The Biofuels Report: The top 5 highlights from Singapore Argus Biofuels and Feedstocks conference

Josefine: Hello and welcome to the first episode of this new series, the "Biofuels Report," in which we will discuss all exciting things biofuels. This new series is brought to you by Argus Media, a leading independent provider of energy and commodity price information. With the world becoming greener every day and the fast developments in the market, we wanted to have a dedicated space to cover the renewable biofuels market, from finished fuels like ethanol, renewable diesel, to feedstocks and to credits. With this new podcast series, we will share regularly insights from the world of biofuels. My name is Josefine Ahlström, European VP Business Development at Argus Media. Last week, we attended the Argus Biofuels and Feedstocks Conference in Singapore, which attracted 450 attendees from across the world, meaning there were some really interesting and good discussions at the presentations and on the sidelines in meetings. Our first guest here for this very inaugural episode is Sunita Sharma, VP of oil products, and Lauren Moffitt, deputy editor for "Biofuels," both based in Singapore. So I have the pleasure today of having them with me to share their top five highlights from the conference. So a big welcome to Sunita and welcome, Laura. So let's get started. Sunita, tell me, what was your first key takeaways from last week?

Sunita: Hello, everyone. Thanks for listening. A definite highlight for me was the breakfast panel I moderated on the first day, "Rise and Shine with Leading Women in Biofuels." I had four incredible panelists talking about women in energy, Carrie Song from Neste, Judy Wong from EcoCeres, Jing Xieng from GoodFuels, and Xiaoyue Chen from CEPSA, who were all very generous with sharing their views and experiences. We also had a lovely audience that was not at all shy about asking questions or commenting. And I'd like to say that the men were as participative as the women, which was really good. Let's start at the panel asking if it was possible that there were fewer women in biofuels because this was a follow-on from the gender gap in STEM subjects. We know that more men study science, engineering, technology, and mathematics than women, right? From personal experience, I know that for many years, people assumed I had trained as a chemical engineer because I could talk about oil and refining. But right off the bat at the panel, this theory about STEM and gender gap was completely, completely debunked. Our panel had professionals with backgrounds in international relations, accounting, and double English. And I think it was Xiaoyue who pointed out that energy companies now actively seek to hire graduates from different disciplines. It was also good to have a very honest conversation about imposter syndrome. I think we agreed that supportive management, male or female, makes all the difference. And we put that elephant in the room, DEI, out there. And I think Judy tackled that head-on, pointing out that the industry doesn't like greenwashing and it shouldn't DEI washing either. We need to find out how to attract and equally importantly, retain female talent so as to build an effective pipeline to board positions, for example. Phil Moore from EcoCeres made a very good point about older women with a great deal of experience. How do we get them back in the industry? Several people have reached out about a women in biofuels mentorship program. Please can I ask this audience, male or female, to contact me if you have interest in mentoring or being mentored and we will see what we can do. Josefine: Thanks, Sunita. I was there and I can say it was definitely a great vibe and energy in the room during this women's breakfast panel. Lauren, over to you. Any thoughts, any sort of key takeaways from your side?

Lauren: Thanks, Josefine. So a key theme we had from the markets was changing trade flows and increased traceability for biofuels and feedstocks. So that's number two on our list. With the EU's anti-dumping investigation going on into Chinese biodiesel, Chinese biodiesel producers are looking for alternative export markets and that's why we've been seeing on the one hand such interest in the use of biofuels in alternative marine fuels. So I think Argus' marine fuels morning on the second day of the conference saw a great turnout for this reason. And in our marine fuels editor, Mahua Chakravarty's presentation, we saw that B24 blended bio marine fuel, which we assess DOB here in Singapore, remains the most competitive alternative marine fuel after LNG. And bio bunkering in Singapore and Rotterdam has risen rapidly to over 1 million tons in 2023. So it's progressing quite quickly. We also had a lot of conversations around alternative export markets and heightened traceability for UCO, or used cooking oil. So many Chinese and Southeast Asian UCO exporters were there at the conference and looking to build relationships with buyers in the U.S., which has grown to become a key export market for the feedstock from Asia. And with this, then, tighter traceability requirements for suppliers selling into the U.S. market remains a big challenge for Asian suppliers. But we are seeing more of them working out how to meet these requirements and had quite a few traceability solutions providers represented at the conference, which was great to see. Another regulatory change on feedstocks that got a lot of attention from participants was Indonesia's considering bringing in a tiered export duty on palm oil, similar to what they already has in place on other palm oil products. So this could drastically raise export prices when it comes in. But participants we spoke with at the conference generally agreed that it won't come in until October once the new president has come into office in Indonesia.

Josefine: Thanks for that, Lauren. One item I noted that was prominent in the discussions at the conference was regional mandates in Asia. Sunita, can you please elaborate on this and why it is attracting such interest, particularly on SAF sort of on the aviation side?

Sunita: Sure. We had the Civil Aviation Authority of Singapore speak at the conference about the 1% SAF regulation that will kick in from 2026. And I think they have done this brilliantly, imposing a passenger levy of between $3 and $16, depending on distance and class of travel, which is less than a cup of coffee at the airport sometimes. If you look at the various levies and surcharges that make up your airfare, this is probably very small. Of course, now that Singapore has done this, the question is, who is next? We are expecting that neighboring Malaysia will be taking a cue from Singapore and we should probably expect that they will do a very low SAF percentage by 2027. Supply-wise, it's not going to be a problem for Malaysia to use SAF. They have the PETRONAS project at Pangorang awaiting FID approval probably before India. We have PETRONAS able to co-process at the Malacca refinery. And of course, there's EcoCeres looking at Malaysian production end of next year. Singapore is the SAF supply source, including Neste. And we see some other Malaysian projects on the drawing board in Johor and Negeri Sembilan, but these may be further out. The other big one we are watching is Australia, where a lack of policy so far has put the brakes on investment. We expect that there will be some form of policy announcement in May, maybe mid-May, around renewable fuels, possibly targeting the development of a domestic renewable fuels industry and a possible SAF usage policy. I do wonder if it will be cheaper for Australia to import from Asia, for example, as they do with fossil fuels. We all know that Australia is blessed when it comes to feedstocks, truly the lucky country, as they say. And it will be interesting to see how that counters the higher cost of manufacturing there. Josefine: What about other feedstocks? I mean, Asia-Pacific region, as you know, is critical for sourcing feedstocks, not just for the local region, but also for Europe and increasingly the US. Any thoughts on this, Sunita?

Sunita: Staying with Australia, we know that Australia is a major tallow exporter, but what we have heard a lot of interest in recently is canola. Australian canola production is going up. The expectation is that they will export over 5 million tons of canola this year. Should Australia get over the food versus fuel argument? Is that something they will look at? Canola crush capacity in Australia has gone up, but not by much, and it limits how much oil they can produce. So that may be something for Australia to consider. Of course, if you are in Asia, then there's no getting away from palm, but it's still a question of, "Will they, won't they?" There was plenty of talk on the sidelines of the conference about whether Asia will use palm. The three largest palm oil producers in the world, Indonesia, Malaysia, Thailand, in that order, are in Asia. Between them, they have a combined population of nearly 386.5 billion people. Just those three Asian countries are nearly the size of the entire U.S. population, and they are rapidly urbanizing, getting richer, using more energy. South Korea and Japan are heavily invested in these countries, and Singapore has said that they will not rule out palm as a feedstock. We know that seven of the ten most heavily utilised air routes in the world are in Asia. Will there be an intra-Asian acceptance for palm, perhaps? Definitely worth keeping a close eye on.

Josefine: Thanks, Sunita. But Lauren, over to you. What did you pick up on feedstock? Anything else?

Lauren: Yes, I agree with Sunita. I also heard a lot of discussions around palm oil and its potential as a biofuel feedstock. A lot of the panels and presentations, including from our own consulting manager, John C. Richardson, touched on the feedstock bottleneck and how there's currently insufficient eligible feedstock to meet growing demand from biofuels in the next decade. So palm oil is likely to play a role, especially for regional Asian mandates. I agree with that. So Argus is expanding our palm oil coverage, and the last day of the conference, we had our oil and chemicals reporter, Carolina Palmer, present on Argus's month ahead palm oil forecasting and data science studio services, which anyone listening can get in touch to learn more about. But there really isn't going to be one solution to solving the feedstock bottleneck. And I thought it was interesting, we also heard at the conference, increasing interest from contacts in more novel eligible feedstocks like Jatropha, as well as others that have been around for a while, but we're now hearing more buyers are looking out for like spent bleaching earth oil and empty fruit bunch oil, which is another residue from the palm oil industry and of course, are both considered advanced feedstocks under the RED in Europe.

Josefine: Thanks. And finally, on SAF, I mean, Sunita, you've been doing a lot of work in this area. And I know you had a lot of very interesting discussion at the conference on this topic and also have some exciting news to share on this topic. Can you give it a shout-out for what is going on there?

Sunita: We come to number five on our list, SAF blends. We have seen a lot of interest in Argus assessing SAF blends on a Singapore basis. SAF blend assessment, 10% SAF for instance, shows you what it would cost you to have 10% SAF in your jet fuel cargo. We get the FOB Singapore jet fuel assessment from our refined products report, the Asia-Pacific products report or APPR and the FOB Singapore SAF assessment from the Argus Biofuels Report to calculate the blend assessment. We will be publishing assessments for a 1% SAF blend, a 10% SAF blend, and a 30% SAF blend to start as soon as next month. And we would be able to provide historical data for these assessments going back to December 2020. So why did we pick these particular blends? The 1% SAF blend is targeted at Singapore clearly, but also with a view to neighbouring countries set to introduce usage at similarly low levels. But we also introduced the 1% SAF blend to give companies and government agencies an idea of exactly how much using SAF at this level will cost them, which is less than they imagine usually. I've lost track of the number of times someone, usually a government agency, tells me they cannot use SAF because it is three to five times more expensive than jet fuel. Sure, it is if you're using 100% SAF. But if you're using 1% SAF, then it's just over $20 a tonne. We are introducing a 10% SAF blend assessment based on what airlines have targeted by 2030 and a 30% blend as we see refiners sell higher SAF blends. Airlines with volume targets, 5000 tonnes SAF a year for example, may be quite happy doing fewer flights with a higher percentage of SAF rather than spreading the SAF commitment over each flight. So we are seeing higher SAF percentages being sold. Very happy to have a chat about these new assessments or anything biofuels related. So please reach out should you want.

Josefine: Thanks a lot, Lauren and Sunita, for these insights. Very interesting listening. Before we sign off, I would also say a big thank you to everyone who attended the Singapore conference and we hope to see you again next year. And for those who missed it, we hope to meet you next year as well. We are aiming for April and we'll revert shortly with the exact dates for the next conference. And of course, thanks for listening to this new episode. And if you enjoyed this podcast, please be sure to tune in for other episodes in our series, the "Biofuels Report." We have an exciting episode coming in the next couple of weeks with an extended guest from Brazil who will share their views on waste-based ethanol. So for more information on August Biofuels coverage, please visit our all products commodity page. And thank you and see you next time. Bye-bye.