World News
European Biofuel Bunker Demand to Retain Momentum Despite IMO Delay: CSC Commodities
Demand for biofuel bunker demand in Europe is likely to continue growing because of regional regulations despite last week's delay by the IMO, according to CSC Commodities.
An extraordinary session of the IMO's Marine Environment Protection Committee (MEPC) unexpectedly voted to push back its NZF plans by a year on Friday after significant opposition to its adoption emerged, led by the US.
The deal would have set progressively tougher carbon intensity requirements for marine fuels for the years 2028-2035 and beyond.
But while this delay will bring short-term uncertainty, Europe is likely to continue delivering growth to global biofuel demand, Bastien Declercq, CEO of Marex division CSC Commodities, told Ship & Bunker on Tuesday.
"The IMO's decision on Friday to postpone the vote on its global carbon levy on shipping is likely to bring uncertainty to European biofuels markets," Declercq said.
"Shippers had started planning their biofuel procurement strategies, and producers were counting on an increased demand – they will need to reassess their plans.
"But despite the deal falling through for now, shippers are unlikely to abandon their exposure to biofuels.
"The EU's FuelEU Maritime is still operational, and EU member states have long-term biofuel blending mandates in place.
"This favourable European regulation means the market will likely remain resilient."
Rotterdam, Europe's largest bunkering location, saw 198,515 mt of biofuel bunker sales in the third quarter of this year, up by 44.7% from the same period a year earlier. But its total sales so far this year have been 467,772 mt, down by 26.2% on the year.
"Since April of this year, European biofuel demand has sharply risen, mainly driven by FuelEU Maritime," Declercq said.
"Supply for biomethane is still limited, so this higher demand has led to prices significantly increasing.
"Shippers and other biofuel buyers can still consider doubling down on their biomethane procurement strategies.
"If shippers hesitate and abandon their exposure to biofuels and biogas, they will likely face supply bottlenecks and higher prices in the future."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 440.00 | 3.00 | 657.00 | 0.50 |
| Rotterdam | 423.50 | 0.50 | 636.50 | 3.00 |
| Houston | 436.00 | 5.00 | 630.50 | 1.00 |
| Fujairah | 436.50 | 0.50 | 719.50 | 1.00 |
| Global 20 Ports Average | 482.50 | 0.50 | 733.00 | 0.00 |
| Global 4 Ports Average | 434.00 | 0.00 | 661.00 | 0.50 |
| Global Average Bunker Price | 528.50 | 0.50 | 773.50 | 0.50 |
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