South Korea to boost domestic biofuels use
South Korea plans to expand domestic biofuels use through adopting marine biofuel by 2025, sustainable aviation fuel (SAF) by 2026 and raising its 2030 biofuels blending mandate in the diesel pool.
The country's trade, industry and energy ministry (Motie) announced the measures from its draft Eco-friendly Biofuel Development Measures on 13 October.
Laws should be amended in 2023 to enable SAF and marine biofuels to be introduced in the middle of the decade, according to the plan. It also calls for a "swift" demonstration process to ensure its timeline for aviation and maritime biofuels can be met, implying it will be targeting the use of domestically produced SAF and bio marine fuels to meet future mandates.
Biofuels mixing in the diesel pool should rise to 8pc by 2030 from its current 5pc by 2030 target. This will be achieved by blending 3pc hydrotreated vegetable oil on top of 5pc biodiesel, because of concerns that higher methyl ester biodiesel blends may cause engine start-up defects in winter. South Korea currently mandates 3.5pc biodiesel blending in diesel until the end of 2023.
Besides the mandates to spur demand, the ministry outlined several measures to boost and integrate biofuels production in South Korea.
Motie has scheduled a prefeasibility study in 2024 to study ways to scale up and integrate biofuels technology, with topics likely to include production of bio-naphtha, biofuel production efficiency and feasibility of advanced feedstocks like microalgae, according to the plan.
A public-private committee will be formed to assess progress on the biofuels strategy and develop joint projects.
The government will support setting up an system to align raw material suppliers with biofuels producers and assist companies' overseas feedstocks purchases.
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Canaries' bio-marine fuel demand hit by ETS exemptions
Canaries' bio-marine fuel demand hit by ETS exemptions
London, 28 June (Argus) — Spanish energy firm Cepsa has delayed plans to supply marine biodiesel blends in the Canary Islands as increased demand for conventional bunker fuels and EU regulatory exemptions weigh on market fundamentals for the blended products. Cepsa's international marine fuels sales manager, Francisco Diaz Castro, told attendees at the Maritime Week Las Palmas conference last week that the firm remains committed to supplying marine biodiesel in the Canary Islands but is delaying it in response to a sharp rise in conventional bunker fuel demand in recent months, underpinned by vessels re-routing around the southern tip of Africa to avoid the risk of Houthi attacks in in the Red Sea. Vessels have been stocking up on bunker fuels before and after sailing around Africa's Cape of Good Hope to avoid stopping along the way. Latest data from the Spanish transport ministry show sales of conventional bunker fuel out of the Canary Islands last month increased by 3pc compared with April and by 41pc on the may last year (see table) . This demand growth has pushed suppliers to retain barge availability for conventional bunker fuels, reducing capacity to supply marine biodiesel blends. Market participants told Argus that another reason marine biodiesel demand in the Canary Islands has not picked up is EU regulatory exemptions for vessels sailing between the islands and mainland Spain. According to article 12 (3b) of the EU's Emissions Trading System (ETS) directive, "an obligation to surrender allowances shall not arise in respect of emissions released until 31 December 2030 from voyages between a port located in an outermost region of a member state and a port located in the same member state, including voyages between ports within an outermost region and voyages between ports in the outermost regions of the same member state, and from the activities, within a port, of such ships in relation to such voyages." Argus understands that this exemption applies to all vessels covered under the scope of the EU ETS, but would not apply if the vessel is sailing from an outermost region, such as the Canary Islands, to a different EU member nation, for example the Netherlands. A similar exemption for FuelEU Maritime regulations may be applicable as well, subject to member states asking for the exemption of the specific ports and routes for the vessels. Such an exemption could apply until 2029. Argus understands that requests from member states for this exemption will be published in the coming months. An exemption from FuelEU Maritime regulations could also be applied to routes connecting islands with a population under 200,000 people. This specific exemption would therefore not apply to Tenerife and Gran Canaria but may apply to other parts of the Canary Islands with smaller populations. By Hussein Al-Khalisy and Dafydd ab Iago Canary Islands liquid bunker sales t Month Las Palmas Tenerife Total Sales % m-o-m % y-o-y May-24 282,447 49,749 332,196 3 41 Apr-24 255,262 68,782 324,044 27 38 Mar-24 189,868 64,654 254,522 0 3 Feb-24 207,564 47,344 254,908 -6 0 Jan-24 219,962 51,894 271,856 16 27 Dec-23 187,889 47,306 235,195 4 1 Nov-23 181,218 45,940 227,158 5 -2 Spanish Transport Ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US House panel advances waterways’ projects bill
US House panel advances waterways’ projects bill
Houston, 27 June (Argus) — A Congressional committee on Wednesday advanced a bill to authorize a bundle of US port and river infrastructure projects for the US Army Corps of Engineers (Corps). The Water Resources Development Act (WRDA) biennially authorizes projects handled by the Corps' civil works program aimed at improving shipping operations at the nation's ports and harbors, and along the inland waterway system. The traditionally bipartisan legislation also approves flood and storm programs, and work on other aspects of water resources infrastructure. The House of Representatives' Transportation and Infrastructure Committee on Wednesday passed the bill by a 61-2 vote. The Senate Committee on Environmental and Public Works passed its own version of the bill on 22 May by a 19-0 vote. Neither the full Senate nor House have yet voted on the bills, which will need a conference committee to sort out different versions. A key difference is that the House bill did not include an adjustment to the cost-sharing structure for lock and dam construction and major rehabilitation projects. The Senate measure adjusted the funding mechanism so that 75pc of costs would be paid for by the US Treasury Department's general fund, with the rest coming from the Inland Waterways Trust Fund. The 2022 version of the bill made permanent an increase to 65pc from the general fund and 35pc from the trust fund, which is funded by a barge diesel fuel tax. The House committee's decision not to include the funding change drew disappointment from shipping interests. The Waterways Council was "disappointed that the House did not include a provision to modernize the inland waterways system", but was hopeful that conference negotiations would result in its inclusion, Tracy Zea, chief executive of the group, said. The latest House version of the bill authorizes 12 projects and 160 new feasibility studies. Among the projects receiving approval were modifications to the Seagirt Loop Channel near the Baltimore Harbor in Maryland. The federal government would pay $47.9mn towards an estimate $63.9mn project to widen the channel, which would help meet future demand for capacity within the Port of Baltimore. That would include increased container volume at the Seagirt Marine Terminal. The project was in the works before the 26 March collapse of the Francis Scott Key Bridge temporarily diverted freight from Seagirt and many other port terminals. The committee also authorized $314.25mn towards a resiliency study of the Gulf Intracoastal Waterway. The study would consider hurricane and storm damage and identify ways to improve navigation, reduce the maintenance requirements, and provide resiliency. The waterway connects ports along the Gulf of Mexico from St Marks, Florida, to Brownsville, Texas. The House version of the bill also includes provisions to strengthen flood control, wastewater, and stormwater infrastructure. "Critically, WRDA 2024 will help communities increase resiliency in the face of climate change," representative Rick Larsen (D-WA) said. By Abby Caplan and Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan aims to tighten SAF supply regulations
Japan aims to tighten SAF supply regulations
Tokyo, 27 June (Argus) — Japan is proposing stricter rules for domestic producers of sustainable aviation fuel (SAF) to help cut greenhouse gas (GHG) emissions, aiming to finalise the discussions later this year. The new proposal was announced on 27 June by the country's joint commission of the government and private sector for promoting SAF. The proposed regulations will require SAF producers to cut GHG emissions from jet fuel use by more than 5pc during the April 2030-March 2035 fiscal year against 2019-20 levels. With Japan's domestic jet fuel supplies at 12.5mn kilolitres (210,000 b/d) in 2019-20, the 5pc reduction equates to 1.58mn t of carbon dioxide. Additional targets beyond 2035 will be further discussed, according to the country's ministry of trade and industry (Meti). The Japanese government decided in 2022 to mandate SAF to account for at least 10pc of domestic airlines' jet fuel consumption by 2030. The new proposals also aim to develop new technology for producing SAF, including alcohol-to-jet fuel technology, according to a Meti official that spoke to Argus. There is also scope to promote synthetic fuel-based SAF, or e-SAF, as it could reduce 80-90pc more GHG emissions compared with biofuel-based SAF, he added. Japan's proposals would exceed SAF regulations globally, given that even the EU's ReFuel EU aviation legislation adopted in 2023 does not mandate the "quality of SAF", the Meti official added. By Yusuke Maekawa Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
ExxonMobil exits, Vitol enters California RD project
ExxonMobil exits, Vitol enters California RD project
New York, 26 June (Argus) — A company hoping to construct a 15,000 b/d renewable diesel refinery in Bakersfield, California, this year has settled a dispute with ExxonMobil and inked a new offtake deal with Swiss commodity trader Vitol, providing a reprieve for a project that has been financially stressed. Global Clean Energy Holdings will pay ExxonMobil $18.2mn as a one-time settlement and cancel all 125,000 shares of Global Class C preferred stock that the US oil major had owned, according to a regulatory filing on Wednesday. Two ExxonMobil employees have exited the Global Clean Energy board. The two companies will also ask the Delaware Court of Chancery to dismiss a complaint brought by ExxonMobil that alleged wrongdoing. ExxonMobil had previously moved to cancel an offtake agreement to purchase much of the plant's expected output, citing various production delays, and asked the Delaware court to compel the release of Global internal files. A Global subsidiary has entered into a new agreement with Vitol, in which the trading firm will be the "exclusive supplier of renewable feedstocks" to the Bakersfield plant and "exclusive offtaker" of all renewable diesel and naphtha produced by the facility and its associated environmental attributes, according to the filing. The two companies also entered into a revolving credit agreement, which provides Global with a working capital loan of $75mn. Global Clean Energy has said it wants the facility's primary feedstock to be camelina oil, which would be more able to capitalize on low-carbon fuel incentives because it comes from a cover crop. But the company said in an April regulatory filing that it expects to use only a "minimal amount" of camelina oil in 2024 and 2025. The filing on Wednesday also lists soybean oil, canola oil, and various waste feedstocks, such as used cooking oil, as potential feedstocks Vitol could supply. The agreement with Vitol provides fresh hope for the long-delayed Bakersfield project, one of a handful of renewable fuels facilities that have set plans to come online in California. Global Clean Energy as recently as last month warned there was "substantial doubt" about its ability to survive, given its debt obligations and the uncertain timing for completing its facility. Vitol can terminate the supply and offtake agreement, which is otherwise set to last for three years and can be extended for two more, if the project is not producing at least 5,000 b/d of renewable diesel by 31 October this year. Global Clean Energy declined to provide more details on its construction timeline today but said in a regulatory filing last month that it planned to commence "the start-up phase" of the project this month and begin initial commercial operations during the third quarter. The facility, if completed, could face additional headwinds. Declining prices over the last year for federal renewable identification numbers (RINs) and California low-carbon fuel standard credits have depressed margins for renewable diesel producers. And the growth of biorefineries in the state — including Phillips 66's Rodeo facility that the company said Wednesday is running at full capacity — could mean steep competition for feedstocks. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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