EMEA News
Tackle Trad vs Alt Bunker Fuel Differential 'Sooner not Later', Say ING Economists
Dutch poltical uncertainty could derail plans to reform the country's bunker sector, according to Dutch bank ING.
In an opinion piece posted on the bank's website, two ING economists argue that the sector needs reform sooner rather than later.
The progress of a national energy plan (NPE) -- final version is slated to be agreed by the end of this year -- has fallen foul of Dutch political machinations.
Aviation and marine fuel represent around a quarter of total greenhouse gas emissions in the Netherlands but fall outside the scope of national targets.
The solution, argue the economists, is to push for greener, synthetic fuels only there is one major drawback, price. Synthetic fuels, such as methanol and ammonia, are between five to 10 times more expensive than their oil-derived counterparts. For synthetic fuels to thrive, the price differential must be addressed. But in the political hiatus, the NPE has been shunted into the sidings.
"The House of Representatives will decide in September whether or not the caretaker cabinet completes the final version of the NPE or whether this will be left to a new cabinet," the economists wrote.
"Given the long investment cycles in bunker fuel facilities and their transition pathways, it should come sooner rather than later," they concluded.
A way of reflecting the carbon cost in traditional bunker fuel is being considered by the International Maritime Organisation under its mid-term economic measures that will be used to achieve GHG reduction goals for shipping agreed at MEPC80 in July. Such measures require agreement and would be subject to an impact assessment study before they can enter into force.
