Petrobras to test HVO production
Brazil's state-controlled Petrobras will begin pilot production of hydrotreated vegetable oil (HVO) in July while awaiting a regulatory decision that could reshape the country's pioneering biodiesel industry.
HVO is produced by treating vegetable oil with hydrogen. Petrobras said it will utilize its patented HVO technology at its 208,000 b/d Repar refinery in Parana state.
Petrobras downstream director Anelise Lara said the economic viability of its renewable diesel technology will depend on hydrocarbon regulator ANP's recognition that it meets current biodiesel standards.
Brazil produces most of its biodiesel from soybeans.
Other HVO projects are also moving forward in the region. Last year, Brazilian biodiesel investor ECB Group announced an $800mn investment in HVO in neighboring Paraguay.
ECB, which is controlled by Brazilian businessman Erasmo Battistella, will develop a 16,500 b/d plant dubbed Omega Green to produce HVO. Battistella is co-owner with Petrobras of BSBios, one of Brazil's largest biodiesel producers.
The traditional biodiesel industry is also investing in expanding its capacity as the country's mandated biodiesel blend rises to 15pc by March 2023, from a current 12pc.
HVO has made significant inroads in the EU.
Spain produced 425,000t of domestic HVO in 2019, up from 375,000t in 2018, according to markets regulator CNMC. Repsol is proposing to build a 200,000-250,000 t/yr HVO plant at the Spanish port of Cartagena. The company is targeting HVO production of 600,000 t/yr in 2030.
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US southbound barge demand falls off earlier than usual
US southbound barge demand falls off earlier than usual
Houston, 1 May (Argus) — Southbound barge rates in the US have fallen on unseasonably low demand because of increased competition in the international grain market. Rates for voyages down river have deteriorated to "unsustainable" levels, said American Commercial Barge Line. Southbound rates declined in April to an average tariff of 284pc across all rivers this April, according to the US Department of Agriculture (USDA), which is below breakeven levels for many barge carriers. Rates typically do not fall below a 300pc tariff until May or June. Southbound freight values for May are expected to hold steady or move lower, said sources this week. Southbound activity has increased recently because of the low rates, but not enough to push prices up. The US has already sold 84pc of its forecast corn exports and 89pc of forecast soybean exports with only five months left until the end of the corn and soybean marketing year, according to the USDA. US corn and soybean prices have come down since the beginning of the year in order to stay competitive with other origins. The USDA lowered its forecast for US soybean exports by 545,000t in its April report as soybeans from Brazil and Argentina were more competitively priced. US farmers are holding onto more of their harvest from last year because of low crop prices, curbing exports. Prompt CBOT corn futures averaged $435/bushel in April, down 34pc from April 2023. Weak southbound demand could last until fall when the US enters harvest season and exports ramp up southbound barge demand. Major agriculture-producing countries such as Argentina and Brazil are expected to export their grain harvest before the US. Brazil has finished planting corn on time . unlike last year. The US may face less competition from Brazil in the fall as a result. Carriers are tying up barges earlier than usual to avoid losses on southbound barge voyages. Carriers that have already parked their barges will take their time re-entering the market unless tariffs become profitable again. The carriers who remain on the river will gain more southbound market share and possibly more northbound spot interest. By Meghan Yoyotte and Eduardo Gonzalez Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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.
Derailment may interrupt SoCal renewable diesel
Derailment may interrupt SoCal renewable diesel
Houston, 1 May (Argus) — A Union Pacific train derailment in Colton, California, this week could curtail rail-delivered renewable diesel (RD) availability near Los Angeles. Up to three train cars derailed on the morning of 30 April in the Union Pacific West Colton rail yard, about 65 miles east of Los Angeles, Union Pacific said Wednesday. The cars remained upright during the incident, and cleanup was ongoing as of Wednesday morning. Renewable diesel market participants said the terminal — a hub for the product — was sold out pending the restart of deliveries, although there was no immediate price reaction in the R99 spot market. Spot differentials for rail delivered R99 in Los Angeles have ranged from 20-30¢/USG above Nymex ULSD this week. Renewable diesel deliveries by rail into PADD 5 were down in the first two months of 2024, according to Energy Information Administration data. Rail volumes totaled around 1.19mn bl in February, the lowest monthly total since May 2023 and a 10pc monthly decline after deliveries from the Midwest more than halved from January. By Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Treasury updates SAF tax credit guidelines
US Treasury updates SAF tax credit guidelines
Houston, 30 April (Argus) — The US Treasury Department released long-awaited guidance on tax credit eligibility for ethanol-derived sustainable aviation fuel (SAF) Tuesday, incorporating so-called climate-smart agricultural (CSA) practices. As part of the new guidance, the agencies comprising the SAF Interagency Working Group (IWG) are jointly releasing the 40B SAF-GREET 2024 model, which provides another methodology for SAF producers to determine lifecycle greenhouse gas (GHG) emissions rates of their production for the credit. It also incorporates a pilot program to encourage the usage of CSA practices for SAF feedstocks. In collaboration with the US Department of Agriculture (USDA), the major changes include further guidance on farming practices, including no-till farming, planting cover crops and enhanced efficiency fertilizer. The $1.25/USG 40B SAF credit applies to a qualified fuel mixture containing SAF for certain sales or uses after 31 December 2022, and before 1 January 2025. To qualify for the credit, the SAF must have a minimum lifecycle greenhouse gas emissions reduction of 50pc compared with petroleum-based jet fuel. Additionally, there is a supplemental credit of one cent for each percent that the reduction exceeds 50pc, for a maximum credit of $1.75/USG. The modified version of the Greenhouse gases, Regulated Emissions, and Energy use in Technologies (GREET) also incorporates new data, including updated modeling of key feedstocks and processes used in aviation fuel and indirect emissions. The modified GREET model also integrates key GHG emission reduction strategies, such as carbon capture and storage, renewable natural gas, and renewable electricity. The notice provides a safe harbor for use of the USDA Climate Smart Agriculture Pilot Program to further cut the emissions reduction percentage calculated for domestic soybean and domestic corn feedstocks and for certifying the related requirements. For corn ethanol-to-jet, the pilot provides a greenhouse gas reduction credit if a "bundle" of certain CSA practices — no-till farming, cover crop planting, and enhanced efficiency fertilizer — are used. It would also allow a greenhouse gas reduction credit for soybean-to-jet production if the soybean feedstock is produced using similar CSA practices. This is a pilot program specific to the 40B credit under the Inflation Reduction Act (IRA), which is in effect for 2023 and 2024. A new 45Z-GREET will be developed for use with the 45Z tax credit, which starts on 1 Jan 2025. Given the similar language between section 40B and section 45Z of the IRA regarding methods for determining lifecycle greenhouse gas emissions reduction percentages, it is expected that the positions taken by Treasury and the IRS related to the section 40B credit will be similar for the new clean fuel producer credit under section 45Z. Industry reaction mixed Renewable fuels groups welcome the updated pathway for ethanol-to-jet, but the groups expressed concern over the scope of the guidance. "We are encouraged that, for the first time ever, this carbon scoring framework will recognize and credit certain climate-smart agricultural practices," Renewable Fuels Association president and chief executive Geoff Cooper said. "However, RFA believes less prescription on ag practices, more flexibility, and additional low-carbon technologies and practices should be added to the modeling framework to better reflect the innovation occurring throughout the supply chain." Kailee Buller, chief executive of the National Oilseed Processors Association, also said the new guidance has shortcomings. "We are concerned the requirement to implement climate-smart ag practices simultaneously will limit this opportunity, particularly in parts of the country where it may not be possible to plant a cover crop or the cost to implement new practices is too steep," Buller said. Both groups said they would continue to work with the Biden administration to further opportunities for SAF development. By Matthew Cope and Payne Williams Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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