FuelEU to Power Shipping’s Fast Growing Biofuels Demand

by Marcus Hand (Seatrade Maritime News) Biofuels are rapidly gaining market share for alternative marine fuels and seen as good way of complying with the FuelEU standard next year. -- Singapore biofuel sales surpass 400,000 tonnes in first eight months of the year; Biofuels offer readily available solution to meet FuelEU standard next year; A need to diversify feedstocks given demand competition from other industries

Sales of biofuel blends in the Port of Singapore surpassed 400,000 tonnes in the first eight months of 2024, this compares to 283,000 tonnes in the same period last year, according to figures from the Maritime & Port Authority of Singapore (MPA).

Demand for biofuels surpasses that of the other major alternative fuel LNG, which is also growing in momentum, with sales of close to 300,000 tonnes in Singapore for the first eight months of 2024.

Speakers at the Singapore International Bunkering Conference and Exhibition (Sibcon) expect continued demand growth for biofuels as it is an option that is available now to reduce emissions and can be applied to existing ships with minimal investment as a drop-in fuel. Sibcon is the world’s largest bunkering event and managed by Informa Markets for the MPA.

One of the factors that will drive further adoption of biofuels is the European FuelEU regulation which comes into force January 2025 requiring a 2% reduction in carbon intensity. “It’s a good option at the moment meet FuelEU,” one speaker said, and another described the regulation a “game changer” in terms of biofuels demand.

Unlike many other alternative fuel options biofuels are readily available in the market and there are guarantees from engine makers for use of fuels even up to the B100 level.

In addition to the upcoming FuelEU regulation a growing number of container lines are offering services with biofuels to meet demand from customers wanting to decarbonise their supply chains. The latest container line to announce it would be using biofuels is Taiwanese carrier Wan Hai Lines.

Looking ahead shipping will need to diversify its sources of biofuels which currently focus mainly on FAME based fuels from used cooking oils. “Used cooking oil is a drop in the ocean, so we need to other feedstocks,” one speaker commented.

Demand by airlines for sustainable aviation fuels was seen as competing with shipping with the aviation sector able to pay more than shipping. In 2035 the EU will limit the use of first-generation biofuels, currently used mainly in trucks, providing another competing source of demand.

Newbuilding demand for dual-fuel LNG vessels has bounced back this year having previously been displaced by methanol. According to figures from DNV’s Alternative Fuels Insights platform for the year to the end of September, orders for LNG-capable ships rose by 57% on-year to 169, while methanol orders slipped by 1% to 133 vessels.

Peter Keller chairman of SEA-LNG commented, “The LNG pathway using liquefied biomethane and eventually hydrogen-based e-methane currently provides the only viable option to making progress towards 2050, starting with immediate carbon reductions, now. LNG also continues to help solve critical local emissions and health related environmental concerns.”

According to the MPA a study by the Singapore - Rotterdam Green and Digital Shipping Corridor sees a potential demand by 2028 for up to 5 million tonnes a year for green methane and methanol on 200 vessels operating between the two of the largest ports in Asia and Europe. READ MORE