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WTO asks EU to adjust RED II over palm oil: Update

  • Spanish Market: Biofuels
  • 06/03/24

Adds Malaysia's reaction

A World Trade Organisation (WTO) panel said the EU must adjust its Renewable Energy Directive (RED II) because certain aspects of the act are inconsistent with WTO rules.

The decision was made in a claim brought by Malaysia against the EU concerning palm oil and oil palm crop-based biofuels in renewable energy consumption targets.

Palm oil was classified as a high indirect land use change (ILUC) risk feedstock in 2019, which means it is subject to a crop cap and must be phased out by 2030.

ILUC can occur when pasture or agricultural land previously destined for food and feed markets is diverted to biofuel production.

In a decision that can be appealed, the WTO found that the procedure used in identifying ILUC-risk criteria, among other things, "accords less favourable treatment to palm oil-based biofuel from Malaysia than that accorded to like products of EU origin", and "does not accord an advantage to palm oil-based biofuel from Malaysia that is accorded to like products imported from third countries".

The EU said it will "take the necessary steps to adjust the Delegated Act".

The Malaysian Ministry of Plantation and Commodities said it will "closely monitor the EU's changes to its regulations to bring it in line with the WTO's findings, and pursue compliance proceedings if necessary". The ruling "demonstrates that Malaysia's claims of discrimination are indeed justified", the ministry added.


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05/02/25

IMO mulls higher biofuel blend cargoes on Type I ships

IMO mulls higher biofuel blend cargoes on Type I ships

Singapore, 5 February (Argus) — The International Maritime Organization (IMO) is reviewing a proposal on the delivery of biofuel blends of up to 30pc on Type I barges, and is expected to approve this soon, according to several key maritime assessors and classification societies. The proposal, once approved by IMO, is expected to increase B30 bunkering globally as it would allow for the sale of B30 using the current available fleet of IMO Type I oil barges at any port, likely leading to a higher uptake of biofuel blends. B30 is a blend of 70pc very low-sulphur fuel oil (VLSFO) or high-sulphur fuel oil (HSFO) with 30pc used cooking oil methyl ester (Ucome). The draft circular on the carriage of blends of biofuels and MARPOL Annex I cargoes by conventional bunker ships was accepted by IMO's sub-committee on pollution prevention and response (PPR) during its 12th session from 27-31 January. The draft is expected to be approved at the next Marine Environment Protection Committee (MEPC) 83 meeting to be held from 7-11 April. Details of the 12th PPR meeting had not been published on IMO's website at the time of writing. The International Convention for the Prevention of Pollution from Ships (MARPOL) is an agreement that covers the prevention of pollution of the marine environment by ships. Annex I covers pollution by oil and oil products carried or operationally used by ships. Type I ships that deliver conventional bunker fuels can currently carry up to 25pc of biofuels under MARPOL Annex I, which has resulted in the adoption of the B24 blend in key ports across Asia, the Middle East and the Mediterranean region in the past few years. B24 consists of 24pc Ucome blended with 76pc fuel oil, which could be either VLSFO or HSFO. IMO has previously stated that Type II chemical tankers should be used for transporting biofuel blends with concentrations higher than 25pc. Shipowners have hence been waiting for the delivery of more Type II tankers, which are currently in limited supply at many ports. Market participants at the key port of Singapore are awaiting the impact of the decision in April. Enquiries for B30 have been surfacing in the past couple of months and refiners, traders, and shipowners are waiting for the outcome from MEPC 83, as well as subsequent decisions by the Maritime and Port Authority (MPA) of Singapore on how this will be implemented in the country, said several Singapore-based market participants. "[We] need to see if MPA agrees to follow IMO," said a key Singapore-based trader. MPA has not responded to a request for comment. The current push for higher biofuel blends comes as shipowners prepare to meet stricter compliance requirements set by IMO's Carbon Intensity Index and EU-led Emissions Trading Scheme and FuelEU Maritime. Demand for alternative marine fuels, especially biofuel blends and LNG, is expected to rise as shipowners look at reducing greenhouse gas (GHG) emissions across their fleets. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

EU maritime emissions continue to rise: EMSA


04/02/25
04/02/25

EU maritime emissions continue to rise: EMSA

London, 4 February (Argus) — Greenhouse gas (GHG) emissions from the EU's maritime sector have continued to rise since 2015, the European Maritime Safety Agency (EMSA) found in its 2025 environmental report, although "promising progress" has been made in some areas. Maritime activity was responsible for 26pc of methane emissions and 39pc of NOx emissions in the EU transport sector in 2022, as well as for 14.2pc of CO2 emissions from the sector, the report said. Methane emissions from maritime "at least doubled" from 2018-23, the report found, pushed up by growth in the LNG fleet. NOx emissions rose by 10pc from 2015-23, while CO2 emissions totalled 137mn t in 2022, having risen by 8.5pc from a year earlier. But sulphur oxide (SOx) emissions fell by approximately 70pc in 2023 compared with 2014 levels, EMSA said. This was driven mainly by the implementation of Sulphur Emission Control Areas (SECAs) in the Baltic and North seas, while the tightening of maximum sulphur levels in marine fuel in 2020 further contributed to the fall in SOx emissions. EMSA expects SOx emissions to drop further once a SECA is established in the Mediterranean Sea. And the northeast Atlantic countries may set up an emission control area by 2027. Biofuels are an "immediate, attractive and cost-effective solution" to cutting GHG emissions in the maritime sector, EMSA said. And synthetic and other drop-in fuels, which can be blended with fossil fuels, could help the shipping sector transition to lower emissions. But their costs could prove an obstacle because they are still "significantly higher" than for marine fossil fuels, the report said. Further electrification of ships could assist in decarbonising short-range waterborne transport, the report said. And the establishment of green shipping corridors — zero-emission maritime routes — could further encourage investment in sustainable fuels and supply chains, EMSA added. The EU emissions trading system-financed Innovation Fund has already supported more than 300 shipping projects, the report said, with funding to be deployed out to 2030. By Navneet Vyasan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariffs not only US threat to Canada canola oil


04/02/25
04/02/25

Tariffs not only US threat to Canada canola oil

New York, 4 February (Argus) — Canadian canola farmers have reason to celebrate a last-minute deal to at least delay US tariffs. Changing US biofuel policies, however, could dim their excitement. The two countries agreed Monday to pause for a month 25pc tariffs on most Canadian imports, including agricultural products like canola oil. While best known for its use in food, canola oil has become an increasingly important ingredient in US biofuel production. Canada exported 800,000 lbs of crude canola oil to the US in 2021, before US regulators allowed more canola-based fuels to qualify for a biofuel mandate, but more than three times that total over just 11 months in 2024 according to customs data. Canola oil from all origins made up around 12pc of the US biomass-based diesel feedstock mix last year. The challenge for Canada is that policies in the US that helped cement canola oil's role in biofuel production are increasingly encouraging producers to use other feedstocks. The mere threat of tariffs could speed that trend along. A long-running US tax credit for blenders of biomass-based diesel expired last year and was replaced by the Inflation Reduction Act's "45Z" credit, which requires fuels to meet an initial carbon intensity threshold and then ups the subsidy as emissions fall. This shift was always expected to benefit waste feedstocks over crops, which incur a carbon penalty for land changes and fertilizer use. The clear message to refiners — both from the US government and from California regulators that run the state's influential low-carbon fuel standard — has been to diversify beyond vegetable oils. But an updated emissions model released by the Department of Energy last month surprised some in the industry by assessing the default carbon intensity of canola-based fuels as too high to automatically qualify for 45Z. Although fuels from soybean oil generally earn some credit, diesels made from canola oil could go from earning $1/USG last year to nothing this year. Before even factoring in potential tariffs, Canadian canola oil appears less attractive for refiners than even competing crops. Guidance on 45Z is preliminary , meaning canola crushers can push for final rules that are less restrictive. But energy lobbyists say privately that they do not expect the new administration to act with urgency to implement an incentive created by Democratic lawmakers and oriented around climate change. And many Republicans' concern with the credit is not that it is too harsh on canola — but that it is too permissive of foreign feedstocks they see as hurting US crop demand. The introduction of 45Z could simultaneously leave Canadian biofuel producers less able to backfill canola oil demand if US buyers look elsewhere. The credit can only be claimed by US producers, cutting off subsidies for imported fuels. At the same time, 45Z does not require fuel to be consumed stateside — meaning that US biorefineries can send subsidized fuel abroad to chase additional incentives Canada offers for biofuel usage. "The on-again off-again status of US tariffs and Canada's counter-tariff response do not alter the bare economics of biofuel production between jurisdictions when one has an exportable tax credit and the other does not," said Fred Ghatala, president of Advanced Biofuels Canada. The future of renewable diesel production in Canada, previously expected to grow significantly to the benefit of farmers, is in doubt. ExxonMobil's Canadian subsidiary is on track to open a 20,000 b/d renewable diesel plant this year, but other companies collectively representing more production capacity are wavering. Plans for an integrated canola crush and 15,000 b/d renewable diesel facility in Saskatchewan were paused last month. And it is unclear if Braya Renewable Fuels' 18,000 b/d biorefinery in Newfoundland is running now or if Tidewater Renewables' 3,000 b/d British Columbia plant will run after March. If demand from Canadian biorefineries remains limited, some traders expect that Trump's tariff threats could divert more canola oil previously bound for the US to Europe . But there is no perfect alternative to the US market, which accounted for 91pc of all Canadian canola oil exports in 2023 according to the US Department of Agriculture. "There is logistics capacity to sell canola oil, seed, or meal abroad. That's certainly an option," said Chris Vervaet, executive director of the Canadian Oilseed Processors Association. "The best option though is to continue to maintain and grow our trade relationship with our most important trade partner, which is the United States." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Study calls for e-fuels bunker subsidies, GHG tax


30/01/25
30/01/25

Study calls for e-fuels bunker subsidies, GHG tax

New York, 30 January (Argus) — E-fuel subsidies and a greenhouse gas (GHG) emissions tax is needed for e-fuels to compete as a bunkering fuel before 2044, said a study by maritime consultancy University Maritime Advisory Services (Umas) and the UCL Energy Institute. The study found that adding a multiplier of the GHG intensity credit given to e-fuels could help to make e-fuel use financially competitive, but it would have to be set at high levels at the start. Using a multiplier of two, where one ship running on zero emissions e-fuel could generate credits to offset three other similar ships operating on conventional fossil fuels, was not able to make e-fuels more competitive before 2041. The multiplier would have to be set initially at 15 in 2030, falling to 10 by 2035, to enable the competitiveness of e-fuels, concludes the study. Additionally, levying a GHG tax or fee of $150-$300/t of CO2-equivalent would also make e-fuels more competitive. A tax of $30-$120/t CO2e is close to the aggregate level of subsidies, and would not create a sustained promotion of e-fuels. Under the current marine fuel standards, a combination of fossil fuels, including LNG, biofuels and carbon capture and storage systems would be most competitive up until 2036. After, blue ammonia dual fuel ships would be the lowest-cost solution until 2044. Ships that were more competitive from 2027-2035 would have at least 25pc higher operating cost from 2040 onwards. Thus, if ship owners order newbuild vessels to maximize short-term competitiveness, the sector is at a "major risk of technology lock-in" and will not be as cost-effective for reaching net zero by 2050. The study models a 2027-build, 14,000 twenty-foot equivalent unit container ship. The vessel sails between Asia and Latin America using different marine fuels such as bio-methanol, e-methanol, LNG, bio-LNG, e-LNG, bio-marine gasoil (MGO), e-MGO and very low-sulphur fuel oil. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Marine biodiesel sales drop in Rotterdam port 4Q 2024


30/01/25
30/01/25

Marine biodiesel sales drop in Rotterdam port 4Q 2024

London, 30 January (Argus) — Marine biodiesel demand fell in the final quarter of last year in the port of Rotterdam, while LNG sales picked up ahead of the introduction of FuelEU Maritime regulations at the turn of the new year. Sales of marine biodiesel blends in Rotterdam fell by 13.8pc on the quarter and just under 50pc on the year in October-December. This contrasts with an increase of about 62pc on the quarter for marine biodiesel blend sales in Singapore, pointing to a continued trend of voluntary demand shifting east of Suez. Participants reported this trend throughout last year, with more competitive prices for the blends in Singapore. Argus assessed B24 dob Singapore, a blend comprising very-low sulphur fuel oil (VLSFO) and used cooking oil methyl ester (Ucome), at an average discount of $10.58/t against B30 Advanced Fatty acid methyl ester (Fame) 0 dob ARA in the final quarter of 2024. B24 dob Singapore was marked at an average discount of $119.34/t against B30 Ucome dob ARA. Consequently, shipowners seeking to deliver proof of sustainability documentation to their customers, to offset the latter's scope 3 emissions, shifted their marine biodiesel demand to Singapore when feasible. FuelEU Maritime regulations, which came into effect in January and require a reduction in greenhouse gas (GHG) emissions from vessels every year, will probably incentivise regulatory-driven demand for marine biodiesel blends. But the regional price dynamics between ARA and Singapore will probably remain relevant to regulatory-driven demand as well, as energy consumed from blends bunkered in Singapore can be mass balanced to be fully accounted for under the scope of FuelEU Maritime. The pooling mechanism within FuelEU Maritime would also allow for vessels operating on the east-west route to potentially utilise compliance generated from marine biodiesel blends bunkered in Singapore across other vessels that operate solely in Europe. LNG sales picked up by 19.5pc on the quarter and soared by 76.6pc on the year ahead of the introduction of FuelEU Maritime regulations at the start of 2025. Fossil LNG, depending on the type of engine used on board, can help shipowners with LNG-capable vessels meet their FuelEU compliance targets for 2025. The Gate LNG import terminal is planning to start operations at a second jetty for LNG bunker vessels in 2028, pointing to expectations of greater demand. Bio-LNG sales were reported for the first time in 2024 since small volumes in 2021, ahead of FuelEU Maritime regulations. Conventional bunker fuel sales comprising VLSFO, ultra-low sulphur fuel oil (ULSFO), marine gasoil (MGO), marine diesel oil (MDO), and high-sulphur fuel oil (HSFO) dipped by 4.7pc on the quarter but rose by 17.7pc on the year in October-December. VLSFO sales alone were marked higher than HSFO's for the first time at the port since the last three months of 2023. Total VLSFO volumes traded in the fourth quarter came to nearly 811,000t, down by 3pc from the previous quarter, while HSFO sales totalled 780,500t, down by 14pc. Market participants attribute this retail drop-off to considerable local HSFO supply-side constraints at the end of 2024. Thin volumes produced by CDUs at refineries in the Amsterdam-Rotterdam-Antwerp (ARA) hub meant imported volumes were needed to cover shortfalls. Refineries cut throughput runs, reducing residual byproduct output. Biomethanol sales dropped by over half on the quarter, under pressure from thin trading activity, but were 86pc higher on the year in the final quarter of 2024. Shipping giant Maersk has signed several letters of intent for the procurement of biomethanol and e-methanol from producers such as Equinor , Proman and OCI Global . But the European Commission's proposal to exclude automatic certification of biomethane and biomethane-based fuels for the Union Database for Biofuels if relying on gas that has been transported through grids outside the EU, could slow some negotiations for 2025 imports of biomethanol of US origin into the EU. By Hussein Al-Khalisy, Bob Wigin and Evelina Lungu Rotterdam bunker sales t Fuel 4Q24 3Q24 4Q23 q-o-q% y-o-y% VLSFO & ULSFO 1,004,398 1,045,774 847,862 -4 18.5 HSFO 780,437 906,737 643,218 -13.9 21.3 MGO/MDO 395,903 334,752 361,585 18.3 9.5 Conventional total 2,180,738 2,287,263 1,852,665 -4.7 17.7 Biofuel blends 118,201 137,175 233,108 -13.8 -49.3 LNG (m³) 263,068 220,120 148,933 19.5 76.6 bio-LNG (m³) 575 0 0 na na biomethanol 930 2,066 500 -55 86 Port of Rotterdam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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