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IBIA CONVENTION: Bunker Quality Experts Warn of 'Interesting Times' With Biofuels
Bunker quality experts have warned the market should be prepared for some turbulence in the shipping industry's shift to using biofuels at scale as more innovative feedstocks are introduced to the supply chain.
A panel of bunker quality experts from testing firms, major suppliers and elsewhere discussed the state of the market at the IBIA Annual Convention 2024 in Athens on Thursday.
Biofuel demand is starting to take off in shipping with GHG regulations from the EU coming into effect. A large increase in sales is widely expected next year.
But bio demand in other industries like aviation is also on the increase for similar reasons. Shipping is unlikely to be able to compete on price for limited biofuel supply with these other industries, and the result will have to be more unfamiliar and less popular feedstocks turning up in biofuel bunker blends.
"We will have interesting times with biofuels," one of the quality experts said.
The panel argued that there are biofuel producers with little or no knowledge of the specific requirements of the shipping industry, and that any feedstock with a carbon factor lower than fossil fuels will be looked at and marketed to the industry.
The shipping industry will need to take a much more forensic look at the entire supply chain for its biofuel blends, bringing in discussions with its engine and separator manufacturers to ensure that every blending component is suitable for use in a ship, the panel argued. This will include the need to see that each component can work with the complex chemical make-up of VLSFO.
Key Bunker Prices More
| VLSFO | MGO | |||
|---|---|---|---|---|
| $/mt | +/- | $/mt | +/- | |
| Singapore | 569.50 | 6.50 | 680.00 | 10.50 |
| Rotterdam | 514.00 | 2.50 | 676.00 | 7.50 |
| Houston | 547.50 | 0.00 | 671.50 | 1.50 |
| Fujairah | 561.00 | 0.50 | 751.00 | 1.50 |
| Global 20 Ports Average | 586.00 | 0.00 | 759.00 | 0.00 |
| Global 4 Ports Average | 548.00 | 2.00 | 694.50 | 5.00 |
| Global Average Bunker Price | 633.50 | 1.00 | 798.50 | 0.50 |
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