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Hapag-Lloyd Sets Out Challenges of Biofuel Bunker Procurement
An executive of container line Hapag-Lloyd has set out the challenges the shipping industry faces in seeking to procure biofuel bunker blends at a scale sufficient to help it decarbonise.
Ilyas Muhammad, head of green fuels at Hapag-Lloyd, discussed the availability of biofuels and other alternative fuels in a recent podcast hosted by the Port of Rotterdam.
"Of course there is a limitation of biofuel availability, if you look at the overall numbers," Muhammad said.
"Only 9 million mt/year of biodiesel production is there which can process used cooking oil or animal fats as feedstock.
"Out of that 9 million mt/year, we have only 460,000 mt/year of bottoms of that product, which is FAME residue, which the maritime sector can consume while not competing with road transport or other sectors.
"It's a tiny quantity -- if you look at the overall consumption of the maritime sector, it's 320 million mt/year, so there's a big, big gap.
"That's why it's very challenging to scale up biofuels; there is no production capacity there, and secondly the feedstock is also not there."
Hapag-Lloyd consumed about 213,000 mt of biofuel blends last year, up from 120,500 mt the previous year.
The firm consumed a total of 3.97 million mt of bunker fuels in 2023, down by 4.1% on the year.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 624.50 | 1.00 | 732.00 | 8.50 |
| Rotterdam | 571.00 | 3.00 | 758.00 | 16.50 |
| Houston | 591.50 | 4.00 | 760.00 | 5.50 |
| Fujairah | 629.00 | 0.50 | 877.50 | 3.00 |
| Global 20 Ports Average | 637.00 | 0.00 | 819.00 | 3.00 |
| Global 4 Ports Average | 604.00 | 0.00 | 782.00 | 5.50 |
| Global Average Bunker Price | 688.00 | 2.50 | 879.00 | 1.00 |
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