- Marine fuel trading house KPI OceanConnect is looking to offer biofuel for bunkering at more ports, given higher demand as FuelEU regulations kick in next year.
- FuelEU standards open a new tab starting from Jan. 1, 2025, requiring the greenhouse gas intensity in shipping fuels to be cut by 2 per cent next year and an 80 per cent reduction by 2050.
Marine fuel trading house KPI OceanConnect is looking to offer biofuel for bunkering at more ports; a senior executive said this week on the sidelines of SIBCON 2024. This is in view of higher demand as FuelEU regulations kick in next year.
Jesper Sorensen, global head of alternative fuels and carbon markets, said the company is expanding its marine biofuel trade to 120 ports, up from about 70 ports previously. According to Sorensen, the company has delivered more than 300 biofuel stems to over 80 clients.
“The most developed region is Europe, where biofuels are available. In many locations, Asia is catching up,” he said, adding that the FuelEU regulation is a game-changer for demand.
FuelEU standards open a new tab starting from January 1, 2025, requiring the greenhouse gas intensity in shipping fuels to be cut by 2 per cent next year and an 80 per cent reduction by 2050.
“While there are many ways of complying with FuelEU maritime, it is the first regulation in place that puts a demand on what is burned,” Sorensen said.
Biofuels of B24 blend with International Sustainability & Carbon Certification can reduce greenhouse gas emissions by up to 20 per cent compared to conventional fuel oil. In comparison, pure biofuel can potentially reduce emissions by up to 85 per cent to 95 per cent.
Despite the potential to reduce emissions, demand growth is gradual because marine biofuels command a price premium.
Sorensen said it is also cheaper to buy emissions allowances over the European emission trading system (ETS) that started this year than to buy biofuels. “The EU ETS does not encourage the uptake of alternative fuels,” he said.
“If you look at the price gap between taking a biofuel, say a full biofuel (B100), for instance, which will exempt you from the ETS … that is so much more expensive than buying the equivalent EUAs,” he said.