FEATURE: Bunkering Services Initiative Seeks to Bring New Delivery Standards to ARA

The project has launched as of the start of this month. Image Credit: Ship & Bunker

The Bunkering Services Initiative - a project bringing together marine fuel suppliers, buyers and other stakeholders seeking to improve delivery standards - has officially launched at the ARA hub in Northwest Europe.

The initiative held an event in London this week to set out its aims. Representatives of the participants spoke on condition of anonymity at the event to allow for a freer discussion.

The project includes companies representing 20% of ARA's bunker volumes, committing to robustly-monitored barges with mass flow meters, digitalised deliveries and transparency on marine fuel quality.

The project has launched as of the start of this month, with the first barges already loaded and making deliveries.

The initial participants are Cargill, Frontline, Hafnia, Hapag-Lloyd, Mercuria, Minerva Bunkering, Oldendorff, Trafigura, TFG Marine, Unifeeder, and Vitol. Lloyd's Register will act as system auditor carrying out checks on barges, while ADP Clear Pte Ltd will be its technology partner for multi-party workflows, real-time reporting and verifiable performance metrics.

"We all know that the bunkering industry has a number of challenges and market distortions; buyers are aware of that, suppliers are aware, other stakeholders like port authorities are aware of that," a supplier said at the event.

"We know that price is a very poor proxy for value when it comes to bunkers, we know that there's a lot of lack of transparency into variables that represent a significant portion of the economic value of the transaction."

Missing Volumes

One of the main issues the initiative hopes to address is that of bunker quantity disputes, in which the ARA hub has become a focal point of the argument in recent years.

The quantity of bunkers delivered to a shipping company is not always the same as the quantity paid for. Traditional tank soundings taken with a measuring tape are vulnerable to both accidental and deliberate misreporting of delivered volumes.

"Just picture yourself going to management and telling them, look around the world, we are buying this year $3.5 billion of fuel, and on average maybe 3% is missing, it's stolen from us," a buyer at the event said.

"They will not have the time to listen to how complex it actually is to find a solution for that, but they will also not accept that $100 million every year is basically stolen from our suppliers."

The quantity disputes can lead to price discrepancies in the market, with those underdelivering volumes able to quote prices lower than those delivering the actual amount sold, making it harder for buyers to know which is the best offer in reality.

"[Buyers] are receiving offers that are highly heterogeneous in nature," a supplier said.

"They're trying to make the optimal economic decision, and they're trying to effectively pay the right price for an apple, but they're being offered offers of red fruit, and whether that is in fact an apple, or whether it's a strawberry or raspberry or something else, is not always easy to ascertain for the buyers.

"The mission of the BSI is to really eradicate a lot of these market distortions."

Mass Flow Meters

One solution to this problem lies with mass flow meters, more accurate measurement systems that can give greater confidence in the delivery volumes data given by suppliers.

Singapore was once the most notorious bunkering location for quantity disputes, but since its imposition of mandatory MFMs for fuel oil deliveries since 2017, its reputation for accuracy has improved significantly and the hub is now seen as a world leader in effective regulation.

The ARA ports of Rotterdam and Antwerp-Bruges are set to bring in their own MFM mandate for bunker barges over 300 GT in size from the start of 2026, but the industry has yet to be convinced that the regulation used to govern them will be effective. 

Concerns have been raised that the rules are insufficiently robust, with ISO 22192 standards on the procedures and requirements for bunkering using MFMs not fully integrated into them. They argue this could allow the meters to be tampered with to reduce their efficacy, meaning quantity disputes could continue despite the new rules.

"Many of the participants here have been hopeful that regulatory bodies would step in and play that role and help us evolve the industry to where we all think it should be," a supplier said at this week's event.

"We got tired of waiting for regulators to fulfill that role."

But another supplier speaking to Ship & Bunker at the event argued that many were still hopeful that the regulations in Rotterdam and Antwerp-Bruges could be reformed relatively quickly, once the flaws in the current system become widely apparent over the course of next year.

BSI and Digitalisation

But the BSI project is about more than just the use of MFMs, and aims to put together a fully digitalised system delivering full transparency to all stakeholders in a bunker transaction.

The use of ADP Clear's systems will mean vessel-to-vessel communications will be conducted over a secure network to exchange data and documentation.

Data will be provided on average customer ratings of the suppliers in the initiative, their off-spec rates, average pumping times, average calorific values delivered, barge delay figures and other metrics.

"The collaboration and trust and transparency, the backbone of the database, will bring a marked change in the bunker industry," one of the participants said.

"There's nothing like this, in my opinion, that has come out: no regulation, no standard has achieved this voluntary effort to come together to strive to address the challenges which plague this delivery."

Building Momentum

The next step for the initiative will be to build scale, starting by bringing in as many market participants as possible who operate at the ARA hub.

"We are only in the very start of this dialogue, and it needs a lot of education," a supplier said at the event.

"They're getting there.

"And I also think that some of the bunker traders, mainly the bigger ones, are actually looking at this as an opportunity."

Beyond that, participants in the initiative are also keen to see similar projects emerging at other locations around the world.

"Don't wait for a BSI in Panama or the Jakarta Strait; let's go for it," a supplier said.

"There's no good reason for not having MFMs on all of your barges, efficiency, transparency, governance.

"There's so many reasons, if it's done in the right way."