ISCC sets shipping, aviation green fuels PoC framework

Spanish Market: Biofuels, Oil products
18/12/24

The International Sustainability and Carbon Certification (ISCC) has issued a framework to provide 'Proof of Compliance' (PoC) for the use of low emission fuels in the aviation and maritime sectors.

The PoC is intended to address challenges arising from the unavailability of Proof of Sustainability (PoS) documentation for downstream operators, such as airlines and shipowners. These downstream operators are typically the obligated party in showcasing compliance with EU regulations such as the EU emissions trading system ETS and FuelEU Maritime. A major biofuel supplier expects that the framework could be used as soon as next month.

ISCC said that the PoC was developed in alignment with regulatory requirements and will serve to supplement the ISCC EU scheme. The ISCC has also published a guidance document, template, and audit procedures for PoC documents.

According to the guidance document, the issuance of a PoC document for a batch of certified fuel is only possible if the underlying PoS document has been surrendered to relevant competent authorities, and that a claim for the same batch of fuel further downstream is not prohibited by the relevant competent authorities. The PoC document must also include a reference to the original underlying PoS to allow for cross-referencing, as well as information on which scheme the fuel has already been counted under in which the PoS was surrendered. ISCC added that the PoC document can in principle also be used for claims in voluntary markets but recommended that involved parties examine the implications of claiming the same fuel volumes towards voluntary targets.

This comes after market participants reported regulatory uncertainty regarding the use of some marine biodiesel blends throughout the year. In the Netherlands, shipping companies which purchase marine biodiesel blends including fatty acid methyl esther (Fame) might not receive PoS for RED-certified biofuel, as suppliers further up the chain would probably have already submitted these to redeem the corresponding class of Dutch renewable tickets (HBEs). Buyers could instead receive a raw material and intermediary product delivery document, in the form of a sustainability declaration with many of the same relevant details.

By Hussein Al-Khalisy

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18/12/24

Element Alpha wins Dec Pakistan NRL bitumen sell tender

London, 18 December (Argus) — Pakistani refiner NRL has awarded its latest single cargo bitumen sell tender to Switzerland-based trading firm Element Alpha, after withdrawing its two previous tenders for October and November loading dates. Unlike in the previous tenders, which specified 6,000t of pen 60/70 bitumen to be loaded at Karachi's Port Qasim port, NRL has on this occasion agreed to sell a 4,500t bulk bitumen cargo of the same penetration grade to Element Alpha at a price in the $370-380/t fob Karachi range, sources involved the tender process said. International bitumen market participants said the cargo is expected to be loaded on the 5,249dwt Bitumen Kosei in the 20-30 December timeframe. The tanker is making its way towards Pakistan having delivered a cargo to Durban, South Africa, that had been loaded at Bahraini state-owned refiner Bapco's Sitra refinery and export terminal. International trading firms said Pakistani exports need to be price competitive with Bahraini exports in particular to be attractive, and that gaps between bids into NRL's October and November tenders for 6,000t cargoes and values sought by the exporter had contributed to their non-awards. Pakistan has become a growing source for cargo flows into South Africa over the past year or so, vying with supplies from the Mideast Gulf and with European Mediterranean flows shipped around west Africa. The last monthly NRL tender to have been awarded was a 6,000t cargo in the $390-400/t fob Karachi range under its September offering that went to an international trading firm . By Keyvan Hedvat Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US funding bill to allow year-round E15 sales

18/12/24

US funding bill to allow year-round E15 sales

Washington, 17 December (Argus) — A stopgap government funding measure that leaders in the US House of Representatives unveiled late Tuesday would authorize year-round nationwide sales of 15pc ethanol gasoline (E15) and offer short-term biofuel blending relief to some small refiners. The 1,547-page bill, which is set for a vote in the coming days, is needed to avoid a government shutdown that would otherwise begin on Saturday. The bill would fund the government through 14 March and extend key expiring programs, such as agricultural support from the farm bill. It would also provide billions of dollars in disaster relief and pay the full cost of rebuilding the Francis Scott Key bridge in Maryland, which collapsed earlier this year after being hit by a containership. The inclusion of the E15 language, based on a bill by US senator Deb Fischer (R-Nebraska), marks a major win for ethanol producers and farm state lawmakers who have spent years lobbying to permanently allow year-round E15 sales. The bill would also provide short-term relief to some small refiners under the Renewable Fuel Standard that retired renewable identification numbers (RINs) in 2016-18 in cases when their requests for "hardship" waivers remained pending for years. The bill would return some of those RINs to the small refiners and make them eligible for compliance in future years. E15 was historically unavailable year-round because of language in the Clean Air Act that imposes more stringent fuel volatility requirements during summer months. In president-elect Donald Trump's first term, regulators began to allow year-round E15 sales by extending a waiver available for 10pc ethanol gasoline (E10), but a federal court in 2021 struck that down . Federal regulators have issued emergency waivers retaining year-round E15 sales over the last three summers. Enacting the stopgap funding bill would also make it unnecessary for eight states to follow through with a costly gasoline blendstock reformulation — set to begin as early as next summer — they had requested as a way to retain year-round E15 sales in the midcontinent . Oil industry groups last month petitioned EPA to delay the fuel reformulation until after the 2025 summer driving season, citing concerns about inadequate fuel supply and the prospects that a legislative fix would make required infrastructure changes unnecessary. Ethanol groups say the E15 legislative change could pave the way for retailers to more widely offer the high-ethanol fuel blend, which is currently available at 3,400 retail stations and last summer was about 10-30¢/USG cheaper than 10pc ethanol gasoline (E10). Offering the fuel year-round would be "an early Christmas present to American drivers," ethanol industry group Growth Energy chief executive Emily Skor said. House speaker Mike Johnson (R-Louisiana) has faced blowback from many Republicans in his caucus for negotiating such a sprawling bill that has tens of billions of dollars in new spending, after vowing to buck a practice of preparing a "Christmas tree bill" that forces lawmakers to vote on a must-pass bill right before the holidays. Johnson said today the bill remains a "small" funding bill, but that it needed to expand because of "things that were out of our control" such as hurricanes and economic aid for farmers. The Republican backlash could make it more difficult for Johnson to pass the bill, but Democrats are expected to provide broad support. By Payne Williams and Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Danish fund buys 90pc of Canadian H2 project

17/12/24

Danish fund buys 90pc of Canadian H2 project

Houston, 17 December (Argus) — Danish renewable fund Copenhagen Infrastructure Partners (CIP) has acquired a majority stake in German developer ABO Energy's hydrogen project in Newfoundland, Canada. CIP bought a 90pc stake in ABO's Toqlukuti'k project, which is expected to use wind to produce hydrogen and ammonia, the companies said on Tuesday. ABO will hold the remaining 10pc. Financial terms of the transaction were not disclosed. The multiphased project would produce hydrogen to decarbonize production at the nearby Braya Renewable Fuels refinery in Come-by-Chance as well as ammonia for export, ABO has said. Construction was to begin in 2026, the company said in March. However, Braya announced 9 December that it is weighing whether to idle its 18,000 b/d biorefinery before the end of year because of poor margins and uncertainty about US biofuels policy. ABO and CIP did not comment on Toqlukuti'k project plans, other than noting the site has the capacity to develop up to 5GW of onshore wind. Capitalizing on ample wind and its proximity to northern Europe, Newfoundland has been at the center of Canadian ambitions to build hydrogen capacity and export derivative products. In 2022, Canada signed an agreement to supply Germany with clean hydrogen and foresaw exports by 2025. However, exports are unlikely by next year as project timelines have slipped and northern European demand has failed to takeoff. Last month, another would-be Newfoundland hydrogen developer said it was exploring options to co-locate its project with a data center or steel manufacturing because export markets were taking longer than expected to develop. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Alabama lock to remain closed until spring

17/12/24

Alabama lock to remain closed until spring

Houston, 17 December (Argus) — The US Army Corps of Engineers (Corps) has determined that the main chamber of the Wilson Lock on the Tennessee River near Florence, Alabama, will remain closed until spring 2025 as repairs continue. The Wilson Lock, the first lock on the Tennessee River, closed on 25 September after cracks in the lock gates on both the land and river sides were discovered. The main lock was closed to prevent further damage in the main chamber, although the auxiliary chamber was kept open for navigation. The Corps had been eyeing an earlier opening date for the main chamber since the start of November. Although months of repairs have taken place, the Corps resolved to keep the main chamber closed to preserve the lock and maintain personnel safety. The Corps, in partnership with the Tennessee Valley Authority (TVA), is still assessing the root cause of the cracking. A second de-watering of the gate is scheduled for the first three months of 2025 to repairs. No official date has been set for the lock reopening, although some barge carriers have heard of a late April opening date. A regular 15 barge tow has endured 5-6 days of delay through the lock on average, according to carriers. The Corps' Lock Status Report on the Wilson Lock reported a nearly two-week delay for tows navigating through the lock. This has been costly for shippers by forcing them to pay delay fees. Wilson Lock is the second lock in Alabama to undergo a lengthy closure this year. Most lock and dams along the US river system are over 70 years old, likely resulting in more closures in the coming year. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Viewpoint: European UCO to react to policy shifts

17/12/24

Viewpoint: European UCO to react to policy shifts

Amsterdam, 17 December (Argus) — European demand for waste feedstock used cooking oil (UCO) is likely to rise in 2025, but supply could tighten with policy shifts in Asia and the US affecting global trade flows. Sustainable aviation fuel (SAF) mandates in the EU and in the UK , which enter into force from 2025, position waste feedstocks such as UCO as crucial inputs. Biofuels derived from food and feed crops, palm fatty acid distillate, palm and soy-derived materials, soap stock, and their derivatives, unless included in Annex IX of the EU's Renewable Energy Directive (RED), are excluded from both mandates. Biodiesel from waste-based feedstocks — UCO-based Ucome in particular — will be a key compliance option for ship owners in reaching the FuelEU Maritime mandate in 2025. Supply uncertainties to linger China's removal of a 13pc tax rebate on UCO exports in December has meant uncertainty about UCO supply to Europe, with expectations of resulting higher prices for Chinese products in 2025. A good share of Chinese UCO will be retained for domestic use, particularly for production of SAF, which may offer a high-value alternative outlet and can still be exported to Europe without the application of anti-dumping duties , unlike biodiesel and hydrotreated vegetable oil (HVO). European imports of UCO from China had already declined by around 70,000t on the year in the January-September 2024 period. This was primarily driven by the closure of arbitrage, after attacks on shipping through the Red Sea led to elevated freight costs. UCO exports from key supplier Indonesia to Europe fell by around 36pc on the year to 89,000t in January-September due to increased domestic consumption driven by inland mandates, export duties , and domestic obligations . There may be some relief for European buyers that look for Chinese UCO in 2025, but the outlook is murky. Trade flows shifted away from Europe in 2024 with significant amounts of Chinese UCO moving to US HVO buyers at the expense of flows elsewhere. US buyers are waiting for clarity on the Inflation Reduction Act's carbon-intensity-based 45Z credit and this, coupled with Donald Trump's victory in the US presidential election and the potential for trade tariffs, has hit commerce on the route. Additionally, a potential reduction in the carbon intensity of soybean oil for use in the US biofuels complex may decrease demand for Chinese UCO. This could free up supply for European buyers once more, somewhat balancing the likelihood of increased domestic UCO demand in China. New suppliers step in European trade with suppliers from Latin America, the Middle East and some southeast Asian countries picked up in 2024. Imports from Chile, for example, increased fourfold in January-September 2024 compared with the same period of 2023 and should grow further now trading relationships are established. But it is unlikely that collectively these regions can fully compensate for a decline in Chinese product. UCO imports from China and major southeast Asian markets such as Indonesia and Malaysia remain a critical component in Europe's supply-demand balance, particularly in the face of rising domestic mandates and new policy ambitions such as the most recent iteration of the Renewable Energy Directive (RED III) and aviation and maritime targets. Tight supply and robust demand sent the Argus UCO fob ARA range spot price assessment to a more than two-year high of $1,210/t in early December 2024. Trade of cash-settled futures linked to this benchmark is tentative, with contracts changing hands out to the end of the first quarter of 2025, but market participants are more tentative into the second quarter. By Anna Prokhorova Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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