INTERVIEW: Glander Warns Asian Bunker Buyers to Take Urgent Action on EU Regulations

Eugene Xiao is sales manager for Glander International Bunkering in Singapore. Image Credit: Glander International Bunkering

Global marine fuels firm Glander International Bunkering advises its small and medium-sized Asian customers not to fall into complacency on compliance with upcoming EU regulations on maritime emissions.

The firm has noted a degree of hesitancy among its Asian customers about compliance with the EU-ETS and FuelEU Maritime regulations, Eugene Xiao, sales manager for Glander International Bunkering in Singapore, said in an interview with Ship & Bunker.

Glander International Bunkering has already made significant strides into decarbonisation services for shipping, with involvement in 11,000 mt of biofuel blend deals so far, 8,000 mt of LNG bunker supply and more than 50,000 EUA sales. The firm also has a strategic partner on methanol supply in Singapore, currently producing only grey methanol but able to supply green methanol on a mass-balanced basis if demand emerges.

Looming Deadlines

The Asian market needs to start looking at compliance with EU regulations in more detail to avoid heavy costs down the line, according to Xiao.

"In addition, the IMO targets for 2030 and 2050 are not that far away, if you look at it in the large-scale point of view, if you're doing large-scale strategic planning for big companies," he said.

"Dialogue is not enough, you need to take action.

"If you don't, you need at least to know the consequences."

For EU-ETS compliance -- for which the first deadline for submitting allowances certificates covering ships' emissions comes in September of next year -- those consequences could include fines, bans from EU ports and reputational risk from being publicly named as being non-compliant.

Parts of the Asian market are not fully informed about the European regulations, and other parts are waiting to formulate a strategy, Xiao said.

"They know, but they don't know 100% of it," he said.

"If you mention EU-ETS, they might not know what it comprises of, what the penalties are for non-compliance.

"They're playing the waiting game, which is a common sight.

"We have tried our best to speak to our Asian clients about it as much as we can.

"To be honest, there are common replies such as, 'We know, but we want to wait and see
what the big boys do.'

"But what they don't know is, the big boys are already doing it."

Biofuel Supply Under Pressure

The FuelEU Maritime regulation -- mandating steadily reducing carbon intensity of energy used by ships visiting European ports -- comes into force in January of next year, and biofuel demand is likely to rise as a result.

In the short term, that increased demand should be manageable, Xiao said.

"If we are talking about the next five years, I think it will still be enough, because it's not going to be a sudden jump," he said.

"And I think Singapore has always been the leader in technology, in producing things.

"We definitely have the forecast of maintaining and keeping the market well-stocked; it should be sufficient."

But over the longer term, as shipping competes for biofuels with other industries, buyers will face much higher costs if they haven't locked in lower prices in advance.

"I want to push that urgency to Asian market players," Xiao said.

"Right now it seems that we have enough for everyone, but when the time comes near to the target years, I think we will find ourselves with a bottleneck where there's a lack of feedstock.

"Because who will maritime be competing with -- other industries, land transport, for example.

"When that time comes, they're going to pay a premium; if you think it's going to cost you now, it's going to cost you more if you don't do something about it.

"Besides the penalty for non-compliance is very significant, representing EUR 2,400 per tonne of VLSFO energy equivalent.

"They need to be well-positioned early, and they need people who are well-versed to be able to help them navigate and execute their journey.

"Glander International Bunkering has established an international New Fuels team to deliver effective solutions to our customers.

"With extensive knowledge and experience, our team has garnered positive testimonials from satisfied clients, demonstrating long-term benefits aligned with emission policies."