production facilities and their characteristics from a fuelgrade perspective.

 The research will progressively capture and map key information including production facilities and their locations, production capacities, feedstocks and raw materials, fuel and output categories, based on documented and traceable sources. The research framework places particular emphasis on data quality and source traceability, drawing on publicly available and other verifiable information.

“With Morten Jacobsen, our Secretary General, and on behalf of our association, we are very pleased to develop this new capability, which further reinforces our role as an international coordination and execution platform for the ethanol industry,” said Sylvain Zurcher, President of the Global Ethanol Association.

“Through this collaboration, we are establishing the research infrastructure needed to map ethanol production facilities globally from a fuel-grade perspective and transform fragmented information into structured and traceable market intelligence. By providing greater visibility into areas such as production capacity, feedstocks, fuel categories and other fields of research, our objective is to help reduce information asymmetries for market participants and support better-informed decisions across the ethanol value chain.”

“As we have expanded and added new assets to the AFI platform we have always looked to build around the provision of high quality, verifiable data. And from our first meeting with GEA we have been very impressed by their commitment to providing the industry with solid insights on ethanol and the way they have already been able to build a solid network within the industry. This is looking to be a very productive partnership, and we are positive that this new data intelligence from GEA will enable our AFI customers to explore new shipping fuel pathways with confidence,” said Nathaniel Frithiof, Sales Lead Digital Products, DNV.

By developing a dedicated ethanol research and data intelligence capability, GEA aims to strengthen the information infrastructure available to organizations who are looking to evaluate ethanol across both emerging and established markets and applications. This new activity complements GEA’s existing work across its marine and aviation sector initiatives, project groups, policy engagement, and market-development activities.

Photo credit: DNV
Published: 25 August, 2026