EU-Specific Biofuel Regs Could Boost Bunker, Emissions Savings for Some Products

Mark VandeVoorde, Managing Director, Klean Industries. Image Credit: Klean Industries

Variations in how jurisdictions classify certain biofuels mean EU bunker buyers could see greater emissions savings than buyers of the same fuel elsewhere.

Recently introduced EU ETS and FuelEU Maritime regulations mean ships trading in the EU must pay for their emissions.

Using biofuels helps reduce the cost of compliance, but they are significantly more expensive than conventional fuels. For example, Ship & Bunker data indicates that in Rotterdam the premium for a B30 biofuel/VLSFO blend over 100% VLSFO is around 50%, or $250/mt.

One such rule variance lies in how the EU's Renewable Energy Directive III (RED III) rules classify what is considered bio, recovered, and renewable fuel. This can lead to some blend components offering a higher level of emissions savings in the EU than elsewhere.

One such product currently gaining attention is Tyre Pyrolysis Oil, or TPO

Produced through the thermal decomposition of waste tires, a portion of TPO is considered a biofuel thanks to the natural rubber used in the manufacture of tires.

In many jurisdictions outside the EU, the remaining non-biogenic component of TPO cannot be counted towards emissions savings quotas. But under the EUs RED III regulations it can be classified as a Recovered Carbon Fuel (RCF). Such fuels have the potential to be counted towards the offsetting of emissions.

TPO

The extraction process to produce TPO involves heating used tires in an oxygen-free environment, breaking the tires down into three main components:

• Recovered Carbon Black (RCB) that can be used in the manufacture of new tyres, rubber products, and plastics
• Steel wire extracted from tire beads that can be directed for metal recycling
• TPO, a viscous liquid hydrocarbon with an energy content similar to HSFO and VLSFO, meaning it is a good candidate as a blend component for bunker fuels.

The percentage of biogenic content in TPO varies depending on the feedstock being used, but importantly, the biogenic rubber component of the tires is concentrated in the resulting TPO.

As the TPO yield can be as high as 50% of the feedstock tire mass, this means a tire with only 15% natural rubber content could produce a TPO with a biogenic content as high as 30%.

As for the non-biogenic component, to be classified as an RCF under RED III it must meet specific criteria that include the use of end-of-life tires and the achievement of certain GHG reduction thresholds.

Klean Industries

Canada-based Klean Industries is one company specializing in resource recovery, waste-to-energy, and the specialist thermal processing systems used to produce TPO.

They recently partnered with Viva Energy on the development of a tyre-recycling facility in Melbourne, which aims to process up to 80,000 tonnes of used tyres per year for use in the production of lower-carbon fuels.

Mark VandeVoorde, Managing Director of Klean Industries, has some 40 years of experience in the marine fuels industry and believes TPO has high potential as a low-cost blend component for modern bio-bunker fuels.

"Klean Industries Tire Pyrolysis Oil can help to decarbonize the marine fuel industry," he told Ship & Bunker.

"The TPO process envisioned for Melbourne has a 40% biogenic content, with the remaining 60% meeting the criteria to be considered an RCF under RED III regulations.

"Further, we've confirmed that the biogenic portion of TPO can be considered an Advanced Biofuel. While individual Member States decide on the implementation of double counting, under EU regulations Advanced Biofuels can be counted with a 2X multiplier, deepening the potential savings."

Understanding exactly how much those savings can be is unfortunately not easy. This is a very new area with legislation either recently implemented or, in the worst cases, still under development.

This means that exactly how the savings of the RCF component will be treated by member states and applied to EU ETS and Fuel EU Maritime rules needs to be looked at on a case-by-case basis.

But even without those savings, VandeVoorde believes TPO's credentials as a viable biofuel feedstock remain strong.

"TPO represents a critical solution to reducing carbon emissions from marine fuel at a reasonable cost compared to many other solutions being evaluated by ship owners and operators.

"At current biofuel price levels in the low $700 to mid $800/mt range, TPO projects are very attractive.

"But this is en emerging area, and along with other technologies, it will take foresight and a willingness by industry stakeholders to invest in Tire Pyrolysis projects to access TPO as a low-carbon solution."