Brasil defende etanol como combustível marítimo

Spanish Market: Biofuels, Petrochemicals
19/10/23

A defesa do uso do etanol como combustível marítimo ganha cada vez mais adeptos no setor energético brasileiro, em um momento em que armadores buscam opções viáveis para descarbonizar a navegação.

Embora o uso do etanol como alternativa ao óleo combustível marítimo tenha ocorrido apenas em fase de teste, o governo estuda, em parceria com empresas navais e companhias sucroalcooleiras, um caminho para alavancar a adoção do biocombustível, fontes disseram à Argus.

A postura adotada pelo Brasil ocorre depois que os membros da Organização Marítima Internacional (IMO, na sigla em inglês), concordaram em reduzir suas emissões em pelo menos 20pc, e de preferência 30pc, até 2030; em pelo menos 70pc, e de preferência 80pc, até 2040; e carbono zero até 2050.

A amônia, o metanol e o hidrogênio estão entre as opções propícias a liderar o esforço global para descarbonizar o transporte marítimo, enquanto alguns armadores estão investindo em novas tecnologias, como a captura e armazenamento de carbono (CCS, na sigla em inglês). Mas o Brasil aposta que o etanol pode desempenhar um papel fundamental nesse futuro.

"Aproveitar nossa experiência com o uso de biocombustíveis em carros e caminhões é um primeiro passo para estruturar soluções para outros setores, incluindo a navegação", disse José Nilton Vieira, coordenador-geral de etanol e biometano no Ministério de Minas e Energia, na conferência sobre navegação verde da IMO, que ocorreu no Chile.

Segundo Vieira, o ministério está estudando formas de substituir gradualmente os combustíveis fósseis na indústria marítima, em linha com o projeto Combustível do Futuro, que estabeleceu metas para setor de aviação.

Futuro flex-álcool

Esse raciocínio está em linha com estudos feitos pela finlandesa Wärtsilä Marine para adaptar o motor flexível do grupo, que opera movido a óleo combustível marítimo e metanol, para também aceitar etanol.

A ideia nasceu na filial brasileira da empresa em 2015, quando o grupo Wärtsila foi contratado pela operadora de balsas sueca Stena Line para converter a embarcação Stena Germanica para operar com metanol.

"Enxergamos que o metanol e o etanol poderiam ser intercambiáveis porque são combustíveis bastante similares", disse o gerente sênior de vendas da empresa na América Latina, Mario Barbosa, à Argus. Os dois combustíveis podem compartilhar características técnicas comuns, como sistemas de injeção e tanques de combustível.

Mas fazer o projeto andar se provou mais difícil do que o esperado, em meio ao debate "food versus fuel" na Europa.

"Os armadores brasileiros são mais receptivos ao conceito porque conhecem bem a infraestrutura por trás da cadeia do etanol em seu país. Para o público europeu, é importante desmistificar crenças sobre sustentabilidade", afirmou Barbosa.

No caminho, a Wärtsilä encontrou um braço amigo na Raízen para realizar estudos de viabilidade, e agora está conduzindo testes em escala comercial em sua sede na Finlândia.

Para operar com metanol, os motores precisam de tanques de combustível que ocupam cerca de 1,7 vezes o tamanho do diesel. Mas, como o etanol tem poder calorífico superior ao de sua substância irmã, menos biocombustível seria consumido para se obter a mesma potência, segundo estudos das empresas.

Próximos passos

A tecnologia, no entanto, é um obstáculo menor em comparação aos próximos desafios que surgirão.

"No fundo, estamos lidando com uma barreira maior de regulação, de visão de mundo e geopolítica, do que de tecnologia", disse à Argus Mateus Lopes, diretor global de transição energética e investimentos da Raízen, em um evento da indústria de etanol.

Lopes acredita que o maior desafio é convencer participantes do setor naval de que o etanol brasileiro pode ajudar a atingir as metas regulatórias da IMO para 2050.

"A indústria marítima está olhando esse mundo eletrificado do hidrogênio, da amônia e do metanol, mas esquecendo de um produto que está na prateleira com 80 milhões de litros disponíveis e que pode ser combinado com essas outras soluções para construir um roadmap", disse.

O executivo da Raízen vê semelhanças com os desafios atuais na indústria de combustível sustentável de aviação (SAF, na sigla em inglês). "Nossa tarefa é sentar à mesa e compartilhar informações para que o etanol seja percebido como uma opção imediata."

Por Vinicius Damazio

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23/12/24

Viewpoint: US LPG cargo premiums poised to fall

Houston, 23 December (Argus) — The booming US LPG export market has fueled record spot fees this year for terminal operators that send those cargoes abroad, but those fees are poised to fall next year as additional export capacity comes online. US propane exports surged over the past two years, hitting an all-time high of 1.85mn b/d in the first quarter of this year, according to data from the US Energy Information Administration (EIA). Terminal fees for spot propane cargoes out of the US Gulf coast hit an all-time high of Mont Belvieu +32.5¢/USG (+$169.325/t) in mid-September. US propane production is expected to grow by another 80,000 b/d in 2025 to 2.22mn b/d while the outlook for domestic consumption is fairly steady, at 820,000 b/d next year — meaning even more propane will be pushed into the waterborne market. But that is dependent on US infrastructure keeping up with the pace of production. US export terminals in Houston, Nederland and Freeport, Texas, have run at or above capacity for the last two years given the thirst for cheaper US feedstock, largely from propane dehydrogenation (PDH) plant operators in China. This demand has created bottlenecks at US docks, and midstream operators like Enterprise, Energy Transfer, and Targa have rushed to ramp up spending on both pipelines and additional refrigeration to stay ahead of the wave of additional production. US gas output spurs LPG exports As upstream producers have ramped up natural gas production ahead of new LNG projects, most producers are counting on LPG demand from international outlets in Asia to offload the ethane and propane the US cannot consume. For the past four years, Asian buyers have been more than happy to oblige. US propane exports to China rose from zero in 2019, when China imposed tariffs on US imports, to an average of 1.36mn metric tonnes (t) per month in January-November 2024, according to data from analytics firm Kpler, making China the largest offtaker of US shipments. US exports to Japan averaged 480,000t per month throughout most of 2024, and exports to Korea averaged 460,000t per month in the first 11 months of 2024. China, Korea, and Japan received 52pc of US propane exports in 2024, up from 49pc in 2020, according to data from Vortexa. Strong demand in Asia has kept delivered prices in Japan high enough to sustain an open arbitrage between the US and the Argus Far East Index (AFEI). Forward-month in-well propane prices at Mont Belvieu, Texas, have remained well below delivered propane on the AFEI. In 2020, Mont Belvieu Enterprise (EPC) propane averaged a $143/t discount to delivered AFEI — a spread that has only widened as additional PDH units in Asia have come online. During the first 11 months of 2024, the Mont Belvieu to AFEI spread averaged a hefty $219/t, leaving plenty of room for wider netbacks in the form of higher terminal fees for US sellers, especially as a wave of new VLGCs entering the global market has left shipowners with less leverage to take advantage of the wider arbitrage. The resulting wider arbitrage to Asia has kept US export terminals running full for the last two years. So when a series of weather-related events and maintenance in May-September limited the number of spot cargoes operators could sell and delayed scheduled shipments, term buyers willing to resell any of their loadings could effectively name their price. This spurred the record-high premiums for spot propane cargoes in September. New projects may narrow premium An increase in US midstream firm investments in additional dock capacity and added refrigeration in the years ahead could narrow those terminal fees, however. Announced projects from Enterprise and Energy Transfer, in particular, will add a combined 550,000 b/d of LPG export capacity out of Houston and Nederland, Texas by the end of 2026. Enterprise's new Neches River terminal project near Beaumont, Texas, will add another 360,000 b/d of either ethane or propane export capacity in the same timeframe. These additions are poised to limit premiums for spot cargoes by the end of 2025. Already, it appears the spike in spot cargo premiums to Mont Belvieu has abated for the rest of 2024. Spot terminal fees for propane sank to Mont Belvieu +14¢/USG by the end of November. The lower premiums come not only as terminals resume a more normal loading schedule, but at the same time a surplus of tons into Asia ahead of winter heating demand has narrowed the arbitrage. The spread between in-well EPC propane at Mont Belvieu fell from $214.66/t to $194.45/t during November. A backwardated market for AFEI paper into the second quarter of 2025 means US prices are poised to fall more in order to keep the spread from narrowing further. By Amy Strahan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: Protectionist policies muddy US PE outlook

23/12/24

Viewpoint: Protectionist policies muddy US PE outlook

Houston, 23 December (Argus) — Potential new tariffs combined with protectionist policies from other importing countries are clouding the outlook for growth in the US polyethylene (PE) market heading into 2025. US president-elect Donald Trump threatened a 25pc tariff on all imports from Canada and Mexico, and at times has threatened as much as a 60pc tariff on all goods imported from China. Any new tariffs open the US up to retaliatory tariffs from the three countries, which have historically been among the top destinations for US PE exports. Brazil, another major trading partner with the US, recently raised import tariffs on PE to 20pc. On top of that, Brazil is in the midst of an anti-dumping investigation into US PE, which if successful would raise the tariff on US PE by an additional 21.4pc, bringing the total tariff for US PE in Brazil to 41.4pc. US PE exports in the first 10 months of 2024 totalled roughly 11.6mn t, with 16.4pc sold to China, 13.3pc sold to Mexico, 10.8pc sold to Brazil and 7pc sold to Canada , according to data from Global Trade Tracker (GTT). US PE producers are increasingly relying on exports, particularly with new capacity still set to come online in the next two years. This includes a new 600,000 t/yr linear low density polyethylene (LLDPE)/high density polyethylene (HDPE) swing plant from Dow set to start in the second half of 2025, as well as 2mn t/yr of HDPE capacity from Chevron Phillips Chemical's joint venture with Qatar-based QE in 2026. Exports as a percentage of total US and Canadian PE sales has been growing since 2016, when it was less than 25pc to crossing the 50pc threshold for the first time in November of this year, according to data from the American Chemistry Council (ACC). ACC data combines the US and Canada and considers trade between them as domestic rather than exports. With the US and Canadian PE markets largely functioning as one, the potential tariffs on product from Canada could cause problems for US buyers as well as Canadian suppliers, whose competitiveness in the region could be limited by new tariffs. "It would be a huge problem," said one US PE buyer who purchases resin from suppliers in both countries. For one particular grade of PE, the buyer said there are only two suppliers, including one producer in Canada and one in the US. If tariffs were imposed on Canadian material, it would suddenly make that particular grade more expensive because it would mean the US producer would no longer need to match competitive offers from Canada. Retaliatory concerns While US buyers are concerned about having to pay new duties on imports from Canada, US producers are also worried about potential retaliatory tariffs from other countries, such as China, and new duties and potential tariffs in Brazil. US PE exports to China totaled roughly 1.9mn t in the first 10 months of 2024, an amount that could not be easily absorbed by many other countries if new tariffs limit sales into that country. And in Brazil, US PE exports totaled roughly 1.26mn t in 2024 through October, another huge chunk that is at risk if the new anti-dumping duties against US PE are implemented. "Brazil is a huge market for the US. It's a big deal," said one US trader. "Producers can ship to countries around Brazil, but that will not cover everything we are losing. Where will it all go?" New outlets are opening up for US product in places such as Europe, where some global capacity has shut down. ExxonMobil, for instance, announced in April it was permanently shutting down its Gravenchon cracker and associated derivative plants in France, including a 420,000 t/yr HDPE-LLDPE swing unit. With the closure of that plant, sources have said ExxonMobil is exporting more volume from its cost-advantaged US assets to the region. But there is a limit to how much US export volume can be absorbed because of shutdowns in other regions. While many market participants are hopeful that proposed tariffs will not materialize, the uncertainty is making it difficult to plan for 2025, sources said. "Speculating on it is a waste. You don't know what is going to happen first, you don't know what the reaction is going to be," said one buyer. "All you can do is try to get the lowest prices you can and work a little bit of flexibility into your contracts." By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: European HVO demand to rise in 2025

23/12/24

Viewpoint: European HVO demand to rise in 2025

London, 23 December (Argus) — European demand for hydrotreated vegetable oil (HVO), or renewable diesel, will be supported in 2025 by a combination of higher mandates for the use of renewables in transport, and by changes to EU member state regulations on the carryover of renewable fuels tickets, like in Germany and the Netherlands . European HVO production could grow by more than 400,000t in 2025, if announced projects are completed in time. Most new plants have the flexibility to switch to sustainable aviation fuel (SAF) production, in the form of hydrotreated esters and fatty acids synthesised paraffinic kerosene (HEFA-SPK). But those seeking to import HVO into the EU will face barriers. Definitive EU anti-dumping duties (ADDs) on Chinese biodiesel and HVO will be imposed by mid-February , and anti-dumping and anti-subsidy duties are already in place for HVO and biodiesel of US and Canadian origin . Flows of US-origin HVO to the UK are unimpeded as transposed EU duties were removed in 2022 . A clean slate... Against a headwind of gradually shrinking diesel demand, national transport renewables mandates are increasing. These ambitions rise again under the next iteration of the EU's Renewable Energy Directive (RED III), for which member states face a May 2025 transposition deadline. Optimism in the biofuels markets will be tempered by experiences in 2024. The low value of renewable fuel tickets — tradeable credits generated primarily by the sale of biofuel-blended fuels — in major European demand centres has weighed on supplier appetite for physical biofuels. This includes the relatively expensive HVO that can be blended in much greater volumes than cheaper fatty acid methyl esters (Fame). A portion of these tradeable tickets can usually be carried over from one obligation year to the next — as was done from 2023-24 — extending pressure on physical biofuel demand. But Germany has approved a law removing the option for companies to carry over excess 2024 greenhouse gas (GHG) certificates through both 2025 and 2026, aimed at resetting the outlook for physical renewables demand. Obligated parties will need start from scratch to meet their annual GHG savings targets — at 10.6pc for 2025 and 12.1pc for 2026 — resulting in greater demand for physical biofuels including HVO. In the Netherlands, the tickets carryover will be reduced from 25pc to 10pc for companies with an annual blending obligation. ...follows volatility Prompt HVO assessments firmed significantly late in 2024 — albeit from long-term lows — driven by short-term demand in the Netherlands at a time of tight regional supply. HVO (Class II) fob ARA range, a European benchmark based on HVO produced from used cooking oil (UCO), peaked at $1,500/m³ as a premium to escalated gasoil by 14 November — or a 122pc increase from the start of October — equating to $2,652.91/t on an outright basis. Assessments then fell back to a $860/m³ premium a week later, when the market rebalanced as suppliers looked to reroute prompt volumes. Before the rise, prices had hovered around historically soft levels for a sustained period. Sweden's decision to slash its GHG emissions mandate for the 2024-26 period due to fuel price concerns, and the low ticket prices have kept a lid on values. The HVO (Class II) outright price averaged around $1,625/t over 1 January-31 October 2024, down by around $580/t compared with the same period of 2023. While fundamentals now point to growth in European HVO use, the futures curve is backwardated. Those in the market may yet take a position that aligns with this viewpoint, but recent volatility has stunted forward trade. By Toby Shay Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: US tax fight next year crucial for 45Z

23/12/24

Viewpoint: US tax fight next year crucial for 45Z

New York, 23 December (Argus) — A Republican-controlled Congress will decide the fate next year of a federal incentive for low-carbon fuels, setting the stage for a lobbying battle that could make or break existing investment plans. The 45Z tax credit, which offers greater subsidies to fuels that produce fewer emissions, is poised to kick off in January. Biofuel output has boomed during President Joe Biden's term, driven in large part by west coast refiners retrofitting facilities to process lower-carbon fats and oils into renewable diesel. The 45Z tax credit, created by the 2022 Inflation Reduction Act (IRA), was designed to extend that growth. But Republicans will soon control Washington. President-elect Donald Trump has dismissed the IRA as the "Green New Scam", and Republicans on Capitol Hill, who had no role in passing Biden's signature climate legislation, are keen to cut climate spending to offset the steep cost of extending tax cuts from Trump's first term. Biofuels support is a less likely target for repeal than other climate policies, energy lobbyists say. But Republicans have already requested input on 45Z, signaling openness to changes. Republicans plan to use the reconciliation process, which enables them to avoid a Democratic filibuster in the Senate, to extend tax breaks that are scheduled to expire in 2025. "I want to place our industry in a place to make sure that the biofuels tax credit is part of reconciliation," said Kailee Tkacz Buller, president of the National Oilseed Processors Association. But lawmakers "could punt the biofuels discussion if stakeholders aren't aligned." A decade ago, biofuel policy was a simple tug-of-war between the oil and agriculture industries. Now many refiners formerly critical of the Renewable Fuel Standard produce ethanol and advanced biofuels themselves. And the increasingly diverse biofuels industry could complicate efforts to present a united front to Congress. Farm groups worry about carbon intensity scoring hurting crop demand and have lobbied to curtail record-high feedstock imports, to the chagrin of some biorefineries. Those producers are no monolith either: Biodiesel plants often rely more on local vegetable oils, while ethanol producers insist on keeping incentives that do not discriminate by fuel type and some oil majors would back subsidizing fuels co-processed with petroleum. Add airlines into the picture, which want greater incentives for aviation fuels, and marketers frustrated by 45Z shifting subsidies away from blenders — and the threat of fractious negotiations next year becomes clear. There are options for potential compromise, according to an Argus analysis of comments submitted privately to Republicans in the House of Representatives, as well as interviews with energy lobbyists and tax experts. The industry, frustrated by the Biden administration's delays in clarifying 45Z's rules, might welcome legislative changes that limit regulatory discretion regardless of what agency guidance eventually says. And lobbyists have floated various ways to appease agriculture groups without kneecapping biorefineries reliant on imports, including adding domestic content bonuses, imposing stricter requirements for Chinese-origin used cooking oil, and giving preference to close trading partners. Granted, unanimity among lobbyists is hardly a priority for Republican tax-writers. Reaching any consensus in the restive caucus, with just a handful of votes to spare in the House, will be difficult enough. "These types of bills always come to down to what's the most you can do before you start losing enough votes to pass it," said Jeff Navin, cofounder of the clean energy advocacy firm Boundary Stone Partners and a former House and Senate staffer. "Because they can only lose a couple of votes, there's not much more beyond that." And the caucus's goal of cutting spending makes an industry-wide goal — extending the 45Z credit into the 2030s — even more challenging. "It is a hard sell to get the extension right away," said Paul Winters, director of public affairs at Clean Fuels Alliance America. Climate costs Cost concerns also make less likely a simple return to the long-running blenders credit, which offered $1/USG across the board to biomass-based diesel. The US Joint Committee on Taxation in 2022 scored the two-year blenders extension at $5.5bn, while pegging three years of 45Z at less than $3bn. An inconvenient reality for Republicans skeptical of climate change is that 45Z's throttling of subsidies based on carbon intensity makes it more budget-friendly. Lawmakers have other reasons to not ignore emissions. Policies elsewhere, including California's low-carbon fuel standard and Europe's alternative jet fuel mandates, increasingly prioritize sustainability. The US deviating from that focus federally could leave producers with contradictory incentives, making it harder to turn a profit. And companies that have already sunk funds into reducing emissions — such as ethanol producers with heavy investments in carbon capture — want their reward. Incentives with bipartisan buy-in are likely more durable over the long run too. Next time Democrats control Washington, liberals may be more willing to scrap a credit they see as padding the profits of agribusiness — but less so if they see it as helping the US decarbonize. By Cole Martin Tax credit changes 40A Blenders Tax Credit 45Z Producers Tax Credit $1/USG Up to $1/USG for road fuels and up to $1.75/USG for aviation fuels depending on carbon intensity For domestic fuel blenders For domestic fuel producers Imported fuel eligible Imported fuel not eligible Exclusively for biomass-based diesel Fuels that produce no more than 50kg CO2e/mmBTU are eligible Feedstock-agnostic Carbon intensity scoring incentivizes waste over crop feedstocks Co-processed fuels ineligible Co-processed fuels ineligible Administratively simple Requires federal guidance on how to calculate carbon intensities for different feedstocks and fuel pathways Expiring after 2024 Lasts from 2025 through 2027 Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: EU, UK mandates will drive global SAF demand

20/12/24

Viewpoint: EU, UK mandates will drive global SAF demand

London, 20 December (Argus) — Europe will be a primary consumption hub for sustainable aviation fuel (SAF) in 2025, driven by EU and UK mandates that come into effect in January. The mandates could push European SAF demand above 1.5mn t next year, according to Argus Consulting estimates. There should be more than enough global SAF supply to meet mandated demand in Europe in the early stages of obligations. If all announced projects are completed on time, global capacity could surpass 10mn t/yr in 2025, according to Argus Consulting, with hydrotreated esters and fatty acids synthetic paraffinic kerosene (HEFA-SPK) still the dominant SAF production pathway. But several projects have been hit with delays in the past, and some European majors have scaled back or paused their capacity plans. Actual production is likely to be far lower than nameplate capacity, with the International Air Transport Association (Iata) forecasting global output of 2.1mn t next year . European suppliers may also opt to maximise hydrotreated vegetable oil (HVO) production over HEFA-SPK. In most HEFA-SPK plants, the production process relies on first hydrotreating vegetable oils and fats, a process aligned with standard HVO production. Renewable diesel demand should increase with higher mandates for renewables in road transport and changes to German and Dutch carryover rules on renewable fuel tickets next year. At the same time, European HVO imports face barriers. Definitive EU anti-dumping duties (ADDs) on Chinese biodiesel and HVO are expected to be imposed by February . And anti-dumping and anti-subsidy duties are in place on HVO and biodiesel of US and Canadian origin . SAF is excluded from ADDs on Chinese biofuels. SAF supply has grown at a faster pace than demand this year, pushing the northwest European HEFA-SPK premium to jet fuel to record lows . The European benchmark HEFA-SPK fob ARA range assessment averaged around $2,203/t over 1 January-12 December, down from around $3,016/t in the same period last year. Ready, set, mandate Fuel suppliers will need to incorporate a 2pc share of SAF in their annual EU jet fuel deliveries from next year, with the share rising to 70pc by 2050. Synthetic aviation fuels, such as e-kerosine and hydrogen, must reach a total share of 1.2pc from 2030, rising to 35pc in 2050. The UK's mandate also requires aviation fuel suppliers to hit a 2pc SAF share in 2025, increasing linearly to reach 22pc in 2040. A UK obligation for power-to-liquid SAF will be introduced from 2028 at 0.2pc of total jet fuel demand, rising to 3.5pc in 2040. Separately, London's Heathrow airport aims to increase the share of SAF used to 3pc in 2025 as part of an incentive scheme that helps airlines cover extra costs. Beyond Europe Progress to introduce SAF blending obligations or legislate consumption targets is slower outside of Europe. In China, a pilot programme was launched earlier this year to support domestic SAF uptake. A consumption target of 50,000t was set in the country's five-year plan for 2021-25. Other initiatives in the Asia-Pacific region include South Korea's plan to require all international flights departing from its airports to use a mix of 1pc SAF from 2027 and Singapore's 1pc SAF target by 2026 for flights departing the country. Indonesia plans to require 1pc SAF from 2027, while Malaysia and Hong Kong are also expected to set targets. In the US, the level of priority to be given to renewable aviation fuels is less clear following Donald Trump's election victory. Guidance around a new producers' tax credit, set to come into effect next year, is still pending . The growth of the US SAF market has so far been driven mainly by federal and state financial incentives. By Giulia Squadrin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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