EU emissions plan to make ARA bunkers more competitive

EU proposals to include marine fuel CO2 emissions in its Emissions Trading Scheme (ETS) and cut marine fuel greenhouse gas (GHG) intensity in EU waters may prompt ship owners in the EU to use more alternative marine fuels, making traditional fuels more price competitive.

EU is proposing that ships in EU waters reduce their GHG intensity by 2pc by 2025 and surrender allowances for 20pc of emissions to its ETS by 2023. Amsterdam-Rotterdam-Antwerp (ARA) bunker suppliers will continue to offer conventional marine fuels for sale for use in international waters, but there would likely be a surplus which could dampen prices there compared with other international bunker ports, namely Singapore, Fujairah, Houston and Panama.

ARA's fuel oil and gasoil prices will eventually correct themselves, as the fuel oil and gasoil are absorbed by utilities, industrial power plants, as road fuel or by refiners reducing their utilization rates.

In 2020, Rotterdam and Antwerp sold 12.5mn t of conventional marine fuel. Of this quantity, marine gasoil accounted for 20pc or 2.5mn t, very low-sulphur fuel oil (VLSFO) for 54pc, and high-sulphur fuel oil for 26pc. There are no statistics available for Amsterdam. Argus assessed ARA VLSFO at $23/t average discount to Singapore for the period 1-22 July.

By Stefka Wechsler