Alternative marine fuels
Overview
The marine fuel sector is decarbonising. International Maritime Organization (IMO) requirements and EU legislation is driving this change alongside consumer demand for low carbon solutions.
These drivers have prompted shipowners to invest in alternative marine fuels including; marine biodiesel, bio-methanol, grey methanol, LNG, ammonia and hydrogen.
Argus provides pricing, insights, and intelligence for the fast-growing alternative marine fuels market with independent news, analysis, and market commentary on emerging changes and trends so you can stay ahead.
Argus Market Highlights: Marine Fuels
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Norwegian Cruise swings to 1Q profit
Norwegian Cruise swings to 1Q profit
New York, 1 May (Argus) — US-based cruise ship operator Norwegian Cruise Line's (NCL) swung to a profit in the first quarter on record bookings. The company posted a $69.5mn profit in the first quarter, compared with a $127.7mn loss during the same period of 2023. Revenue rose by 20pc to $2.19bn in the quarter from a year earlier as the cruise operator reported record quarterly bookings. Cruise operating expenses were up by 8pc at $1.39bn in the quarter from a year earlier. Norwegian rerouted some of its voyages that were previously expected to sail through the Red Sea. But demand from other regions offset the effect of the redeployed voyages. The company spent $197.7mn on marine fuel in the first quarter, 1pc up from $194.9mn in the first quarter of 2023. The company burned 269,000t of marine fuel and did not disclose its fuel consumption for the first quarter of 2023. It expects to burn about 245,000t in the second quarter and 995,000t for full 2024, split evenly between residual fuel oil and marine gasoil. Currently, it has hedged about 35pc of its fuel oil consumption at $395/t and 75pc of its marine gasoil consumption at $746/t for the entire 2024. Starting this year, Norwegian had been applying to the EU innovation fund with the goal of accelerating the transition of six of its vessels from being methanol ready to being fully methanol capable. Biomethanol was pegged at $2,223/t very low-sulphur fuel oil equivalent (VLSFOe) or 3.7 times the price of VLSFO average in April in the Amsterdam-Rotterdam-Antwerp bunkering hub, Argus assessments showed. Methanol was assessed at $699/t VLSFOe or 1.2 times the price of VLSFO. The company also has half of its fleet equipped with shoreside technology allowing it to use port electricity and minimize emissions during port stays. Norwegian has ordered eight new vessels for delivery from 2025-2036. Separately, its subsidiaries Oceania Cruises and Regent Seven Seas will take delivery of three new vessels from 2025-2029 and two new vessels from 2026-2029, respectively. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
HSFO demand supports Rotterdam 1Q bunker sales
HSFO demand supports Rotterdam 1Q bunker sales
London, 30 April (Argus) — Total sales of fossil bunker fuels and marine biodiesel blends at the port of Rotterdam were 2.45mn t in the first quarter this year, up by 13pc compared with the final three months of 2023 but 9pc lower year on year, according to official port data. Sales firmed across the board quarter on quarter, even though market participants had described spot bunker fuel demand in the region as "mostly limited" and shipping demand as lacklustre. High-sulphur fuel oil (HSFO) sales rose the most. Disruption in the Red Sea resulted in many vessels re-routing around the southern tip of Africa, increasing the incentive of bunkering with HSFO as opposed to very low-sulphur fuel oil (VLSFO) and marine gasoil (MGO), according to market participants. The longer journeys meant that vessels on the route increased their fuel consumption to reduce delivery delays, supporting conventional bunker fuel sales at Rotterdam. Higher prices for HSFO in Singapore also helped support HSFO demand in Rotterdam. Marine biodiesel sales at Rotterdam increased by 13pc on the quarter and by 76pc on the year in January-March, despite the Dutch government's decision to half the Dutch renewable tickets (HBE-G) multiplier for shipping at the turn of the year. The move has led to a substantial increase in prices for advanced fatty acid methyl ester (Fame) 0 blends in the Amsterdam-Rotterdam-Antwerp (ARA) hub. The inclusion of shipping in the EU's Emissions Trading System (ETS) from January may have lent support to demand for biofuel blends. Marine biodiesel made up 11pc of total bunker fuel sales at Rotterdam in the first quarter, the same share as the previous quarter, which was a record high. LNG bunker sales at Rotterdam in January-March soared by 45pc on the quarter and by 150pc on the year. By Hussein Al-Khalisy Rotterdam bunker sales t Fuel 1Q24 4Q23 1Q23 q-o-q% y-o-y% VLSFO & ULSFO 857,579 847,862 1,205,288 1 -29 HSFO 818,028 643,218 809,871 27 1 MGO/MDO 383,409 361,585 468,373 6 -18 Biofuel blends 262,634 233,108 149,206 13 76 Total 2,453,610 2,177,078 2,685,515 13 -9 LNG (m³) 131,960 91,305 52,777 45 150 Port of Rotterdam Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Norway's marine bio mandate ineffective: Marine market
Norway's marine bio mandate ineffective: Marine market
London, 29 April (Argus) — Norway's 6pc advanced biodiesel mandate for marine, which came into effect in October, has done little to incentivise the uptake of physical marine biodiesel blends at Norwegian ports, market participants told Argus . As of October 2023, bunker fuel suppliers in Norway must ensure that a minimum of 6pc, on a volume per volume basis, of the total amount of liquid fuels sold per year consists of advanced biofuel in the form of fatty acid methyl ester (Fame) or hydrotreated vegetable oil (HVO). The mandate is only applicable to bunker fuels sold in the domestic market, impacting vessels operating between Norwegian ports as well as local tugboats, offshore supply barges, and fishing vessels. Market participants confirmed that the mandate operates on a mass-balance system at the moment, such that the mandate could also be met by supplying the equivalent amount of biofuels into the inland road sector. Consequently, participants said that very few buyers end up purchasing the physical marine biofuel blends, and instead marine fuel suppliers have had to utilise the mass-balance system to meet their mandated targets. This has resulted in a premium added onto conventional bunker fuels in Norwegian ports of about $56-60/t on average. A market participant described the current system as "like a CO2 tax", with most marine fuel buyers paying the premium rather than purchasing a marine biodiesel blend directly. Participants told Argus that HVO is popular and frequently used in road transport because of its superior specifications compared with biodiesel and its generally low freezing point. Norway's HVO imports typically originate from the US — Kpler data shows that about 68.4pc of HVO flows into Norway have originated from there this year. This is mainly because Norway does not apply the same anti-dumping measures as EU nations, which typically put a substantial premium on US-origin biodiesel imports. Norwegian shipowners going internationally are exempt from being liable to the additional premium imposed by the mandate. But participants told Argus that they usually have to pay the premium and then claim it back from the Norwegian Environment Agency (NEA). The system may change very soon. Market participants told Argus that the NEA is considering some changes to the mandate requirement. A gradual move away from the mass balance system is being discussed, in favour of a physical product mandate that would require biofuel blends to be sold to bunker fuel buyers. Further, a switch from an annual reporting system to a monthly one could also be on the cards. NEA is also reportedly looking at mandating the availability of marine biodiesel at all Norwegian ports and biodiesel fuel reconciliation at the tank rather than terminal. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Cepsa supplies HVO bunker fuel in Algeciras
Cepsa supplies HVO bunker fuel in Algeciras
London, 24 April (Argus) — Spanish refiner and bunker fuel supplier Cepsa has recently delivered 150t of 100pc hydrotreated vegetable oil (HVO) by truck to the Ramform Hyperion at the port of Algeciras. The supply follows market participants reporting firmer buying interest for HVO as a marine fuel from ferry lines in the Mediterranean in recent sessions. The supplied HVO is said to be of class II, with used cooking oil (UCO) as the feedstock. Cepsa added that the supply was completed in cooperation with Bunker Holding subsidiary Glander International Bunkering, and could bring about a greenhouse gas (GHG) emissions reduction of up to 90pc compared with conventional fuel oil. Cepsa will also look to obtain capability to supply marine biodiesel blends exceeding 25pc biodiesel content by the end of the year, delegates heard at the International Bunker Conference (IBC) 2024 in Norway. This also follows plans by Cepsa to build a 500,000 t/yr HVO plant in Huelva , set to start production in the first half of 2026. Argus assessed the price of class II HVO on a fob Amsterdam-Rotterdam-Antwerp (ARA) basis at an average of $1,765.54/t in April so far, a premium of $906.41/t to marine gasoil (MGO) dob Algeciras prices in the same month. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Spotlight content
Impact of EU ETS in 2024 and IMO’s emissions strategy
From 2024, ship owners will be required to pay for 40pc of their CO2 emissions under the EU Emission Trading Scheme (EU ETS) when operating in EU territorial waters. Meanwhile, the IMO has revised its greenhouse gas (GHG) emissions strategy. How will these regulatory developments impact fuel choices for the maritime sector? This webinar will provide a price comparison of alternative and conventional marine fuels and discuss the most feasible options.
Insight papersMarine biodiesel demand to rise
As marine gasoil supply tightens and shipowners seek more sustainable options, marine biodiesel, a blend of Advanced Fame 0 and very low sulphur fuel oil (VLSFO), could provide a reasonably competitive, low sulphur and low carbon alternative. This white paper examines dynamics including demand and pricing for the fuel.
WebinarsAlternative marine fuel price competitiveness to 2025
Dive into the forecast for the marine fuels markets with this complimentary webinar from our consultant behind Argus Marine Fuels Outlook, Elena Domashenko.
Alternative marine fuels key prices
Argus Marine Fuels features a comprehensive range of alternative marine fuels prices (in $/t VLSFO, $/t HSFO, and $/t MGO equivalents and $/mn Btu).
Latest events
Global alternative fuels vessel databases
Argus Marine Fuels includes access to proprietary data in three downloadable databases, providing essential insights into the changing marine fuels market:
Spot deals and firm quotes
This list of spot deals gives buyers and sellers understanding where they stand price-wise compared with their competitors. Argus’ daily deals/quotes detail the port, type of fuel, size of the deal, price, delivery method and delivery dates. It does not include counterparties’ names.
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Alternative fuels vessels and supplier list
Argus lists vessels that are burning alternative marine fuels, including methanol, biofuels, ammonia, hydrogen, LNG, LPG, as well as those running on batteries. The database is updated every month.
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Scrubbers
The database is updated every month. It contains over 4,300 records and counting.
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