India mandates biogas blending in CNG, piped gas

: Natural gas, Oil products
23/11/27

India plans mandatory blending of compressed biogas (CBG) in domestic compressed natural gas (CNG) and piped natural gas (PNG) to cut its reliance on expensive imports of LNG.

Blending will initially be voluntary at 1pc for automobiles and households from the April 2024-March 2025 fiscal year and become mandatory from 2025-26, the oil ministry said on 24 November. Natural gas is mostly used in India's gas distribution network through PNG in households and CNG for automobiles.

The CBG blending obligation (CBO) will promote production and consumption of CBG in the country, oil and gas minister Hardeep Singh Puri said, adding that it will encourage investment of around 375bn rupees ($4.5bn) and help to establish 750 CBG projects by 2028-29. The CBO is to increase to 3pc during 2026-27 and to 4pc during 2027-28, after which it will rise to 5pc. A central repository body will monitor and implement the blending mandate based on operational guidelines approved by the oil minister.

The government last month launched its 12th city gas distribution bidding round offering areas in Jammu and Kashmir, Ladakh, Arunachal Pradesh, Meghalaya, Manipur, Nagaland and Sikkim states to connect to the natural gas pipeline network.

"At present about 23,500km-long gas pipeline network is under operation in the country and around 12,000km pipeline is approved/under construction," Puri had said.

India had 300 city gas distribution networks under the Petroleum and Natural Gas Regulatory Board as of August, covering 88pc of the country's geographical area and 98pc of the population.

The country has outlined plans to make India a gas-based economy, with the share of natural gas in its primary energy mix targeted to rise to 15pc by 2030 from around 6pc in 2022.

The government also aims to have 1pc sustainable aviation fuel (SAF) in jet fuel by 2027, which will double to 2pc in 2028, it said on 24 November. This would be done initially for international flights, as part of the country's effort to achieve net zero by 2070. Delhi initially targeted to have 1pc SAF blending in jet fuel by 2025, saying it would need 140mn litres/yr of SAF to achieve this.

Ethanol blending

India additionally plans to increase ethanol blending in gasoline to 20pc by 2025 as part of efforts to reduce dependence on foreign oil. Now the government is also in discussions to promote production of ethanol from maize. This comes as there has been an increase in maize cultivation area and yield per hectare in the past few years.

The government is working towards developing high-starch yielding varieties and quality of maize by removing aflatoxins, having faster registration of new seed varieties with high starch, along with a maize training programme for distillers and seed companies.

India's heavy reliance on crude imports and rising transport fuel demand have prompted the government to turn to ethanol blending in gasoline.

Indian oil companies had offered to pay more for ethanol produced from damaged food grains and maize to try to boost fuel ethanol supplies, after the government suspended production from surplus rice in July.

State-controlled upstream firm Oil India plans to set up a second-generation bio-refinery in Numaligarh to produce 50,000 t/yr of ethanol from non-food grade feedstock bamboo.

By Rituparna Ghosh

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25/04/11

Fujairah biofuel uptake lags despite EU rules push

Dubai, 11 April (Argus) — Alternative bunker fuels like biofuels have yet to gain significant traction in the UAE port of Fujairah, the world's third-largest bunkering hub, even though EU regulations such as FuelEU Maritime and the EU Emissions Trading System (ETS) are driving demand expectations. Discussions at the S&P Global Commodity Insights FUJCON 2025 this week highlighted a combination of structural and market-driven factors holding back adoption, with limited demand from key vessel types and insufficient infrastructure investment topping the list. The introduction of FuelEU Maritime, which mandates a 2pc reduction in greenhouse gas (GHG) intensity for ships calling at EU ports starting this year, alongside the EU ETS carbon pricing mechanism was expected to spur demand for biofuels in Fujairah. Many vessels refueling in the UAE hub transit to Europe, making compliance with these regulations a potential driver for alternative fuel uptake. A key reason cited is the limited presence of containerships and cruise ships in Fujairah's bunkering market. Globally, these vessel types are the primary consumers of biofuels due to their operators' commitments to decarbonisation and customer-driven sustainability demands. Fujairah's bunkering activity is dominated by bulk carriers and tankers, which have been slower to adopt alternative fuels. "Containerships and cruise ships are leading the charge on biofuels in Singapore and Rotterdam, but they are just not a big part of the mix here," said Fujairah harbour master Mayed Alameeri. "We support the use of green fuels, but without that demand pull, there's little incentive to scale up." This lack of demand has deterred investments in biofuel storage and supply infrastructure. Unlike in Singapore and Rotterdam, where biofuel bunkering is supported by dedicated facilities, Fujairah's infrastructure remains geared toward conventional fuels. "There is no single shipowner who has partnered with a supplier in Fujairah on adoption of alternative fuels," said Hafnia Bunker general manager Kasper Sorensen. "It is very difficult to make a business case for investment." While there have been sporadic inquiries from shipowners over the past year, these have been for small amounts — typically 150-200t — far below the scale needed to spur investment. "You need steady offtake to justify the capex for tanks and blending," a Fujairah supplier said. "Right now, we're not seeing it." Market dynamics also play a role. The price spread between biofuels and conventional fuels remains a hurdle, with Fujairah's B24 blend trading at a significant premium to very low sulphur fuel oil (VLSFO). Mandates need certainty The bunker market is under pressure to decarbonise as the International Maritime Organisation (IMO) targets a 50pc cut in shipping emissions by 2050 from 2008 levels. Alternative fuels are central to this goal, but regulatory disparities complicate investment decisions, industry players said. Regulatory uncertainty adds another layer of caution. While FuelEU's pooling mechanism allows shipowners to offset emissions across fleets, potentially enabling biofuel bunkering in Fujairah to count toward EU compliance, clarity on implementation is limited. Bunker market participants urged the adoption of universal standards for alternative bunker fuels, warning that fragmented regulations are hampering the shift to lower-carbon options. "Shipowners are still figuring out how to navigate these rules which are regionally divergent," said a shipping broker. "Until there's more certainty, many are sticking with what they know." Still, some market participants expressed cautious optimism. Rising inquiries, although sporadic, suggest growing awareness of biofuels' role in meeting EU mandates. "It's not a flood, but it's a trickle that could build," said a bunker trader. For now, Fujairah's biofuel market remains in a holding pattern, waiting for demand signals strong enough to shift the hub's bunkering landscape. By Elshan Aliyev Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

South Korean bitumen exports may head to southeast Asia

25/04/11

South Korean bitumen exports may head to southeast Asia

Singapore, 11 April (Argus) — South Korea bitumen exports could start entering southeast Asia in the coming months, following the recent opening of the arbitrage window between the two regions. Export prices from South Korea have declined sharply over the past week, weighed down by early-week declines in upstream crude and high-sulphur fuel oil values. A Yeosu-based refiner concluded an export tender to sell up to four May- and June-loading cargoes on 10 April, which was settled in the range of $375-385/t fob South Korea, according to market participants. Declines in fob Singapore bitumen export pricing have been slower in comparison, as continued production output cuts contributed to curtailed spot supplies. Most refiners in Singapore have fully committed April- and May-loading volumes, although several traders were still holding on to unsold volumes. In contrast, a steady supply of April- and May-loading cargoes has been made available from South Korean suppliers over the past month. One refiner previously released three export tenders in March alone, far more than the typical one per month. Arbitrage economics to export bitumen from South Korea to southeast Asia has grown more favourable, as fob Singapore premiums over that of fob South Korea values widened. Spreads between fob Singapore and South Korea widened to $42.50/t on 10 April, up from $22.50/t a week earlier. This is the widest since November 2024, when fob Singapore prices also traded at premiums of $42.50/t to that of South Korean exports. Traders who won some shipments from the recent South Korean export tender may direct some of these volumes to southeast Asia, rather than sell them to the traditional export destination market of east China. Domestic prices in east China have come under renewed pressure in the week to 11 April, undermined by consecutive day-on-day losses in the bitumen futures market. This, coupled with a weaker yuan against the US dollar, has put a dent on Chinese appetite for South Korean exports. These South Korean exports could eventually be shipped to Vietnam, where demand has been relatively more robust compared with other Asian countries, market participants said. Pricing competition in north Vietnam has intensified in 2025 on increased export supplies from south China. And with South Korean exports likely to join the fray, this could temporarily edge out Vietnam's imports of Singapore-origin bitumen. By Leanne Tan Singapore vs South Korea bitumen price spreads ($/t) Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Oil and gas lobby calls H2 'core competency,' hails 45v

25/04/10

Oil and gas lobby calls H2 'core competency,' hails 45v

Houston, 10 April (Argus) — The oil and gas industry views hydrogen production as a "core competency" and sees 45v tax credits driving US exports and innovation, according to the American Petroleum Institute (API). "We really see this, especially from the oil and gas perspective, as a core competency," said Rachel Fox, API director of policy and strategy, on a webinar Thursday hosted by ConservAmerica. "We have such an advantageous opportunity with this credit," said Fox. "When we're talking about the export opportunity, we really do hold the cards in terms of producing hydrogen at the lowest cost anywhere in the world." The 45V incentive has become a crucible in President Donald Trump's agenda to promote fossil fuels. A broad-based coalition of groups sometimes at odds with one another has coalesced in favor of 45V noting that it promotes manufacturing jobs across rural America and sets up US energy companies to dominate growing global demand for cleaner burning fuels. Nonetheless, ConservAmerica described such energy tax incentives as being "squarely in the crosshairs" as legislators gear up for budget negotiations in which the administration is looking to slash government spending to offset a promised corporate tax cut. By tying a tiered scale of incentives to carbon intensity, 45V has spurred oil and gas companies to develop technologies and practices that curb emissions, said Fox. "There's a lot of incentive to try to hit that $3 mark by getting your hydrogen produced at a really low carbon-intensity limit and so it's galvanized a ton of innovation and a ton of new ideas on how that can be done throughout the natural gas system," said Fox. Most of those ideas revolve around lowering the methane intensity of natural gas production or sourcing low-methane intensity natural gas, such as from biowaste, said Fox. Some environmental advocates are skeptical that emissions from natural-gas based hydrogen production can be driven low enough to qualify for the highest $3/kg tier with existing technology and that most oil and gas companies will instead have to use less lucrative 45Q credits that apply to carbon capture and storage technology (CCS). However, at least one major energy company, ExxonMobil, has said it is seeking 45V to advance its massive natural-gas based hydrogen and ammonia project in Baytown, Texas. By Jasmina Kelemen Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tariff concerns drive US VLSFO to 4-year lows

25/04/10

Tariff concerns drive US VLSFO to 4-year lows

New York, 10 April (Argus) — Very low-sulphur fuel oil (VLSFO) monthly averages at four US ports have declined to their lowest levels since 2021, driven by uncertainty surrounding US tariffs. Houston and New Orleans VLSFO monthly averages dropped to $470/t and $491/t, respectively, so far in April. That is the lowest average for Houston since April 2021 and the lowest since February 2021 for New Orleans. New York and Philadelphia VLSFO averages are at $498/t and $510/t, respectively, the lowest since April 2021 for New York and May 2021 for Philadelphia. Bunker market participants have had mixed reactions to the price decline so far. According to one trader, some buyers have been trying to buy bunker fuel with delivery dates for one month from now, to lock in the lower prices, rather than one week out, which is typical when buying bunker fuel in the spot market. Another market contact said they have seen a mixture of elevated buying interest but also some buyers who will hold off waiting to see if prices continue to drop or if the volatility in prices ease as there have been large price swings within the same business day. "I have not seen anything this volatile since the start of the Russia vs Ukraine war," the trader said. Oil futures went up by almost 5pc on 9 April reversing losses from early that morning after US president Donald Trump paused higher punitive tariffs against key trading partners such as the EU and Japan and increased tariffs against China. The wild swing for intraday bunker prices on 9 April , which typically traces Brent crude, lowered market demand. By Luis Gronda Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

New tariffs could upend US tallow imports: Correction

25/04/10

New tariffs could upend US tallow imports: Correction

Corrects description of options for avoiding feedstock tariffs in 12th paragraph. Story originally published 3 April. New York, 10 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a far-greater collection of charges on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Some tariffs are eligible for drawbacks, meaning that producers could potentially recover tariffs they paid on feedstocks for fuel that is ultimately exported. And multiple biofuel producers are located in foreign-trade zones, a US program that works similarly to the duty drawbacks, and have applied for permission to avoid some tariffs on imported feedstocks for fuel eventually shipped abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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