Biomethanol market slows, but shipowners eye offtakes

Spanish Market: Biofuels, E-fuels
16/05/24

The UK's biomethanol consumption fell by 37pc last year as competition from alternative renewable fuel compliance options weighed on demand.

The UK consumed 40mn litres of biomethanol in 2023, down from 63mn l in 2022, 53mn l in 2021 and 48mn l in 2020, according to provisional data from the country's Department for Transport.

Biomethanol is used as a blending component for gasoline in the UK. Market participants attribute the decline in demand to ample supply of competitively priced alternatives to meet the UK's mandate for the use of renewable fuels in the transport sector.

Fob ARA range biodiesel prices fell to a 19-month low towards the end of 2023, following an unusually large influx of supply to Europe from China since the start of the year. EU biodiesel imports from China reached a record 1.06mn t in 2023, up from 557,000t in 2022, according to GTT data.

The increase in imports contributed to lower renewable fuel ticket prices in key European markets, including the UK. Companies supplying biofuels for transport in the UK can generate renewable transport fuel certificates (RTFCs), which are tradeable and can help obligated parties meet the UK's renewables' mandate. The Argus UK non-crop RTFC reduction obligation price averaged 21.79 pence/RTFC in 2023, compared with 36.35p in 2022. The price has averaged 16.79p so far this year, compared with 26.40p and 37.39p in the same period in 2023 and 2022, respectively.

The drop in demand for biomethanol from the UK transport sector is weighing on domestic prices. The Argus cif UK biomethanol price has averaged $1,081.43/t so far in May, having been on a consistent downward trend since late October when the price peaked at $1,205/t. The price averaged $1,212.75/t in May 2023.

The slowdown in demand has put biomethanol production margins under pressure, prompting some producers to cut output.

Silver lining

Demand for renewable methanol, in the form of both biomethanol and e-methanol, could be supported by growing interest from the maritime sector in the coming years as shipowners seek to reduce their emssions. The EU's FuelEU maritime regulation is due to come into effect at the start of next year. It aims to reduce the greenhouse gas (GHG) intensity of marine fuels by 2pc in 2025 and by 80pc by 2050.

Shipping companies can choose from a wide range of alternative marine fuels to reduce their emissions, but several are betting on methanol and renewable methanol. Danish shipping giant Maersk has ordered 24 methanol-powered container ships for delivery and commissioning during 2024-25, and Japanese classification society ClassNK said in a recent report that it expects a total of 77 methanol-ready ships to be ordered by 2026, up from 27 methanol newbuilds expected to be ordered this year.

Offtake agreements for renewable methanol are also on the rise. Maersk has signed several letters of intent for the procurement of biometanol and e-methanol from producers such as Equinor, Proman and OCI Global. The company also said it has secured an agreement with Danish shipping and logistics company Goldwind for the offtake of 500,000 t/yr from 2024. Meanwhile, Singaporean container shipping group X-Press Feeders said last year that it will offtake biomethanol from OCI's Texas plant starting this year.

Another spanner in the works?

Although the outlook on renewable methanol demand from the shipping sector appears bright, the recognition of biomethane and biomethane-based fuels produced through mass balancing in non-EU grids is uncertain.

More than 40 energy companies and institutes have sent joint letters to the European Commission asking for these products to be included in the Union Database, which aims to prevent the relabelling of biofuels' sustainability declaration.

The UDB was launched in January 2024 for liquid fuels and will include gaseous fuels in November, but the commission plans to exclude automatic certification of biomethane and biomethane-based fuels if it is transported through gas grids outside of the EU.

The measure "is likely to reduce the availability and increase the cost of low- and zero-carbon bunker fuels for shipping" and may also impact hydrogen and hydrogen-derived fuels, one of the letters sent to the commission said.

By Evelina Lungu

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15/05/25

Verkehrssektor verfehlt Klimaziele

Hamburg, 15 May (Argus) — Der Verkehrssenktor hat sein Emissionsreduktionsziel in 2024 verfehlt. Dies geht aus dem Prüfbericht des Expertenrats für Klimafragen hervor. Branchenverbände des Kraftstoffmarktes nutzen den Bericht als Appell an die Bundesregierung. Laut des Berichtes vom 15. April hat der Verkehrssektor in Deutschland im Jahr 2024 rund 143 Mio. t CO2-Äquivalent emittiert. Dies stellt einen Rückgang um etwa 1,4 % gegenüber dem Vorjahr dar und entspricht etwa dem Rückgang der Emissionen von 2022 zu 2023. Ursprünglich sollte der Verkehrssektor eine Reduzierung auf 125,2 Mio. t CO2e erzielen. Entsprechend wurde diese Zielmarke um knapp 18 Mio. t CO2e überschritten. Insgesamt ist der Verkehrssektor für 9 % der bundesweiten Emissionen verantwortlich, so der Expertenrat. Dabei sei ein Großteil des Rückgangs auf den Bereich schwerer Fahrzeuge wie LKW und Busse zurückzuführen. Die Emissionen des privaten Personenverkehrs sind konstant geblieben. Der geringe Emissionsrückgang ist laut Expertenrat auf die mangelnde strukturelle Entwicklung im Verkehrssektor sowie der anhaltenden Dominanz fossiler Antriebsarten zurückzuführen. Außerdem soll die Verkehrsleistung von PKW zugenommen haben. Die daraus resultierenden Mehremissionen seien jedoch aufgrund des im Vergleich zum Vorjahr höheren Bestand an batterieelektrischen Fahrzeugen ein Stück weit ausgeglichen worden. Auch das geringe Wirtschaftswachstum hat zum Emissionsrückgang beigetragen. Die neue Bundesregierung hat im Koalitionsvertrag bestätigt, am Anstieg der THG-Quote festzuhalten. Dies soll Inverkehrbringer von Kraftstoffen dazu anregen, mehr emissionsärmere Kraftstoffe anstelle von fossilen in Verkehr zu bringen. Der Branchenverband Uniti begrüßt dieses Vorhaben zwar, mahnt jedoch an, dass diese Maßnahmen nicht ausreichen würden, um den Markthochlauf der erneuerbaren und alternativen Kraftstoffen voranzutreiben. Der Verband fordert die Regierung auf, sich auf europäischer Ebene für eine Anpassung der CO2-Flottenregulierung einsetzen. Diese berücksichtigt bei der Ermittlung der Emissionen nicht etwaige Einsparungen bei der Produktion des Kraftstoffes, sondern nur die tatsächlichen Emissionen im Betrieb. Von Max Steinhau Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2025. Argus Media group . Alle Rechte vorbehalten.

France consults on expanded biofuels mandate

15/05/25

France consults on expanded biofuels mandate

London, 15 May (Argus) — France has opened consultation on the transposition of part of the recast renewable energy directive (RED III) into national law, which would replace the current system with a new one called "incentive for the reduction of the carbon intensity of fuels" (IRICC). The proposal introduces two separate sets of requirements for transport fuels. The first is for greenhouse gas (GHG) emissions reductions, broken down by transport sectors — road, aviation, maritime, LPG and natural gas for vehicles, which could be CNG or LNG (see table). In the current draft, the GHG reduction target for the road sector will start at 5.9pc in 2026, rising to 10.6pc in 2030 and 18.7pc in 2035. For aviation, the target starts at 2.5pc in 2026, rising to 5.8pc in 2030 and 18.8pc in 2035. The GHG mandate levels include a gradual phasing-in of new fuel sectors – river and maritime fuels, fuel gasses, and aviation. To meet the overall RED III target of 14.5pc emissions reduction by 2030, the national French target includes the biofuels mandates, a share for rail transport, and a share or private vehicle charging. The second set of requirements is a renewable fuel requirement by energy content, which is broken down by fuel type — diesel, gasoline, LPG and natural gas fuels and marine fuel (see table). The blending requirements for diesel start at 9pc in 2026, rising to 11.4pc in 2030 and 16pc in 2035. For gasoline, the mandates start at 9.5pc in 2026, rising to 10.5pc in 2030 and 14.5pc in 2035. Finally, the proposal includes a set of sub-mandates for advanced fuels and renewable hydrogen . The advanced biofuels mandate would start at 0.7pc in 2026, rising to 1.95pc in 2030 and 2.6pc in 2035. Users of renewable fuels of non-biological origin (RFNBOs) would not be subject to the advanced sub-mandate. In feedstock restrictions, the crop cap will rise to 7pc from 6.2pc in 2030 and 2035, while the limit for fuels made from feedstocks found in Annex IX-B of RED will be at 0.6pc in 2026, 0.7pc in 2030 and 1pc in 2035 for diesel and petrol. Aviation fuel will not have a IX-B cap until 2030, and from then it will be 6pc. Mandate compliance would be managed by a certificate system through the CarbuRe registry, with a compliance deadline of 1 March the following year. Public electric vehicle charging would also generate tickets, although the amount of tickets generated by charging light passenger vehicles would be reduced from 2031 to reach 50pc in 2035. Renewable hydrogen used in transport would also generate tickets counting towards the hydrogen sub-quota and reduce the overall GHG savings requirement. Public charging stations will start generating fewer tickets for electric passenger vehicles from 2031 to 50pc by 2035. France is also considering steep penalties for non-compliance, at €700/t CO2 not avoided for the GHG reduction requirement and at €40/GJ for the fuel targets. The penalty for not meeting hydrogen and advanced fuel sub-targets would be doubled, at €80/GJ. The consultation is open for comments until 10 June. By Simone Burgin Proposed GHG reduction by transport sector % 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Road and non-road diesel 5.9 7.1 8.3 9.5 10.6 13.2 14.8 16.2 17.5 18.7 Aviation 2.5 3.3 4.1 4.9 5.8 8.4 10.8 13.3 15.9 18.7 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 2.0 2.0 2.0 5.0 Maritime 2.5 3.25 4.0 5.0 6.0 7.0 8.0 10.0 12.0 14.5 RFNBO sub-target (% en.) 0.0 0.0 0.0 0.0 1.2 1.2 1.2 1.2 2.0 2.0 LPG and natural gas fuels 0.0 0.0 2.7 6.3 10.6 13.2 14.8 16.2 17.5 18.7 DGEC Proposed energy content mandate by fuel type % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Diesel 9.0 9.5 10.1 10.7 11.4 12.2 13.0 13.8 14.9 16.0 Petrol 9.5 9.7 10.0 10.2 10.5 11.1 11.8 12.6 13.4 14.5 Natural gas fuels 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 LPG 0.0 0.0 3.0 7.0 12.0 15.0 16.0 18.0 19.0 21.0 Marine fuel 2.9 3.8 4.7 5.9 7.1 8.2 9.4 11.8 14.1 17.1 DGEC Proposed caps and sub-targets % (en.) 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Feedstock caps Crop feedstocks 6.2 6.4 6.6 6.8 7.0 7.0 7.0 7.0 7.0 7.0 Annex IX-B feedstocks* 0.6 0.6 0.65 0.7 0.7 0.75 0.8 0.85 0.9 1.0 Cat. 3 tallow 0.5 0.6 0.6 0.6 0.6 0.6 0.7 0.7 0.7 0.7 Tall oil 0.1 0.1 0.1 0.1 0.15 0.15 0.15 0.15 0.15 0.2 Fuel sub-targets Advanced feedstocks 0.7 0.95 1.25 1.6 1.95 2.0 2.1 2.25 2.4 2.6 RFNBOs/Renewable hydrogen 0.05 0.2 0.5 1.0 1.5 1.6 1.7 1.8 1.9 2.0 *For diesel and petrol Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK ethanol sector sees lower prices from US trade deal

14/05/25

UK ethanol sector sees lower prices from US trade deal

London, 14 May (Argus) — The UK ethanol sector expects prices to fall because of the recent trade deal with the US, but participants are divided on the scale of the effect. The trade deal has cut import duties on US ethanol to zero on higher volumes than recent import levels, raising the prospect of large amounts of US product crossing the Atlantic. The UK was the second largest destination for US ethanol exports in 2024, taking more than 923mn l, or 13pc of all exports, according to US industry group Renewable Fuels Association. The UK imposed a duty of £16/hectolitre ($21/hectolitre) for undenatured ethanol and £8.50/hectolitre for denatured ethanol, which the trade deal will remove. Zero tariffs will be applied to up to 1.4bn l/yr. European renewable ethanol association ePure told Argus the deal presents a "huge problem" for UK and EU ethanol producers, a view echoed by some UK market participants. But some active in the UK ethanol market have said that while they do not expect greater amounts of ethanol to arrive in the country, they do anticipate lower prices and lower domestic production. The operators of the UK's two major ethanol-producing facilities, Vivergo and Cropenergies, said there will be zero tariffs on "the size of the UK's whole ethanol market", and said they may have to close. According to Argus data the total UK production capacity for wheat-based ethanol is over 736mn l/yr. The National Farmers' Union expressed concern about the deal's effect on arable farmers, and said it is "working through what this means for the viability of the domestic bioethanol production." Although a healthy share of the total import pool from the US is waste-based, the UK government is consulting on whether to continue classing the main waste feedstock imported from the US as eligible for double counting under its renewable transport fuel obligation (RTFO). Staging post UK producers may still seek to maximise imports from the US for onward export into the EU. The current EU-UK Trade and Cooperation Agreement (TCA) allows for zero tariffs and quotas on all trade of UK and EU goods that comply with appropriate rules or origin. But with this new deal, there is an increased chance of US ethanol entering the EU via the UK, Epure said. "Under existing customs rules US ethanol can be mixed with UK ethanol and thus avoid an EU duty," it said. This may include major proportion, which limits the share of non-originating materials to claim UK origin, or inward processing relief, which allows for imports to be processed without paying import duties or value added tax (VAT) before re-export. Some market participants contested the extent to which UK-EU flows of ethanol with partial US origin might happen, suggesting the imported ethanol would need to undergo a significant chemical change to be classified as duty free, such as being used as feedstock for products including ethyl tert-butyl ether (ETBE). EPure said the EU should be wary, and called for ethanol to be included in a final list of products subject to EU countermeasures, as it was in a recent proposal from the bloc currently under public consultation. By Toby Shay Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

MUFG to invest $30mn in Japanese biofuels firm Euglena

14/05/25

MUFG to invest $30mn in Japanese biofuels firm Euglena

Singapore, 14 May (Argus) — Japanese bank MUFG has agreed to purchase up to $30mn of shares in Japanese biofuels developer Euglena, which will allow Euglena to increase its share in a joint venture to build a biorefinery in Malaysia. Euglena will issue the shares in stages via their overseas special purpose company Euglena Sustainable Investment (Esil). Esil currently owns a 5pc equity of the joint venture and plans to increase its share up to the maximum of 15pc with the new funding. The other partners are Eni's biofuels unit Enilive and Malaysian state-owned refiner Petronas' Petronas Mobility Lestari. The biorefinery started construction in the fourth quarter of 2024, and is scheduled to start operations in the latter half of 2028. It will have the capacity to process about 650,000 t/yr of raw materials, such as used vegetable oils, animal fats, waste from the processing of vegetable oils and other biomass including microalgae oils, to produce up to 725 kilolitres/yr of SAF, hydrogenated vegetable oil (HVO) and bio-naphtha. The biofuel developer, whose initial business was the cultivation of the microalgae Euglena for food, had previously also announced that it will put more emphasis on UCO procurement and SAF supply to domestic consumers. Euglena aims to achieve a production capacity of 100,000 t/yr of microalgae-based oil by the 2030s, and is currently working with Petronas' subsidiary Petronas Research in a joint study to establish technology for large-scale microalgae production. But microalgae has so far faced challenges in commercialising as a biofuels feedstock, including high production costs, difficulty scaling up and low lipid yields. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ampol imports Australia's largest SAF cargo into Sydney

14/05/25

Ampol imports Australia's largest SAF cargo into Sydney

Sydney, 14 May (Argus) — Australian fuel retailer and refiner Ampol imported a cargo of nearly 2mn litres (700t) of sustainable aviation fuel (SAF) into Sydney Airport on 7 May, marking the largest ever commercial SAF import into Australia. The fuel — sourced from Malaysia — was imported into Ampol's Kurnell facility near Sydney Airport, where the former's oil refinery has direct pipeline access into the airports refuelling the supply chain. There are no plans to import more SAF cargoes into Sydney Airport in the near term, a source close to the matter said. Ampol's managing director and chief executive officer, Matthew Halliday, said "this delivery marks Ampol's first major import of SAF into Australia and leverages our advanced supply chain infrastructure to deliver this product directly from a key domestic fuel terminal to the nation's busiest airport." Sydney Airport accounts for nearly 40pc of Australia's total jet fuel consumption, according to the airport's chief executive officer Scott Charlton. The announcement came a day after Ampol said it is shifting its focus to electric vehicle charging and renewable fuels , by selling its electricity retail businesses in Australia and New Zealand. Australian airline Qantas is the end user of the imported SAF cargo.The fuel, once blended at a ratio of approximately 18pc, could power the equivalent of 900 flights from Sydney to Auckland on Qantas 737 aircraft, Qantas said. This will cut resulting carbon emissions from those flights by a total estimated 3,400t, it added. Qantas is targeting 10pc of its fuel use to come from SAF by 2030 and approximately 60pc by 2050. Qantas' chief executive officer Vanessa Hudson said "the creation of a SAF industry is key to our efforts towards the decarbonisation of aviation, increasing Australia's fuel security and creating thousands of new jobs across our economy … we pick up 70pc of our fuel in Australia so we're looking forward to working closely with the government to chart the next course for SAF in Australia." This import of SAF follows the signing of an initial agreement between Qantas and Sydney Airport to work together to further facilitate the development of a domestic SAF industry in Australia. If established, domestic SAF production has the potential to contribute approximately A$13bn/yr ($8.4bn/yr) in gross domestic product by 2040, while supporting nearly 13,000 jobs in the feedstock supply chain and creating 5,000 new jobs to build and run the facilities, according to a Qantas and Airbus ICF report published in 2023. Consultations on a potential biofuels mandate in New South Wales (NSW) are expected to begin in the near future. NSW minister for climate change, energy and environment, Penny Sharpe, said "we want to see a strong domestic SAF industry here in NSW, which is a win-win for jobs, fuel security and the planet". By Tom Woodlock Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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