Europe makes legislative push for aviation transition

: Biofuels, Oil products
20/09/30

Interest in cleaner alternatives to jet fuel is being stoked by the EU's push to reduce carbon emissions by 55pc by 2030 compared with 1990 levels.

A raft of new country-level emissions and blending legislation is being met by plans to increase production of biojet, or sustainable aviation fuel (SAF), which could lead to a narrowing of the currently huge price premium that SAF commands over fossil-based jet fuel. But the success of this part of the energy transition will depend in part on demand for air travel recovering from the heavy blow landed by the Covid-19 pandemic.

The European Commission launched a consultation in March with the aim of introducing measures to promote the decarbonisation of the aviation sector. It proposes the introduction of a 1-2pc EU-wide blending quota as well as the revision of the 1.2x multiplier component for SAF under the recast Renewable Energy Directive (RED II). The commission has tentatively scheduled SAF legislation by January, but pending a decision on an umbrella quota, several countries have begun to introduce measures to reduce greenhouse gas (GHG) emissions in the sector and to promote the development of competitive biojet.

France this week proposed a 1pc SAF quota from 2022, and Germany last week published a draft law calling for airlines to increase the share of SAF of non-biogenic origin in their fuel mix to 0.5pc by 2025, 1pc by 2028 and 2pc by 2030. Paris had already proposed to increase its SAF blending target to 2pc by 2025, 5pc by 2030 and 50pc by in 2050.

In the UK, a public-private partnership called the Jet Zero Council will promote the development of biojet. Members of UK industry group Sustainable Aviation have already committed to achieve net-zero carbon emissions by 2050 and to boost SAF development.

Nordic countries are at the forefront of efforts to reduce GHG emissions from aviation. Norway will introduce a blending requirement of 0.5pc of biojet from 2020, and the new government in Finland has approved 30pc biofuels penetration by 2030. In Sweden, the government is evaluating an emissions reduction of 0.8pc from jet fuel used in Sweden in 2021, increasing to 27pc by 2030.

The growing legislative push is leading to an increase in Europe's biojet production. UK company Velocys is developing Europe's first waste-to-SAF facility, Netherlands-based biojet producer SkyNRG is developing a 100,000 t/yr aviation fuel plant at Delfzijl, and Finland's St1 will commission a 200,000 t/yr biorefinery in Gothenburg, producing HVO and biojet, at the end of 2021.

Finland's Neste — Europe's largest SAF producer, with 100,000 t/yr from its Porvoo refinery — plans to produce 1mn t/yr from 2022 at a refinery in Singapore that is under construction, and 450,000 t/yr at a proposed facility in Rotterdam from 2023.

Several European refiners have moved to accelerate a switch to biofuels production in light of prospects for a swift energy transition and because of weaker refining margins for transport fuels arising from the pandemic. Such moves are given added urgency by fierce competition from newer, lower-cost refineries in the Middle East and Asia-Pacific. Total last week said it will convert its 93,000 b/d Grandpuits refinery near Paris into a biorefinery capable of producing up to 170,000 t/yr of biojet from 2024. Swedish refiner Preem will focus on renewable diesel and jet fuel production at its Gothenburg and Lysekil refineries, after cancelling plans to install a new residue hydrocracker at the latter. BP wants to reduce refinery throughput globally from 1.5mn b/d to around 1.2mn b/d by 2030 as it ramps up its renewables and power business. And Spain's Repsol will decarbonise its 240,000 b/d Bilbao refinery, to include a net-zero emissions synthetic fuels plant that will use CO2 from the refinery along with green hydrogen generated from renewable energy.

Increased biojet availability in Europe could reduce prices, which would be necessary to promote uptake. Argus assessed UCO-based SAF (HEFA-SPK) at $2,120.99/t at the end of last week, a $1,803.99/t premium to conventional jet fuel as of 30 September.

But all this will be broadly dependent on the return of travel demand when and if pandemic-related restrictions lift. And this is unlikely to be soon. The International Air Transport Association (Iata) this week revised its traffic forecast for 2020 to a fall of 66pc in revenue passenger kilometres (RPKs), reflecting a "weaker-than-expected recovery", down from its previous estimate of a 63pc year on year drop.

By Giulia Squadrin and Florence Schmit

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25/04/14

Australian refiner Viva posts lower sales in Jan-Mar

Sydney, 14 April (Argus) — Australian refiner Viva Energy's January-March sales slumped against a year and quarter earlier, while its Geelong refinery margin (GRM) rebounded slightly despite the impact of a refinery-wide outage in January. Total sales for the first quarter of Viva's fiscal year fell on lower commercial and industrial sales, which dipped by 6pc because adverse weather impacted mining demand. Crude intake of 107,000 b/d at the 120,000 b/d Geelong refinery was up by 6pc on the quarter, but 6pc lower on the year. Viva's energy and infrastructure division was hit by a A$20mn ($12.6mn) loss after an unplanned shutdown at Geelong resulting from a power outage in January. Geelong's October-December output was affected by problems with the refinery's residual catalytic cracker unit, late crude arrivals and minor unscheduled maintenance. The GRM was marginally above breakeven levels, Viva said, despite the January outage. Tariffs imposed by the US on its trading partners have led to a fall in oil prices, which should stimulate consumer demand and support retail margins, and the firm has limited exposure to customers directly dependent on US markets, it said. Viva's upgrade to ultra-low sulphur gasoline at the 120,000 b/d Geelong refinery is on schedule, with supply expected to begin from August to meet the federal government's deadline of December this year. A proposed large-scale advanced soft plastics recycling facility to be co-developed with waste management firm Cleanaway will proceed to initial engineering phase in 2026, Viva said on 9 April. The project aims to convert waste soft plastics into food-grade recycled plastics but requires policy certainty, which is expected once details of Canberra's packaging reform, the Extended Producer Responsibility, are released. By Tom Major Viva Energy results (b/d) Jan-Mar '25 Oct-Dec '24 Jan-Mar '24 q-o-q % ± y-o-y % ± Refining intake 107,000 101,000 112,000 6 -6 Sales 288,000 298,000 297,000 -3 -4 GRM ($/bl) 8 7 12 18 -34 Viva has adjusted volumes to account for its acquisition of OTR retail group on 28 March 2024 Source: Viva Energy Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Keystone oil pipeline to restart by 15 April

25/04/13

Keystone oil pipeline to restart by 15 April

Houston, 13 April (Argus) — The 622,000 b/d Keystone crude pipeline is expected to resume service by 15 April, following a leak in North Dakota that shut deliveries last week. Calgary-based pipeline operator South Bow said the repair and replacement of the leaking section of pipe was taking place over the weekend. Once the company meets the terms of a corrective action order (CAO) issued by the US Pipeline and Hazardous Materials Safety Administration (PHMSA), it will be able to resume service. The pipeline has been off line since early on 8 April, when a leak was discovered in a rural field near Kathryn, North Dakota. An estimated 3,500 bl of crude was released but did not appear to have reached any waterways. "Keystone is targeting restoration of service and energy deliveries by Tuesday April 15, 2025, under the requirements of the CAO," South Bow said. "South Bow will require approval from PHMSA prior to restarting the pipeline." Under the CAO, South Bow must run metallurgical testing of the failed section of pipe, conduct a root cause analysis and meet other requirements. The pipeline system will also have to comply with certain pressure restrictions on Canadian sections of the line. The Keystone system is a major route for Canadian heavy crude destined for both the US midcontinent and the US Gulf coast, delivering about 15pc of the roughly 4mn b/d that the US imports from its northern neighbor. The line runs from the Canadian production and storage hub at Hardisty, Alberta, to Steele City, Nebraska, before splitting in two to head toward Illinois and the Gulf coast. Discounts for Western Canadian Select (WCS) at Hardisty to the CMA Nymex narrowed at the end of last week despite the shutdown, because of low inventories in Hardisty and open pipeline space on Canadian crude pipelines, including Enbridge's 3mn b/d Mainline system to the US midcontinent and the 890,000 b/d Trans Mountain pipeline to the Canadian Pacific coast. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico suspends Valero fuel import permits

25/04/11

Mexico suspends Valero fuel import permits

Mexico City, 11 April (Argus) — Mexico's tax authority SAT on 9 April suspended US refiner Valero's fuel import permits, the company said today. The company did not specify why its import license was suspended. "Valero is addressing each administrative observation noted in the suspension to clarify the issues. Additionally, [authorities] mistakenly stated that the company does not have valid import permits, which is incorrect since the permits are valid through 2038," the company said. When consulted, Valero told Argus it has no further information to share at this time. In Mexico, Valero holds gasoline, diesel and jet fuel import permits valid through 2038. The company is one of only a handful of private-sector companies with such permits. Shell, Marathon and ExxonMobil hold permits to import only gasoline and diesel. Valero is the leading private fuel importer in Mexico. On 9 April, its sales accounted for 10pc of Mexico's gasoline and diesel demand, according to the company. Private-sector companies started importing fuel into Mexico in 2016 after the market opened to more competition, but under former president Andres Manuel Lopez Obrador's administration, the energy ministry (Sener) cancelled dozens of fuel import permits. Valero is cooperating with the Mexican government and has recently joined a voluntary price cap agreement to keep regular gasoline below Ps24/l ($4.45/USG), the company said, adding that it "implements rigorous traceability and security controls throughout its supply chain." The company stores fuel at four private-sector terminals in Mexico, with over 4mn bl of capacity. The company is also expected to start storing fuel at the new 1.1mn bl OTM terminal in Altamira, Tamaulipas, in the near future. By Cas Biekmann Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Renovabio: Usinas alertam distribuidoras inadimplentes

25/04/11

Renovabio: Usinas alertam distribuidoras inadimplentes

Sao Paulo, 11 April (Argus) — Grandes grupos do setor sucroalcooleiro começaram a alertar clientes de que poderão deixar de fornecer etanol a distribuidoras em desconformidade com a Política Nacional de Biocombustíveis (Renovabio) e normas da Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP). As informações foram confirmadas à Argus participantes do mercado, entre traders , corretores e funcionários da área de inteligência de mercado de companhias do setor de distribuição, que dizem que as comunicações começaram no fim de março. Segundo as fontes, que falaram sob a condição de anonimato, Atvos, Evolua e Raízen teriam começado a comunicar distribuidoras inadimplentes em suas metas de aposentadoria de créditos de descarbonização (Cbios) de que elas correm o risco de não poder mais adquirir etanol via contratos de fornecimento de longo prazo, regidos pela resolução nº 946/2023 (que modificou a antiga 67/2011) da ANP. Todas as companhias citadas foram procuradas pela Argus, mas decidiram não comentar sobre o assunto ou não responderam até o fechamento desta reportagem. A movimentação das usinas vem com o fim da carência de 90 dias para a entrada em vigor de pontos da nova lei que endurece punições contra distribuidoras inadimplentes (Lei nº 15.082/2024). A norma, apesar de sancionada no fim de 2024, ainda não foi regulamentada pelo governo federal. A lei determina que o descumprimento das metas individuais estabelecidas pelo Conselho Nacional de Política Energética (CNPE) constitua crime ambiental e leve à revogação da autorização para o exercício de atividade do distribuidor, além da cobrança de multa, que pode chegar a R$500 milhões. Ela também proíbe agentes da cadeia de comercializar com essas empresas nesta situação. Mas a aplicação imediata de parte das sanções enfrenta obstáculos legais. Em resposta a questionamentos feitos pela ANP, representantes da Procuradoria Federal junto à autarquia reforçaram entendimento de que a nova lei não deve retroagir. Isso significa que sanções mais duras só valeriam para metas não cumpridas a partir do ciclo de 2025, sendo aplicadas apenas em 2026. Apesar da limitação para o enforcement imediato por parte do regulador, os grandes grupos do setor de açúcar e etanol já começaram a se movimentar para cumprir com suas obrigações legais. Segundo fontes, uma primeira medida estaria relacionada ao fechamento dos próximos contratos de fornecimento, que vão de 1º de junho de um ano a 31 de maio do ano subsequente e vinculariam o fornecimento à situação das distribuidoras compradoras. Batalha jurídica Das 160 distribuidoras com metas estabelecidas no Renovabio, 60 iniciaram o ciclo de 2025 com menos Cbios aposentados do que deveriam. Destas, 13 já entraram na Justiça contra o programa e hoje mantêm alguma decisão liminar favorável às suas causas, segundo dados disponibilizados pela própria autarquia. Raízen e Evolua, líderes do setor sucroalcooleiro no Centro-Sul, são joint-ventures entre produtores e as distribuidoras Shell e Vibra ‒ ambas em conformidade com o Renovabio e críticas às distorções provocadas por distribuidoras regionais inadimplentes. Segundo dados da ANP, as 3 maiores distribuidoras do país têm sofrido com uma perda de participação de mercado nos últimos anos, saindo de um total de 66pc em 2022 para 62pc em 2024. Parte do movimento é justificado por elas pelo não atendimento de empresas concorrentes ao Renovabio e alegadas fraudes no cumprimento do mandato de mistura de biodiesel no diesel. Neste período de 2 anos, o share somado das 5 maiores inadimplentes em Cbios avançou de 5,5pc para 6,5pc. A Associação Nacional de Distribuidores de Combustíveis (ANDC), que representa distribuidoras regionais de pequeno e médio porte, protocolou, em fevereiro, petição à ANP denunciando a atitude de alguns fornecedores de biocombustíveis de recusar a venda de produto. O grupo argumenta que "o poder de polícia cabe ao poder público" e que a atitude das produtoras "fere a defesa da ordem econômica". Na ocasião, o órgão regulador respondeu que as listas divulgadas por ela com as distribuidoras que respondem a processos administrativos sancionadores "não podem ainda ser consideradas para fins de restrição no suprimento de combustíveis", já que a nova lei dos Cbios ainda não foi regulamentada. A ANDC reclama de "falta de participação social" nas discussões sobre a regulamentação do Renovabio e no próprio comitê governamental do programa. A associação diz que, depois dessas movimentações, não observou casos de produtores de biocombustíveis negando a venda de produto para distribuidoras. Por Amance Boutin e Marcos Mortari Envie comentários e solicite mais informações em feedback@argusmedia.com Copyright © 2025. Argus Media group . Todos os direitos reservados.

Participants mostly support IMO GHG pricing mechanism

25/04/11

Participants mostly support IMO GHG pricing mechanism

London, 11 April (Argus) — International shipping organisations and market participants mostly support the global greenhouse gas (GHG) pricing mechanism approved today at the International Maritime Organization's (IMO) 83rd Marine Environment Protection Committee (MEPC) meeting, but some raised concerns. The structure approved by the IMO establishes that ships must reduce their fuel intensity by a "base target" of 4pc in 2028 against 93.3 gCO2e/MJ, the latter representing the average GHG fuel intensity value of international shipping in 2008. Emissions above this target will be charged at $380/tCO2e. The levels defined by the approved regulation are achievable, according to a market participant, who said the gradually increasing targets may allow the market to properly adapt to the transition. The International Chamber of Shipping (ICS) secretary general Guy Platten said the sector is already investing billions of dollars in 'green' technology, so the agreement gives certainty that sustainable marine fuels producers need. "The world's governments have now come forward with a comprehensive agreement which, although not perfect in every respect, we very much hope will be formally adopted later this year," he said. The European Shipowners (ECSA) secretary general Sotiris Raptis agreed the draft "is not perfect", but he celebrated progress towards a net zero emissions target, saying "it is a good starting point for further work" and pointing out that it may ensure the necessary investment in production of clean fuels. During a press briefing, IMO secretary general Arsenio Dominguez said ships operating in international waters will be obliged to comply with the regulations after adoption, despite the US' refusal to engage with the discussions . Adoption of the pricing mechanism will be discussed and voted on in October. Offering a counterview, the Global Maritime Forum said the agreed measures may not be strong enough to reach IMO targets. "The GHG intensity targets create uncertainty as to whether the strategy's emissions reduction checkpoints for 2030 and 2040 will be met," it said. "As currently designed, measures are unlikely to be sufficient to incentivise the rapid development of e-fuels such as e-ammonia or e-methanol , which will be needed in the long run due to their scalability and emission reduction potential." It said that failure to invest in these fuels would put at risk the target of at least 5pc zero- and near-zero emission fuel use by 2030 and the industry's entire 2050 net-zero goal. The World Shipping Council's vice president Bryan Wood-Thomas praised the agreement and said one benefit of it is the pricing system that is "more aggressive" if a vessel fails to meet the GHG intensity standard. "But you also have a fee system that gives investors more confidence in actual revenue [from using cleaner fuels]," he said. The Brazilian representative told Argus the fact that some countries thought the agreement was too ambitious while others indicated it was not ambitious enough show the group may have reached a balance that can be possible to comply. About the Brazilian position, the representative said the country "was never against an agreement". "We were only against some aspects of the agreement, and we think that the membership has heard our concerns, and that's why we ended up pretty happy with the results", he said. Brazil voted in favour of the agreement today. By Hussein Al-Khalisy, Madeleine Jenkins, Natália Coelho, and Gabriel Tassi Lara. Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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