News
14/02/25
Biomethanol-methanol diff widens, UK demand ticks up
London, 14 February (Argus) — The spread between biomethanol and conventional
methanol is the highest in more than nine months, at $734/t. This is partly
driven by falling European methanol prices, with the methanol fob Rotterdam
barge quote hitting $348.97/t on 12 February, the lowest since 7 August.
Increased imports from the US, and the restart of a 900,000 t/yr capacity
European plant have put downward pressure on prices. Biomethanol values ticked
higher in recent sessions, tracking gains in the wider biofuels complex after
record low values for renewable fuel tickets — tradeable credits generated
primarily by the sale of biofuel-blended fuels — in major European demand
centres in 2024. European demand for biofuels in 2025 could be supported by a
combination of higher mandates for the use of renewables in transport, and by
changes to regulations on the carryover of renewable fuels tickets in Germany
and in the Netherlands . UK biomethanol prices and demand rise In the UK, the
Argus cif biomethanol price has averaged $1,110/t so far in February, a $22/t
increase from January and a $60/t rise from the September 2024 average, when
prices hit a record low. The price averaged around $1,094/t in February last
year. Prices have been in part supported by stronger renewable fuel ticket
prices (RTFCs) in the UK recently, according to market participants. UK 2025
non-crop RTFCs averaged 25.45p in the first quarter of 2025 so far, an increase
of 1.88p when compared with the previous quarter. Demand picked up in the UK and
the wider European market, including from voluntary sectors, at the beginning of
the year, participants said. Biomethanol is used as a gasoline blending
component in the UK. Consumption in the country in 2024 rose by 45pc on the year
but was lower by 7.9pc than in 2022 at 58mn litres, according to the third
provisional release of the 2024 Renewable Transport Fuel Obligation statistics.
The Argus biomethanol fob Amsterdam-Rotterdam-Antwerp (ARA) netback quote was
$1,083/t on 12 February. FuelEU fuels demand The January rollout of the FuelEU
Maritime regulations could increase demand for biomethanol in shipping. Ship
operators traveling in to, out of and within EU territorial waters must reduce
their greenhouse gas (GHG) intensity on a lifecycle basis by 2pc. The reduction
rises to 6pc from 2030 and gradually reaches 80pc by 2050. Shipping companies
can choose from a range of alternative marine fuels to reduce their emissions.
Only dedicated ships can run on methanol alone, but many companies, including
Maersk , have ordered dual-fuel vessels that can run on methanol and traditional
bunker fuels, along with biofuel blends like B24 — a mix of very-low sulphur
fuel oil (VLSFO) and used cooking oil methyl ester (Ucome) biodiesel.
International offtake agreements for renewable methanol are also on the rise.
Maersk has signed several letters of intent for procurement of biomethanol and
e-methanol from producers including Equinor , Proman and OCI Global , and has an
agreement with Danish shipping and logistics company Goldwind for 500,000 t/yr
from 2024. Biomethanol and e-methanol are likely to be the most competitive and
scalable pathways to decarbonisation this decade, Maersk said . While relatively
small, Maersk's 'green marine' fuel consumption, which includes biomethanol,
increased by 38pc in 2024 to 3,034 GWh. Singaporean container shipping group
X-Press Feeders said it will buy biomethanol from OCI's Texas plant starting
from 2024. Biomethanol bunker sales in the port of Rotterdam dropped by more
than half in the fourth quarter of 2024 compared with the third quarter, to
930t, but sales were 86pc higher than those in the fourth quarter of 2023,
according to Port of Rotterdam data . UDB risk to biomethanol imports The
European Commission's proposal to exclude automatic certification of biomethane
and biomethane-based fuels from the Union Database for Biofuels, if relying on
natural gas that has been transported through grids outside the EU, has been
slowing some negotiations for 2025 biomethanol imports — particularly from the
US — according to market participants. Industry bodies have expressed concerns
about implementation of the database, particularly that it will impede the
bloc's biomethane development. Burdensome fees, overly strict deadlines, risk of
double counting, and a significantly increased number of participants required
to enter data will slow market growth, said the European Compost Network and the
European Waste Management Association. They recommend mandatory use of the UDB
be postponed until 1 January 2026 "at the earliest". By Evelina Lungu Send
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