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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East-west marine biodiesel spread near six-month low
East-west marine biodiesel spread near six-month low
London, 6 September (Argus) — The east-west marine biodiesel spread narrowed amid firm demand for the B24 blend in Singapore and lacklustre spot marine biodiesel demand in northwest Europe in recent sessions. The east-west marine biodiesel spread — the premium held by B30 used cooking oil methyl ester (Ucome) dob ARA to B24 Ucome dob Singapore — was marked at $47.50/t on 5 September, its narrowest since 19 March. The spread narrowed amid a noted increase in demand from Asian-based shipowners who embark on voyages to Europe ahead of the implementation of FuelEU Maritime regulations in Europe next year — according to market participants. The latter had also reported an increase in B24 demand in Singapore from containerships seeking scope 3 emissions rights that can then be passed on to cargo owners. Scope 3 emissions rights can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Argus assessed B24 dob Singapore prices at an average of $720.70/t on 1 July–5 September this year, compared with $757.70/t on 8 February–28 June following the launch of the B30 Ucome dob ARA price on 8 February. Consequently, the east-west marine biodiesel spread was marked at an average of $95.34/t on 1 July–5 September, compared with $74.57/t on 8 February–28 June. A wider east-west spread would incentivise shipowners to opt for the B24 blend in Singapore rather than ARA, when operationally viable, to meet the voluntary scope 3 demand from their customers. Rising demand in the Singapore bunkering hub was further supplemented by higher sales of marine biodiesel blends at the port. According to official data released by the Maritime and Port Authority of Singapore, sales of marine biodiesel blends in the second quarter of the year were marked at about 161,400t — higher by 34,500t from the previous quarter. This was also higher by 52,600t from the second quarter of last year. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Gold Standard releases two new shipping methodologies
Gold Standard releases two new shipping methodologies
London, 4 September (Argus) — Carbon registry Gold Standard has launched its Methodology for Reducing Methane Emissions from Combustion Engine Exhaust and its Methodology for Marine Fuels and Bio Bunkers, aimed at reducing the environmental impact of shipping operations. The two new methodologies will add to Gold Standard's existing Retrofit Energy Efficiency Measures in Shipping methodology and Methodology for Emission Reduction by Shore-side or Offshore Electricity Supply System. The Methodology for Marine Fuels and Bio Bunkers was developed by biofuels trading firm Alcom, and will serve as a guideline for obtaining carbon credits from the use of marine biodiesel blends. The methodology currently only applies to marine biodiesel blends comprising used cooking oil methyl ester (Ucome), with a scope covering biofuel production to be used within the maritime industry across all sea vessel types and covering the entire chain of emissions on a well-to-wake basis. Only the biofuel component that has been loaded on to the vessel and blended with fossil fuels can be eligible for carbon credits under this methodology. Gold Standard's Methodology for Reducing Methane Emissions from Combustion Engine Exhaust was developed in partnership with consulting group Fremco and technology company Daphne Technology. The methodology aims to reduce methane emissions stemming from maritime and stationary land-based internal combustion engines that utilise natural gas or other methane-rich fuels. It will also mandate real-time measurements before and after the abatement system to ensure "robust monitoring of emission reductions". By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Houston-ARA B30 diff could spark Houston interest
Houston-ARA B30 diff could spark Houston interest
New York, 9 August (Argus) — The Houston to Amsterdam-Rotterdam-Antwerp (ARA) B30 biodiesel for bunkering price differential is narrow enough to generate buying interest in Houston, as environmental regulations tighten in 2025. B30 biodiesel blends, comprised of 30pc cooking oil methyl ester (Ucome) and 70pc very low-sulphur fuel oil (VLSFO), allow ship operators to lower their greenhouse gas (GHG) emissions and thus lower their CO2 expenses. In May and June, Houston B30 was assessed at a $7-$17/t discount to ARA B30 (see chart). In July, the differential flipped to a $22/t premium, as the US Gulf Ucome price gains outpaced northwest Europe's. But provided that the differential remains narrow, US Gulf coast B30 demand from ocean-going vessels could pick up next year, as EU-led GHG regulations tighten, a trader told Argus . EU's emissions trading system (ETS) for marine shipping commenced this year and requires that each ship operator pay for 40pc of the GHG generated on 50pc of each voyage starting or ending in the EU. This applies to vessels travelling between the US and EU. In 2025, the EU ETS emissions limit will increase from 40pc to 70pc, and jump up to 100pc in 2026. Starting next year, the EU's FuelEU Maritime regulation will require a 2pc cut in GHG intensity for bunker fuels compared with 2020 base year levels. FuelEU imposes a penalty of €2,400/t ($2,622/t) VLFSO energy equivalent. Similar to the EU ETS, the FuelEU regulation applies to 50pc of the fuel used on voyages between the US and EU. In addition to tightening EU-led regulations, US biodiesel for bunkering demand could be boosted if the US allows for subsidies for biodiesel sold to ocean-going vessels. Currently, ocean-going ship operators cannot take advantage of the same subsidies that are given to biodiesel blended for use for US road transportation. In February, a bipartisan "Renewable Fuel for Ocean-Going Vessels Act", was introduced in the US Senate, a companion to a prior bill introduced in the US House of Representatives in October 2023 . The bills have not progressed to the Senate or the House. If they pass, Houston B30 biodiesel for bunkering would become more price competitive than ARA B30. By Stefka Wechsler B30 biodiesel (Ucome + VLSFO) $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Marine biodiesel demand slips in Rotterdam 2Q sales
Marine biodiesel demand slips in Rotterdam 2Q sales
London, 30 July (Argus) — Sales of fossil bunker fuels and marine biodiesel blends at the port of Rotterdam inched higher in the second quarter of the year, but were below levels of a year earlier, according to official port data. Marine biodiesel blend sales retracted by about 10.5pc quarter-on-quarter ( see table ). Market participants pointed to muted spot demand as a consequence of limited regulatory incentives and cheaper marine biodiesel prices east of Suez. The premium held by B30 used cooking oil methyl ester (Ucome) dob ARA to B24 Ucome dob Singapore averaged $93.17/t in the April-June period, compared with $40.98/t in the two months prior to April. But blend sales were 26.5pc above April-June 2023, with stable voluntary demand from cargo owners seeking scope 3 emissions rights and shipowners conducting trials ahead of the introduction of FuelEU Maritime regulations next year. High-sulphur fuel oil (HSFO) sales rose slightly on the quarter and fell from the second quarter of last year. Chronic traffic disruption in the Red Sea has continued to redirect vessels on a longer journey around the Cape of Good Hope. Market participants told Argus this has lent support to HSFO demand in Rotterdam, with the high-sulphur product a lucrative option for scrubber-fitted vessels embarking on the east-west route. Sales of very-low sulphur fuel oil (VLSFO) and ultra-low sulphur fuel oil (ULSFO) rose by 7pc compared with the first three months of the year, but tumbled from the second quarter of 2023. Market participants reported limited VLSFO demand and steady production during the quarter. Combined sales for marine gasoil (MGO) and marine diesel oil (MDO) fell on the quarter and on the year in April-June with mostly lacklustre demand. LNG bunker fuel sales continued to rise, further complimented by 2,200m³ of bio-LNG sold, the highest since official records for bio-LNG sales began. By Hussein Al-Khalisy Rotterdam bunker sales t Fuel 2Q24 1Q24 2Q23 q-o-q% y-o-y% VLSFO & ULSFO 917,253 857,579 1,127,145 7 -18.6 HSFO 825,125 818,028 847,189 0.9 -2.6 MGO & MDO 369,267 383,409 404,872 -3.7 -8.8 Biofuel blends 235,043 262,634 185,824 -10.5 26.5 Total 2,346,688 2,321,650 2,565,030 1.1 -8.5 LNG (m³) 148,932 131,960 110,231 12.9 35.1 bio-LNG (m³) 2,200 0 0 - - Port of Rotterdam 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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