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Embraer entra em fundo da United para SAF

  • Market: Biofuels
  • 15/02/24

A Embraer aderiu ao fundo de investimento internacional da United Airlines Ventures para produzir combustível de aviação sustentável através de investimentos em startups.

A gigante brasileira informou que agora está entre as 22 empresas de todas as partes da cadeia de abastecimento do setor aéreo que comprometeram mais de $200 milhões para o Fundo de Voos Sustentáveis da United Airlines Ventures (UAV), ao mesmo tempo em que colaboram para fornecer experiência às companhias do portfólio do fundo.

Os parceiros do fundo – lançado no início de 2023 – incluem a companhia aérea Air New Zealand, a fabricante aeroespacial Boeing, a gigante tecnológica Google, a empresa de engenharia Honeywell e o banco JP Morgan Chase.

O SAF é uma opção para descarbonizar a indústria da aviação, assim como diminuir o número de voos, desenvolver aeronaves elétricas, investir na infraestrutura para ferrovias internacionais de alta velocidade e limitar o uso de combustíveis fósseis.

Mas há um consenso de que a capacidade de produção do biocombustível precisa aumentar drasticamente para desempenhar um papel na descarbonização da aviação. Novos mandatos para o uso do combustível, subsídios governamentais, construção de usinas e pesquisas são alguns dos esforços da indústria para ajudar o mercado a crescer.

Recentemente, a Embraer conduziu testes usando 100pc de SAF em seus jatos executivos Phenom 300E e Praetor 600, como parte de sua meta de zerar as emissões líquidas até 2040. Os testes foram realizados em suas instalações Melbourne, na Flórida, usando produto fornecido pela World Fuel. Hoje, as aeronaves da Embraer estão autorizadas a operar com misturas de 50pc de SAF.

Em 2022, a empresa fechou parceria com a gigante sucroalcooleira Raízen para desenvolver a produção e infraestrutura do combustível de aviação sustentável, mas detalhes de qualquer trabalho no âmbito da parceria ainda não foram divulgados.


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08/01/25

Tidewater seeks Canadian import duties on US RD

Tidewater seeks Canadian import duties on US RD

Seattle, 8 January (Argus) — Canadian biofuels producer Tidewater Renewables is asking the federal government to impose countervailing and anti-dumping duties on renewable diesel (RD) imported from the US. Tidewater's complaint to the Canada Border Services Agency (CBSA) alleges the nation's renewable diesel market is being pressured by US producers who export volumes to Canada at artificially low prices because of US tax incentives — the now-retired blender's tax credit and pending Clean Fuel Production Credit. The complaint is also intended to alleviate pressure on emissions credits issued by British Columbia's low-carbon fuel standard (LCFS) and Canada's Clean Fuel Regulation, Tidewater said Monday in a statement. Tidewater said duties of C$0.50-0.80/liter (35-56¢/liter) could be imposed at the border on US renewable diesel if the complain it upheld, reflecting an estimated subsidy and dumping benefit to US producers of 40-60pc. CBSA is charged with investigating and verifying the complaints, while the Canadian International Trade Tribunal (CITT) is responsible for determining if those activities have harmed the Canadian industry. For a CBSA investigation to proceed, the complaint must have support from producers representing at least 25pc of Canadian output. Evidence of injury could then include lower prices and lost sales, reduced market share or decreased profits, among other factors. An affirmative finding by the CITT would grant the CBSA authority to impose import duties, in this case intended to offset the alleged unfair price advantage held by US exporters. Preliminary duties could be imposed as early as May, following a preliminary injury finding by the CITT. Final duties — dependent on the ruling by the CITT — could be imposed by September, Tidewater said. The company in December cited challenging economic conditions in its decision to re-evaluate its renewable diesel production from March-onward at its 3,000 b/d renewable diesel plant in British Columbia. Tidewater's profitability is dependent on sales of British Columbia LCFS credits, and its credit purchase and sales agreement with parent company Tidewater Midstream is due to end in March. By Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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S Korea’s SK Energy supplies first SAF cargo to Europe


06/01/25
News
06/01/25

S Korea’s SK Energy supplies first SAF cargo to Europe

Singapore, 6 January (Argus) — South Korean refiner SK Energy has exported its first sustainable aviation fuel (SAF) cargo to Europe, describing itself as the first refinery in the country to do so. The cargo was exported four months after the refiner started commercial co-processing of SAF, SK Energy said today. SK Energy completed a dedicated SAF production line at its 840,000 b/d Ulsan refinery in September 2024. The refiner has established a production capacity of around 80,000 t/yr of SAF and around 20,000 t/yr of other low-carbon products such as bio-naphtha, using bio-feedstocks such as used cooking oil (UCO) and animal fats with traditional oil production processes. SK Energy works with its affiliate SK On Trading International to secure waste-based raw material as feedstock. It is one of three South Korean refineries which are producing SAF through co-processing, with the other two being S-Oil and Hyundai Oilbank. A fourth refiner GS Caltex has not announced plans to produce SAF, but is likely studying options including co-processing. It previously supplied around 5,000 kilolitres of SAF to Japan's Narita airport via Japanese trading firm Itochu on 13 September 2024. South Korea plans to require all international flights departing from its airports to use a mix of 1pc SAF from 2027 , with a target for the country to capture 30pc of the global blended SAF export market, it announced in August 2024. It remains unclear if co-processed SAF will be allowed to meet the country's mandate, but some South Korean refineries are optimistic. The country also said in August it planned to establish a national standard, certification and testing method for SAF beginning in December 2024, but no updates have surfaced as of 6 January 2025. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Q&A: EU biomethane internal market challenged


02/01/25
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02/01/25

Q&A: EU biomethane internal market challenged

London, 2 January (Argus) — The European Commission needs to provide clearer guidance on implementing existing rules for the cross-border trade of biomethane to foster a cohesive internal market as some EU member states are diverging from these standards, Vitol's Davide Rubini and Arthur Romano told Argus. Edited excerpts follow. What are the big changes happening in the regulation space of the European biomethane market that people need to watch out for? While no major new EU legislation is anticipated, the focus remains on the consistent implementation of existing rules, as some countries diverge from these standards. Key challenges include ensuring mass-balanced transport of biomethane within the grid, accurately accounting for cross-border emissions and integrating subsidised biomethane into compliance markets. The European Commission is urged to provide clearer guidance on these issues to foster a cohesive internal market, which is essential for advancing the EU's energy transition and sustainability objectives. Biomethane is a fairly mature energy carrier, yet it faces significant hurdles when it comes to cross-border trade within the EU. Currently, only a small fraction — 2-5pc — of biomethane is consumed outside of its country of production, highlighting the need for better regulatory alignment across member states. Would you be interested in seeing a longer-term target from the EU? The longer the visibility on targets and ambitions, the better it is for planning and investment. As the EU legislative cycle restarts with the new commission, the initial focus might be on the climate law and setting a new target for 2040. However, a review of the Renewable Energy Directive (RED) is unlikely for the next 3-4 years. With current targets set for 2030, just five years away, there's insufficient support for long-term investments. The EU's legislative cycle is fixed, so expectations for changes are low. Therefore, it's crucial that member states take initiative and extend their targets beyond 2030, potentially up to 2035, even if not mandated by the EU. Some member states might do so, recognising the need for longer-term targets to encourage the necessary capital expenditure for the energy transition. Do you see different interpretations in mass balancing, GHG accounting and subsidies? Interpretations of the rules around ‘mass-balancing', greenhouse gas (GHG) emissions accounting and the usability of subsidised biomethane [for different fuel blending mandates] vary across EU member states, leading to challenges in creating a cohesive internal market. When it comes to mass-balancing, the challenges arise in trying to apply mass balance rules for liquids, which often have a physically traceable flow, to gas molecules in the interconnected European grid. Once biomethane is injected, physical verification becomes impossible, necessitating different rules than those for liquids moving around in segregated batches. The EU mandates that sustainability verification of biomethane occurs at the production point and requires mechanisms to prevent double counting and verification of biomethane transactions. However, some member states resist adapting these rules for gases, insisting on physical traceability similar to that of liquids. This resistance may stem from protectionist motives or political agendas, but ultimately it results in non-adherence to EU rules and breaches of European legislation. The issue with GHG accounting often stems from member states' differing interpretations of the IPCC Guidelines for National Greenhouse Gas Inventories. Some states, like the Netherlands, argue that mass balance is an administrative method, which the guidelines supposedly exclude. Mass balancing involves rigorous verification by auditors and certifying bodies, ensuring a robust accounting system that is distinct from book and claim methods. This distinction is crucial because mass balance is based on verifying that traded molecules of biomethane are always accompanied by proofs of sustainability that are not a separately tradeable object. In fact, mass balancing provides a verifiable and accountable method that is perfectly aligned with UN guidelines and ensuring accurate GHG accounting. The issue related to the use of subsidised volumes of biomethane is highly political. Member states often argue that if they provide financial support — directly through subsidies or indirectly through suppliers' quotas — they should remain in control of the entire value chain. For example, if a member state gives feed-in tariffs to biomethane production, it may want to block exports of these volumes. Conversely, if a member state imposes a quota to gas suppliers, it may require this to be fulfilled with domestic biomethane production. No other commodity — not even football players — is subject to similar restrictions to export and/or imports only because subsidies are involved. This protectionist approach creates barriers to internal trade within the EU, hindering the development of a unified biomethane market and limiting the potential for growth and decarbonisation across the region. The Netherlands next year will implement two significant pieces of legislation — a green supply obligation for gas suppliers and a RED III transposition. The Dutch approach combines GHG accounting arguments with a rejection of EU mass-balance rules, essentially prohibiting biomethane imports unless physically segregated as bio-LNG or bio-CNG. This requirement contradicts EU law, as highlighted by the EU Commission's recent detailed opinion to the Netherlands . France's upcoming blending and green gas obligation, effective in 2026, mandates satisfaction through French production only. Similarly, the Czech Republic recently enacted a law prohibiting the export of some subsidised biomethane . Italy's transport system, while effective nationally, disregards EU mass balance rules. These cases indicate a deeper political disconnect and highlight the need for better alignment and communication within the EU. We know you've been getting a lot of questions around whether subsidised bio-LNG is eligible under FuelEU. What have your findings been? The eligibility of subsidised bio-LNG under FuelEU has been a topic of considerable enquiry. We've sought clarity from the European Commission, as this issue intersects multiple regulatory and legal frameworks. Initially, we interpreted EU law principles, which discourage double support, to mean that FuelEU, being a quota system, would qualify as a support scheme under Article 2's definition, equating quota systems with subsidies. However, a commission representative has publicly stated that FuelEU does not constitute a support scheme and thus is not subject to this interpretation. On this basis, FuelEU would not differentiate between subsidised and unsubsidised bio-LNG. A similar rationale applies to the Emissions Trading System, which, while not a quota obligation, has been deemed to not be a support scheme. Despite these clarifications, the use of subsidised biomethane across Europe remains an area requiring further elucidation from European institutions. It is not without risks, and stakeholders require more definitive guidance to navigate the regulatory landscape effectively. By Emma Tribe and Madeleine Jenkins Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Viewpoint: Changing incentives shift RD and SAF in 2025


31/12/24
News
31/12/24

Viewpoint: Changing incentives shift RD and SAF in 2025

Houston, 31 December (Argus) — Federal guidance on the US Inflation Reduction Act's (IRA) 45Z production tax credit will be a lifeline for domestic renewable fuels producers and a key determinant of production splits from 2025 onward, with the largest awards currently earmarked for aviation fuels. Although preliminary guidance and registration protocols were released earlier in 2024, the industry awaits the impending signal that will replace the IRA's section 40B blender's tax credit. The expiring blender's tax credit (BTC) was instrumental in the ramp-up of US renewable diesel production in recent years. Renewable diesel comprised about 65pc of California's overall diesel pool by the first quarter of 2024, but that growing availability has come at the expense of the value of several of the fuel's financial incentives. Valuation of California's prompt Low Carbon Fuel Standard (LCFS) credits has trended lower across the past four years. Prices in May reached an almost nine-year low of $41/t and remained depressed through the summer, during which both renewable diesel imports and domestic production hit all-time highs. Preliminary guidance on the 45Z credit proposes aviation fuels earn $1.75/USG while the maximum for road fuels would reach only $1/USG. Fuels with lower carbon intensity measured by the complete production process will receive greater rewards, in contrast to the expiring blenders tax credit (BTC). This new opportunity, originally announced in 2022, signaled the possibility of increased SAF production and innovation. A flurry of developers have moved forward with SAF projects since, while major renewable fuel producers eye converting RD capacity to SAF. With similar refinery tooling, catalysts, and feedstock requirements, the ability to produce both fuels and toggle between the two has the potential to re-inflate producers' margins. Another opportunity enabled by SAF production as opposed to road fuels is the ability to monetize SAF certificates (SAFc) as a part of the production process. To offset the costs associated with production and act as an added profit generator, existing SAF producers partner with corporate clients and public sector entities looking to offset emissions from business activities like air travel. Under SAFc agreements, a producer will sell the physical fuel to the air carrier, while the environmental attributes go to the corporate client. The physical commodity and certificates are decoupled using a "book and claim" scheme, which creates a digital registry that tracks associated emissions. Renewable diesel production is for now concentrated among biorefineries throughout the US Gulf coast, Midwest and west coast. US capacity trended higher in 2024, largely on the back of conversions, and the supply balance from 2025 onward will likely hinge on domestic output as the new credit scheme removes key incentives for imports. Global Clean Energy in mid-December reached commercial operations of about 5,900 b/d of RD at its Bakersfield, California, conversion. But some refiners have begun to pump the brakes on renewable diesel expansion, citing a degradation in economics that could worsen without the BTC's guaranteed $1/USG. Vertex Energy in the third quarter finished reverting a renewable fuels hydrocracking unit back to processing fossil fuel feedstocks at its 88,000 b/d Mobile, Alabama, facility. Renewable diesel market participants otherwise expect refiners will bring forward into early 2025 planned maintenance, and potentially curb output, as the market overall awaits clarification on 45Z eligibility and award levels. As of 2024, the US Environmental Protection Agency's monthly reporting of renewable fuel production through RIN generation data breaks out renewable jet fuel. The data show a three-fold increase in the amount of SAF produced in the US versus 2023, but also a large boom in imports, mostly from Asia to the US west coast. The expiring BTC enabled the influx of imports, as refiners were able to bring finished neat SAF onshore, blend it with conventional jet fuel, and receive the tax credit, valued at roughly $1.50/USG. With no BTC, import trade flows will be in jeopardy, because new policy aims to support domestic production. In the short term, this would drastically reduce the amount of SAF available in the US, with imports making up roughly 62pc of supply in 2024. These new domestic producers, padded by a new SAF production tax credit, will have ample opportunity to meet US market demand. As airlines look to buy SAF in areas beyond California, having an expansive infrastructure and logistical framework including producers across the US will keep airlines well positioned to increase SAF consumption. By Matthew Cope and Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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Viewpoint: Supply concerns drive RSO backwardation


31/12/24
News
31/12/24

Viewpoint: Supply concerns drive RSO backwardation

London, 31 December (Argus) — Strong export estimates for Australian and Ukrainian rapeseed and canola could offset lower projected levels from Canada, but EU crushers are wary about a supply shortfall for the rest of their 2024-25 crop year. The European Commission forecasts EU 27 rapeseed production at around 17mn t for 2024-25, down from average of 18.2mnt in the previous four crop years. With the EU 27 average rapeseed crush at around 25mn t, based on data from vegetable oil association Fediol, the bloc will need to find 7mn t of rapeseed and canola on the import market for its needs, which include RSO production for transformation into biodiesel. Australia, Ukraine to fill the gap? Australia, which typically delivers 50-70pc of its canola exports to the EU, is forecast to export 4.1mn t in 2024-25, according to the country's agriculture department Abares. Estimates for EU rapeseed imports from major exporter Ukraine vary. The USDA FAS Kyiv earlier this year forecast rapeseed exports from the war-torn country at around 3.6mn t in 2024/25 — a 22pc increase from 3mn t in 2023-24 partly due to expectations of decreased domestic crush levels. Argus estimates this slightly lower, at 3.4mn t — a 6pc increase from its 2023-24 export forecast of 3.22mn t — all of which is likely to make its way to EU countries. But canola production in Canada, one of the EU's key suppliers, is forecast by Statistics Canada at the lowest since 2021-22 at 17.8mn t, probably resulting in an export shortfall compared with previous years. Increased domestic crush levels and rising demand in non-EU countries such as China, Japan and Mexico, which "generally have a willingness to pay more for quality product" according to the USDA — referring to non-GMO treated canola — could reduce EU-bound flows in the coming months. Current- and new-crop RSO in steep backwardation The forward structure between rapeseed oil (RSO) fob Dutch mill current-crop 2024-25 contracts — comprising spot 5-40 days loading and February-March-April (FMA) and May-June-July (MJJ) RSO strips — and the August-September-October (ASO) new-crop contract for 2025 has moved into an unusually steep backwardation in recent months, driven by concerns about rapeseed availability before the start of the 2025-26 crop year. Argus' assessments for the ASO strip were at an average discount of around €80/t ($84/t) to FMA and MJJ contracts as of 13 December. This compares with a curve that saw current- versus new-crop contracts in contango through December 2022 and 2023. This means biodiesel producers will probably have to continue to work with thin margins. Although rapeseed oil methyl ester (RME) fob ARA range prices have followed RSO prices higher, comparatively larger gains on the feedstock outlay have pressured operations. The price spread between spot RME and RSO prices averaged $150/t in the first of half of December, compared with around $200/t in the same period of 2023. Looming agricultural trade barriers Global agricultural trade barriers that have either begun or are planned will be decisive drivers of global vegetable oil prices and trade flows in the new year. China said in September it would start an anti-dumping investigation into canola from Canada. Canola exports from Canada to China are usually between 2mn-4mnt. Indonesia plans to introduce a B40 biodiesel blending mandate in 2025 and has already introduced export permit requirements on palm oil residues, which has sent Malaysian palm oil futures to multi-year highs. In the US, president-elect Donald Trump's announcement about the imposition of 25pc tariffs on all US imports from Canada and Mexico has lead to volatility in the wider vegetable oil complex as well. By Madeleine Jenkins EU rapeseed imports by country of origin mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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