EU extends Swedish biofuels tax exemptions to 2030

: Biofuels
20/06/30

The European Commission has approved Sweden's extension of tax exemption measures for certain biofuels used for heating or as motor fuel, until 2030.

Under two different schemes, Sweden exempts biogas used in heat generation and biogas used in motor fuel from energy and CO2 taxation. The commission's decision approves prolonging both schemes for 10 years, with two modifications: the tax exemption will only apply to non-food based biogas and it will be extended to include non-food based bio-propane.

The move represents a success for Sweden's bioenergy association Svebio, which last month rejected the government's proposal to introduce a tax on biofuels. The government in April proposed abolishing the exemption from energy tax and CO2 tax for taxable biofuels for heating, other than biogas. Svebio said it should request an extension of the tax relief approval for biofuels for heating and transport, and for biogas and hydrotreated vegetable oil (HVO).

The commission's decision has been welcomed by several public transport operators in Sweden, where many buses run on biogas.

The commission said that it found the exemptions were necessary and well-suited to stimulate production and consumption of domestic and imported biogas and bio-propane without distorting competition in the single market.

By Daniel Mackay

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24/11/14

Advanced Fame ARA marine biodiesel blends hit 2024 lows

London, 14 November (Argus) — Marine biodiesel blends comprising Advanced Fatty acid methyl ester (Fame) 0 hit their lowest prices so far this year on 13 November, according to Argus assessments. Calculated B30 Advanced Fame 0 dob ARA prices fell by $15.05/t to $654.79/t, the lowest since 14 December 2023. Calculated B100 Advanced Fame 0 dob ARA values tumbled by $70.60/t to $922.79/t, their lowest since 29 December 2023. The calculated dob ARA range prices incorporate a deduction for HBE-Gs. These are a class of Dutch renewable fuels units, or HBEs, used by companies that bring liquid or gaseous fossil fuels into general circulation and are obligated to pay excise duty/energy tax on fuels. The sharp drop in blend values came despite firming prices in Advanced Fame 0 fob ARA range values, which rose by $11.50/t to $1,481.25/t on 13 November — their highest since 8 July. Fossil markets also rebounded from recent drops that day, with front-month Ice Brent crude futures and gasoil futures contracts edging higher by 16:30 BST. Market participants had pointed to sluggish demand for European marine biodiesel blends in recent sessions, which may have added pressure on Advanced Fame 0 blend prices. HBE-G values have soared, weighing on the blend values for which it is accounted as a deduction. Prices for 2024 HBE-Gs had almost doubled on the month at €18.75-18.95/GJ by 13 November, up from €9.70-9.90/GJ four weeks prior. Market participants attributed the increase in 2024 prices to recent gains in European hydrotreated vegetable oil (HVO) prices, tight supply because of a decline in tickets from biofuels used in shipping and less overall biofuel blending in the fourth quarter. HBE-Gs surpassed the like-for-like cost physical blending of HVO class IV by 13 November, albeit marginally, which could encourage physical blending. But high demand in a tightly supplied market in the Netherlands is continuing to drive HVO prices higher. The supply tightness is the result of a combination of fewer imports, with provisional anti-dumping duties in place on Chinese volumes, and some production problems. Italy's Eni confirmed on 7 November that it has halted output at its Gela HVO unit on Sicily, for planned maintenance. Finnish producer Neste said it stopped production at its plant in Rotterdam because of a fire on 8 November. France's TotalEnergies said that the shutdown of unspecified units at its La Mede plant would result in flaring on 8 November. By Hussein Al-Khalisy and Evelina Lungu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Singapore bunker sales jump 19.5pc in October

24/11/14

Singapore bunker sales jump 19.5pc in October

Singapore, 14 November (Argus) — Bunker fuel demand at the port of Singapore rose by 19.5pc on the month to 4.8mn t in October, supported by stronger enquiries from shipowners. It takes total bunker consumption at the port to 45.3mn t in the first 10 months of the year, putting Singapore on course to break last year's record high sales of 51.8mn t. The latest statistics release from the Maritime and Port Authority of Singapore (MPA) show consumption of both conventional and alternative marine fuels rose strongly last month as more ships refuelled in Singapore. Bio-bunkers and B24 demand hit a new record monthly high of 116,200t, taking the total for January-October to 586,500t. Consumption has already exceeded last year's 518,000t, driven by shipping emissions compliance requirements set by the EU and IMO. Demand for B24 is expected to steadily rise in the coming months ahead of the implementation of the FuelEU regulations from January 2025. Demand for LNG as a marine fuel at the port of Singapore increased by 37pc from September to 50,600t in October, which was also a new record high for monthly consumption. "In general, we are seeing bigger enquiries in the last month or so," said a London-based trader. Sales of very low sulphur fuel oil (VLSFO) in Singapore rose by 11.8pc from September to 2.5mn t last month, while high-sulphur fuel oil (HSFO) consumption jumped by 11pc to 1.8mn t. By Mahua Chakravarty Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California RD plant signals later start up

24/11/12

California RD plant signals later start up

New York, 12 November (Argus) — An long-delayed project to convert a Bakersfield, California, oil refinery to produce renewable diesel (RD) has been given another extension for start up. Global Clean Energy Holdings, working to open a 15,000 b/d RD refinery, and trading house Vitol agreed last week to adjust the terms of a supply and offtake deal singed in June. The initial agreement said that Vitol could exit the agreement if the refinery was not producing at least 5,000 b/d of renewable diesel by the end of October, but that deadline has now been moved to 15 December. Global Clean Energy told Argus last month that it still has "plans in place to complete the remaining work and start up the facility" despite recently cancelling an agreement with its principal contractor. Vitol, after an initial three-year term, can now request up to three one-year extensions of the contract, up from two in the initial deal. The agreement, which cleared the way for former business partner ExxonMobil to exit, stipulates that Vitol will be the exclusive supplier of feedstocks to the plant and exclusive marketer of all fuel and environmental attributes. The revised agreement also says that if Global Clean Energy modifies its credit agreement to allow for more than $330mn in debt financing, then the renewable fuels producer will have to pay Vitol an additional fee that increases as more funds are borrowed. Global Clean Energy declined to clarify whether it had already triggered the obligation to pay Vitol the excess fee, saying that it could not provide more information ahead of filing its quarterly investor report "in the near future." If the plant begins operations as planned, it will have to contend with a challenging investment environment for biorefineries given recently low environmental credit prices and uncertainty around how president-elect Donald Trump will enforce a new federal clean fuels tax credit. At the same time, California regulators agreed last week to update the state low-carbon fuel standard, including by setting stricter carbon intensity targets that start next year. The regulatory updates lifted the prices of credits used for program compliance, which are a crucial source of revenue for companies bringing lower-carbon fuels like renewable diesel into the state. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Q&A: Low-carbon marine options to grow: Baseblue

24/11/11

Q&A: Low-carbon marine options to grow: Baseblue

New York, 11 November (Argus) — With marine fuel greenhouse gas emissions regulations tightening, ship owners are looking for financially feasible low-carbon fuels to add to their marine fuel repertoire. Argus spoke with Dionysis Diamantopoulos , head of alternative fuels at bunker supplier and trading firm Baseblue, about ship owners' options. Edited highlights follow. Do you expect onboard CO 2 capture and storage technology to become more important in the next five years? The big question for carbon capture technology is the storage capacity for the seized CO2. For example, if an available technology only allows 200t of CO2 to be captured on a voyage for the full capacity of CO2 tanks, then if we take into account that 1t of fuel produces on a tank-to-wake assessment context 3.2t of CO2, this means that after burning 62.5t of fuel oil/gasoil on the vessel that would fill the entirety of the storage capacity of the carbon capture equipment. Considering that this consumption could be a 2-3 day sail for some vessels running on 30-plus day voyages, the proportion of time "online" and "offline" of this technology would be inefficient. In addition, questions over the development of carbon capture technology is dependent on the availability of infrastructure worldwide to collect the captured CO2. If a vessel calls at, say, Brazil and then west Africa, and has a full carbon capture tank from the second day of the voyage and cannot discharge the captured CO2 at a west African port, we have further "offline" time of the capture technology. Other questions could include the space on deck/holds and further design considerations for the carbon capture technology. In 2030 what do you expect the global marine fuel mix to look like? In the immediate future, conventional fuel will remain the front runner, followed by biofuels due to the ability of existing fleets/engines to burn them. LNG usage could also increase if orders/deliveries of new building dual-fueled vessels increase. The IEA's director, Mr Birol, said recently that he expects LNG prices to drop due to the inflow of cargoes of LNG from the US and Qatar in the upcoming year. In the years to come, we will also see more methanol dual-fueled vessels on the water, and different areas worldwide will surely develop to supply these vessels with sustainable methanol types. Ammonia will eventually join the mix after infrastructure developments and protocols have been set for the safety of bunkering procedures. Do you think that next year's FuelEU regulation will be sufficient to encourage the move to sustainable marine fuels? The reality is that we must start somewhere, and FuelEU is a solid driving factor in pushing our industry to begin incorporating alternative fuels in the energy mix. It is vital that FuelEU and EU ETS is incorporated gradually into shipping. A charge to completely eradicate emissions within the next year or so would not be reasonable, viable or achievable. This phase-in period also assists in avoiding stranded assets and global trade disruptions. To comply with FuelEU, shipowners must know each alternative marine fuel's well-to-wake (full lifecycle) greenhouse gas emissions scores, but there is a lot of confusion around these. What well-to-wake emissions would you say each fuel has? It is not a question of my own or others opinion; it is rather what can be proven with the relevant documentation, for example, from the proof of sustainability documentation that ISCC-certified suppliers can publish. This also showcases why having a proper paper trail and documentation that officially accompanies the supplies is important. If we are talking about the default values, they would be: B100 16.37 gCO2eq/MJ; B30 MGO 70.18 gCO2eq/MJ; B30 VLSFO 71.73 gCO2eq/MJ. Fossil LNG are default values based on the type of engine. For LNG Diesel DF, it is 76.13 gCO2eq/MJ. We have not yet delivered bio-LNG or bio-methanol, so we are unsure of the GHG savings. China is lagging behind Singapore in terms of biodiesel bunker (B24) sales. Do you expect Chinese biodiesel bunker demand to pick up next year? Singapore is the king of bunkering in the region and ranks as one of the largest global bunkering hubs/ports. But Hong Kong's biofuel supplies, namely B24 VLSFO, have started and have picked up. Specifically, we at Baseblue already have recurring customers who lift biofuel blends in Hong Kong. Is conventional bunker trading this year more or less competitive than last year? Conventional bunker trading this year is more competitive compared to previous years. In my opinion, this has to do with various factors. First, crude oil prices have been under pressure. Whenever prices are under pressure, smaller trading houses try to take advantage of the fewer financing needs and appear more competitive. Next, bunker trading companies have sprouted exponentially over the last few years, which is enough to increase competition. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Carbon intensity reg pivotal to biobunkers in 2025

24/11/08

Carbon intensity reg pivotal to biobunkers in 2025

New York, 8 November (Argus) — The International Maritime Organization's (IMO) carbon intensity indicator (CII) regulation will propel biofuel bunker demand in 2025 as its restrictions tighten. The CII regulation came into force in January 2023 and thus far has had a muted effect on shipowners' biofuel bunker demand. But 2025 could be a pivotal year. CII requires vessels over 5,000 gross tonnes (gt) to report their carbon intensity, which is then scored from A to E. A and B vessel scores are regarded as superior energy efficiency, while C, D and E are considered moderate to inferior scores. The scoring levels are lowered yearly by about 2pc, so a vessel with no change in CII could drop from from C to D in one year. If a vessel receives a D score three years in a row or E score the previous year, the vessel owner must submit a corrective action plan. The IMO has not established penalties or restrictions for vessels scoring D. Thus, theoretically a ship owner could have scored D in 2023 and 2024 with no consequences. Year 2025 will mark CII's third year, when ship owners whose vessels were scoring D in 2023 and 2024 will need to rethink their sustainability approach or risk getting D again and having to produce corrective actions plans in 2026. That is in addition to the ship owners whose vessels will score E in 2024. To improve its CII score, a ship owner could reduce its speed and burn low-carbon fuels, among other solutions. Biofuel is the only plug-and-play low-carbon fuel option that does not require a costly vessel retrofitting. in 2023 of the vessels 5,000 gt and over, 3,931 scored D, 1,541 scored E and 3,967 did not report scores, according to the latest IMO data ( see chart ). Assuming that the non-responders refrained from reporting to avoid sharing their low D and E scores, then the total number of D and E scoring vessels could be as high as 9,439, or 33pc of the total vessel count. The bulk of the vessels reporting D and E were dry bulk carriers at 1,853 and 641, respectively, followed by oil tankers at 743 and 349, respectively, according to IMO data. The dry bulk carrier category also had the highest number of non-responders at 1,015 vessels. The vessel classification society American Bureau of Shipping concluded that a reference case container vessel with 154,000t deadweight could see its rating improve from D to C in 2025 if it switched from burning conventional marine fuel to B25 biofuel. FuelEU, EU ETS: All bark, no bite Separately from the CII regulation, ship owners traveling in, out and within EU territorial waters will see the implementation of a new FuelEU marine regulation on 1 January and the tightening of the existing EU ETS regulation. But neither would be major driving forces behind biofuel for bunkering demand in 2025. The EU ETS will require that vessel operators pay for 70pc of their CO2 emissions next year. But even with the added cost of CO2, a B30 biofuel blend is more expensive than conventional marine fuel. In Rotterdam in October, B30 — comprised of 30pc used cooking oil methyl ester (Ucome) and 70pc very low-sulphur fuel oil (VLSFO) — with a 70pc CO2 cost added would have averaged $924/t, compared with VLSFO with added 70pc CO2 cost at $682/t, according to Argus data. In order for the EU ETS to entice ship owners to burn biofuels, at current VLSFO and Ucome prices, the price of CO2 has to rise up to $300/t. And CO2 has fluctuated from $55-$102.5/t from January 2023 to October 2024. Starting on 1 January 2025, the EU's FuelEU regulation will require that vessel fleets' lifecycle greenhouse gas intensity is capped at 89.34 grams of CO2-equivalent per megajoule (gCO2e/MJ) through 2029. For vessels which do not meet this cap, a low biofuel blend can meet the requirement. A B5 blend, comprised of 5pc Ucome and 95pc VLSFO, emits less than 89 gCO2/MJ. At this rate, albeit higher, demand for biofuels would not spike dramatically. Unlike the CII scores which apply to individual vessels, FuelEU applies to vessel pools. Different shipping companies are allowed to pool their vessels together to share compliance and meet the EU ETS emissions limits. Thus several biofuel or LNG burning vessels can compensate for the emissions generated by the majority of the older, less fuel efficient vessels burning conventional marine fuel in the pool. By Stefka Wechsler CII vessels rating Number of vessels (5,000 GT and over) Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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