It has been all about biofuel bunkering in the world's largest bunkering hub of Singapore in 2022, with the fuel's rapid uptake widely expected to continue in 2023.
Back in October senior minister of state for transport Chee Hong Tat said at the Singapore International Bunkering Conference and Exhibition (Sibcon) that the city-state has supplied about 70,000t of biofuels to ocean-going vessels across more than 40 biofuel bunkering operations so far in 2022.
To put this in perspective, biofuel bunkering sales had already outpaced total LNG bunker consumption of 50,000t in 2021, the most mature alternative bunker fuel of choice.
In Singapore, a maximum of 24pc of biofuels is allowed in a bunker blend, which is also called B24. The remaining 76pc is made up of very-low sulphur fuel oil. It remains to be seen whether this share in the blend can and will increase, as is already the case in Europe and North America.
Vitol and Chevron are the two leading suppliers of B24 at the port of Singapore, with Vitol alone accounting for about half of the quantities sold.
Large international shipping companies such as NYK, Oldendorff, CMA CGM, K-Line and Cosco, among others, started trialling B24 onboard their vessels for ocean-going journeys in 2022 without any complications.
Biofuels are a popular choice for shippers looking to decarbonise their fleet in order to meet the International Maritime Organization's goal to reduce greenhouse gas emissions from shipping.
This is because biofuel blends are a plug-and-play solution that is widely available and do not need engine modifications.
Singapore's Maritime and Port Authority in October 2022 developed a provisional national quality standard for marine biofuels, as well as a framework laying down conditions for biofuel supply for licensed bunker fuel suppliers, to boost the pick-up of biofuels bunkering.
A supporting regulatory framework like this will further stimulate marine biofuel consumption in Singapore, as the industry awaits a global ISO standard.
Multi-fuel future
Market participants expect that biofuel bunkering will transition from mainly trials and pilot studies to actual market pick-up and maturation in 2023.
Already some B24 spot trading is taking place, although most of the volumes sold are under long-term contracts as reported to Argus.
Other low- or zero-carbon bunker fuels such as ammonia, methanol and hydrogen are all potential candidates in a multi-fuel future as well. All of these have, similar to biofuels, positive and negative characteristics relative to conventional marine fuels.
The biofuels used in a B24 blend are currently used cooking oil methyl ester (Ucome), but there are questions regarding the sustainability of future biofuel supplies. Hence, it is possible that the growth in biofuels will be capped by the emergence of competition from other fuels. Already, shipping companies and fuel suppliers are working together to incept supply chains for green ammonia and methanol bunkering, as well as hydrogen, in key hubs such as Singapore and South Korea.
For now it looks like biofuels in Singapore are destined to capture an increasing share of the bunkering fuel mix at least in the short to medium term, with 2023 poised to be a critical year for B24.
