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Cepsa Sees Room for Optimism on Biofuel Availability for FuelEU Maritime Compliance
There are grounds for optimism on more biofuels becoming available to drive the shipping industry's decarbonisation as the FuelEU Maritime regulation comes into force, according to Spanish energy producer Cepsa.
Samir Fernandez, director of Cepsa Marine Fuel Solutions, discussed the approaching FuelEU Maritime regulation in a webinar last week.
"As far as biofuels are concerned, I think the amount of bio feedstock available in Europe is relatively limited, but there is a lot more feedstock capability in Asia and there has already been a huge shift in terms of how we look at bio feedstocks moving from Asia into Europe in order to fulfil the requirements for FuelEU Maritime," Fernandez said.
"It is absolutely right to say that biofuels are in its current form, and based on current feedstock availability is not enough to fulfil the 2050 emissions, but the important point here is to look at the step-by-step approach."
The regulation comes into effect from January 2025, seeking to reduce the carbon intensity of European shipping by mandating a percentage of companies' marine energy use that must come from sustainable sources.
Fernandez argued the number of ships still being ordered only capable of running on conventional fuels would be a strong incentive for more biofuels to be made available.
"If we were to assume that the current new order book is somewhere in the region of 33 million mt [of annual fuel oil demand], 50% of that consumption is still on fossil fuel," he said.
"It's 50% of these vessels that are on the current order book that are going to come out onto the water and in 2025, 2026 and 2027 will require some form of abatement in order to fulfil FuelEU Maritime requirements.
"The only answer for those customers would end up being biofuels; otherwise it would require some very, very expensive conversion or retrofitting of the engine in order to comply with it.
"We have been discussing about the availability of second gen biofuels, but the requirements of things like FuelEU Maritime -- as well as the penalties -- will allow for the development of third generation biofuels.
"So there is a there is a lot of support in the development of biofuels from now until maybe 2040, when e-fuels will be widely more widely available for compliance, and that allows biofuels a very interesting pathway into decarbonisation."
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 630.50 | 3.00 | 770.50 | 5.50 |
| Rotterdam | 577.50 | 4.50 | 772.00 | 4.00 |
| Houston | 609.50 | 3.50 | 788.00 | 11.50 |
| Fujairah | 632.50 | 6.50 | 864.00 | 5.00 |
| Global 20 Ports Average | 638.00 | 0.50 | 849.00 | 4.50 |
| Global 4 Ports Average | 612.50 | 4.50 | 798.50 | 6.50 |
| Global Average Bunker Price | 678.50 | 3.00 | 904.50 | 3.50 |
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