INTERVIEW: BunkerTrace Seeks to Track Majority of Biofuel Bunker Market

Deanna MacDonald is co-founder and CEO of BunkerTrace. Image Credit: BunkerTrace

Fuel tracing technology company BunkerTrace is seeking to expand its services to cover a majority of the biofuels used in the bunker market.

The firm is working with several oil majors on tracing biofuel bunker supply, as well as with Cargill and other large companies on conventional marine fuels, Deanna MacDonald, CEO of BunkerTrace, said in an interview with Ship & Bunker earlier this month.

The company is also part of the Global Centre for Maritime Decarbonisation project announced earlier this year to set up biofuel blend trials for 12 vessels across multiple continents over a 12-18-month period.

BunkerTrace adds synthetic DNA tags to fuels at various stages of the supply chain, giving buyers and sellers more visibility over the provenance of the oil they are trading in.

"An increased amount of demand has been coming from the tracing of green fuels, and biofuels in particular at the moment," MacDonald said.

"We have seen a massive increase in the take-up of our technology.

"We've known for a while that it's going to be a key pillar to the assurance of bunker fuels, and we've always thought that the demand would come from the fuel buyers, or the vessel owners, operators and charterers, and that is the case.

"But now, there seems to be consensus among the fuel suppliers, given the demand from the buyers, to also have tracing."

At present the firm is involved in biofuel tracing at Singapore, Houston and Rotterdam, MacDonald said.

"I think we're involved in tracing with all of the major producers and suppliers for biofuels that are entering the maritime market right now," she said.

The firm is starting by adding its tags to small quantities of the fuel entering the market, but is steadily expanding to cover the majority.

"Where, let's say, 20,000 metric tonnes of biofuel is being bunkered in multiple operations, we may start by tagging only 5,000 mt for one client in the first stages of piloting, and then we scale up from there," MacDonald said.

"As we move more upstream and actually begin working with and selling the product to the suppliers, it will be found in all of the 20,000 mt for all of the buyers.

"Right now we're working with what I would call the first movers of the shipping sector, the progressive companies that are more likely to be reporting on their ESG and sustainability metrics."

How it Works

"When we dose fuel with our markers, we do two things," MacDonald said.

"One is unique fingerprint tracing, so we essentially are able to provide a guarantee of origin, and show where the fuel has come from.

"And then the second element is quantification; we can tell if a fuel has been adulterated or not by what concentration of our markers is found."

The second part is proving particularly useful for the biofuels market, allowing the firm to determine with some precision the percentage of a biofuel found in a blend. The firm adds tags to the biofuel element either at the biorefinery or as far upstream as possible, giving its clients visibility over what happens to that fuel at the various stages of the supply chain after that.

The quantification element also allows the company to determine what has happened to the fuel on board ships.

"We've also providing evidence for the downstream on the fuel management practices aboard vessels," MacDonald said.

"We can showcase whether or not the charterer or vessel owner have managed the fuel properly on board.

"And if they have, they're able to then show in a quality dispute that the onus is then on the supply chain.

"That saves them a considerable amount of money in the evidence-gathering process that usually takes place between lawyers, surveyors and labs."

Declining Costs

The firm expects the cost of its services to decline as it expands, MacDonald said.

"Our costs are expected to decrease significantly once when we are commercially operating because of economies of scale," she said.

"Right now at the lower amount of tagging, around 50,000 metric tonnes, you're looking at around one US dollar per tonne for origin tracing to a maximum of three for origin and quantification.

"There may be a higher price point due to the high viscosity of conventional fuels like HSFO [requiring] a higher concentration of markers, but if it's a VLSFO blended with a biodiesel, we're looking at the lower end of the price range."

Conventional VLSFO and MGO tracing is also at the lower end of the firm's price range.

"There was a recent report out from Thetius and Lloyd's Register that showed around a $30,000-50,000 cost per vessel for a quality dispute," MacDonald said.

"Our service is a small fraction of that."

Alternative Fuels

BunkerTrace is also looking into working on other alternative bunker fuel markets beyond biofuels, MacDonald said.

"When it comes to LNG, so long as it's in its liquefied form rather than gaseous, it's not a problem [to trace with synthetic DNA tagging]," she said.

"Methanol is not a problem for us either."

But when working with these fuels, the company will need to get access to more data on production to give its clients more visibility over their green credentials, she added.

"What's interesting is of course when it comes to tagging and improving the sustainability element of these fuels, we also need to look more upstream at verifying the production, the methods of production and the energy used in production.

"Then we're able to differentiate fuels to prove what is green versus grey.

"This will be key to recovering your investment, as green fuels are chemically and molecularly identical to their counterparts that have not been produced sustainably, and will share the same bunkering infrastructure going forward yet will be thee to five times the price."