16 March 2024 (Lloyd's List) - THE FuelEU Maritime legislation could more than double biofuel bunkering demand in Europe, according to Bunker Holding.
The world’s biggest marine fuel trader expects total biofuel demand to exceed 1m tonnes in 2025, up from an estimated 400,000-500,000 tonnes in 2023, the company’s head of biofuels Manja Ostertag told Lloyd’s List on the sidelines of the Argus Green Marine Fuels Conference.
The FuelEU legislation mandates that vessels 5,000 gt and above must cut the greenhouse gas intensity of onboard energy by 2% from 2025, rising to 6% in 2030. The most popular compliance option is expected to be biofuel blending, because it does not require significant modifications for most vessels.
“If we are looking at 2030 targets under FuelEU, 6% carbon intensity needs to be reduced. So that equals roughly to 4.6m tonnes of very-low sulphur fuel oil or around 5m tonnes of fatty acid methyl esters bio-diesel that needs to be blended,” Ostertag told a panel.
Bunker Holding expects Dutch ports such as Rotterdam and Amsterdam to continue hosting most of the biofuel deliveries, as Dutch subsidies will keep bio-diesel cheaper. Deliveries could also pick up in Scandinavian and western Mediterranean ports, Ostertag added.
Biofuel deliveries in eastern Mediterranean ports in Türkiye and Greece could be slow to increase initially as supply is limited in these ports, Ostertag said.
Turkish suppliers such as Arkas and Vitol subsidiary Petrol Ofisi plan to supply biofuel bunkers, having recently received ISCC certification. In April this year, Türkiye’s energy regulator greenlit biofuel blending of up to 30% in bunker deliveries.
Last year, biofuel-blended bunker sales totalled 752,000 tonnes in Rotterdam, down from 791,000 tonnes in 2023, according to the port authority.
It is not possible to calculate total biofuel blended in bunkers from Rotterdam’s figures, as the totals include all blended volumes. But the total amount of biofuel blended in 2023 was likely to be less than half of 750,000 tonnes, as the most popular biofuel blend comprises 25-30% biofuel and 70-75% very low sulphur fuel oil.
Despite the higher demand outlook for biofuels, bunker suppliers said they did not expect supply shortages.
“Until 2030 based on the current legislation, I do not see a supply crunch,” said biofuel supplier GoodFuels commercial director Johannes Schurmann.
“You can also use LNG, according to the current FuelEU methodology. And combined with a pooling system for FuelEU, demands for sustainable fuels will be relatively low.”
