Advanced Dutch biofuel ticket supply more than doubles

Market: Biofuels
06/07/22

Dutch oil companies generated around 4.2mn renewable fuel units (HBE), or tickets, in April-June, most of them advanced HBE-Gs.

Each gigajoule of renewable energy that companies physically deliver to the Dutch transport sector generates one HBE, which fuel suppliers can trade to help achieve their annual obligation. For the 2022 compliance year, the targeted share of renewable energy in the Dutch transport sector is 17.9pc, up from 17.5pc in the previous year.

In the first three months of the 2022 compliance year, the Dutch emission authority NEA issued around 4.1mn HBE-Gs — advanced energy units generated by biofuels produced from feedstock listed in Annex IX Part A of the EU's recast Renewable Energy Directive (RED II) — more than twice as many as a year earlier.

Market participants said an increasing amount of HBE-G supply is coming from advanced biofuels used in maritime shipping. Advanced biofuels used in seagoing vessels can be double-counted, but from this year oil companies have to additionally apply a multiplier of 0.8, effectively allowing a 1.6 multiplier for advanced biofuels in maritime shipping. Liquidity in the HBE market has consequently been dominated by trade of HBE-Gs, with prices moving lower to €17.75/GJ in June, from an average of €18.60/GJ in April.

Oil companies booked around 900,000 HBE-IXBs, tickets generated through waste-based biofuels, and around 30,000 HBE-Os, "other" renewable fuel units that are generated by selling electricity to charge electric vehicles or the use of renewable fuels such as green hydrogen. The Dutch government has introduced a 10pc cap on the use of HBE-IXBs this year, while there is no cap on the use of HBE-Os.

The NEA issued around 20,000 conventional HBE-Cs in the April-June period, after none were issud in the same period last year. The use of HBE-Cs is capped at 1.4pc.

By Sophie Barthel

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