Illinois CFS will take more time

: Biofuels, Emissions, Oil products
24/03/22

Illinois lawmakers will move slowly on a proposed state low-carbon fuel standard (LCFS) as opponents target fuel costs and placing authority over the program with a state agency.

The state Senate Energy and Public Utilities Committee discussed a proposed Illinois LCFS without voting during a Friday morning hearing for which registered opponents of the legislation outnumbered supporters by more than five-to-one. Both members of the public and legislators were wary of granting substantial rulemaking authority on the concept to Illinois environmental regulators.

Lawmakers had delayed a previous hearing and committee vice-chairman and bill sponsor David Koehler (D) switched the topic on the eve of today's hearing from a voting matter to a discussion item.

"This is important stuff and we have to do it right," Koehler said. "I'm committed to doing it right, rather than doing it fast."

LCFS programs require yearly reductions to transportation fuel carbon intensity. Higher-carbon fuels that exceed annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. California, Oregon and Washington operate US LCFS markets. New Mexico lawmakers earlier this year directed its state environmental regulator to develop a program for that state.

The Koehler bill would direct the Illinois Environmental Protection Agency and Pollution Control Board to establish an LCFS requiring a 20pc reduction in gasoline and diesel carbon intensity by 2038. That direction, used in California, Oregon and, soon, New Mexico, has drawn immediate skepticism from opponents who believe those details should come from legislators who answer to constituents.

"I'm not prepared to cede that responsibility to non-elected boards," committee minority spokeswoman Terri Bryant (R) said today, summarizing concerns that have been raised from other opposed or neutral interest groups watching the bill.

The proposed law would also require consideration for low-carbon agricultural practices. Illinois hosts the largest soybean production of any state as well as an established corn and ethanol sector.

Corn grower and ethanol groups testified today supporting that idea, but not the overall bill.

"I sincerely believe that, if done right, Illinois policy could become a beacon in the Midwest of what a clean transportation standard should look like," said Dustin Marquis, president of the ethanol producers' organization Illinois Renewable Fuels Association.

Some environmental groups also registered as neutral on the language in the morning session, concerned that the proposal lacked protections against land-use changes and other environmental issues associated with agricultural-based lower-carbon fuels. Koehler said it was an issue that would be looked at in an upcoming amendment.

Trucking and fuel retail groups focused on costs based on interpretations of California's program. Truck associations chafed at exemptions for aviation and locomotive fuel, noting that the proposal could make their shipping rivals cheaper.

By Elliott Blackburn

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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.

Japan's Cosmo starts delivering SAF from Sakai refinery

25/04/11

Japan's Cosmo starts delivering SAF from Sakai refinery

Tokyo, 11 April (Argus) — Japanese energy firm Cosmo Energy has started supplying domestic sustainable aviation fuel (SAF) produced at the country's first large-scale SAF plant. This marks the first SAF delivery from the plant housed at refiner Cosmo Oil's Sakai refinery, Cosmo Energy announced on 10 April. Cosmo Energy's subsidiary Cosmo Oil Marketing delivered SAF to the Japan Air Self-Defense Force (JASDF) at the country's western Kansai International Airport on 10 April. The delivered amount should be 15 kilolitres, based on JASDF's public notice for the tender. SAF producing joint venture Saffaire Sky Energy — launched by Cosmo Oil, engineering firm JGC and biodiesel producer Revo International — produces this SAF from used cooking oil (UCO) at the plant. The firms aim to supply around 30,000 kilolitres/yr, and plan to begin delivering SAF to domestic airlines Japan Airlines (JAL) and All Nippon Airways (ANA), the US' Delta Air Lines , Finland's Finnair, and German logistics group DHL Express in the 2025 fiscal year starting this April. JASDF's acrobatic flight team Blue Impulse will use the SAF in an exhibition flight scheduled on 13 April, the opening day of Expo 2025, over the event's venue in Osaka. Separately, an explosion occurred at the Sakai refinery on 10 April, but its 100,000 b/d crude distillation unit (CDU) is still operating, according to Cosmo Oil and the local fire department. The fire department received a notice from the refinery's staff that "an explosion happened at a sulphuric acid regeneration equipment, with no fires or leaks of LPG." The refinery was heating sulphuric acid for purification when the explosion happened. The SAF plant at the refinery is not affected by the accident, Cosmo said. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Q&A: Australia’s Corporate Carbon expands ACCU trading

25/04/11

Q&A: Australia’s Corporate Carbon expands ACCU trading

Sydney, 11 April (Argus) — Australian carbon project developer Corporate Carbon has been expanding its trading capabilities around Australian Carbon Credit Units (ACCUs) on the back of growing supply and wider market maturity. Head of carbon trading Angus Robertson spoke with Argus about the latest developments in the market. Corporate Carbon is one of the biggest suppliers of ACCUs. Is it correct that the company has been issued around 15mn ACCUs, counting both fully-owned projects and partnerships, which would be around 10pc of all ACCU issuances since the scheme started in 2011? Yes, that's the approximate number. We've got around 100 projects. In terms of issuance from a mix of owned projects and offtake agreements with other developers and partners in the industry, the approximate forecast is around 3mn ACCUs/yr. We trade around that and then also have capacity to trade outside of our own projects and within the portfolio, plus operating as a trading entity in the secondary market. The company has been one of the main suppliers to private buyers, and to the federal government through carbon abatement contracts (CACs). But you are also buyers. How does that work? The increased capability of our business to both buy and sell is a reflection of the broader Australian carbon market maturing over the last few years. The beginning of the business was very much built off the back of those CACs. As that policy changed over time, allowing for the partial exiting of those CACs , obviously there's been a lot more focus on the secondary market now. We've seen a lot of trading houses, banks and other financial institutions coming into the market, and with that you get a more mature financial market. So in response to that, we've been building out our trading capacity as well as our broader commercial team over the past few years. We take a portfolio approach and we have a large inventory flow to assist with that growing demand, but there are times when we go out to the secondary market and source units on behalf of clients. You recently partnered with trading and risk management firm Ion Commodities to implement their Carbon Zero tool. How does that translate into your trading capabilities? We see Ion's solution as a really effective trading tool and portfolio management system. It reflects our readiness to operate at a larger scale. By providing those tools, it allows us to focus on the strategic goals of the business, especially from a commercial perspective. It is very much a tool for reporting purposes and the automation capabilities of the system assist with that, but it does have a bit of a flow-on effect in terms of efficiency across the business as well. Going to the market, in the short term, it seems to be all about the upcoming federal elections. Do you expect to see much price volatility within the next few weeks? Yes. As we approach the Australian federal election, we would expect there to be a degree of uncertainty, considering the difference in the two major party outcomes in terms of their take on the carbon market. We would see it as positive in either instance, but I think there is still a degree of uncertainty that should lead to perhaps a degree of illiquidity in the market. The market has been also weighed down by a strong issuance of safeguard mechanism credits (SMCs). Were you surprised with that high volume when it was first disclosed by the Climate Change Authority late last year? I think it was the general market consensus that the number was higher than initially forecast, and [ACCU] market prices definitely reflected that in the following weeks and months after those numbers were disclosed. Once the final numbers were released, I think the market had generally already priced that in by that point. Has that changed your internal outlook for when the ACCU market might see an expected shift from oversupply to undersupply? I wouldn't say our internal view has changed all that much. If the majority of that volume is now weighted towards the early years of the safeguard mechanism, policies might reflect that going forward. Now we would probably see ACCU supply as a potential restriction on the market in the short to medium term. Obviously, there's speculation around certain methods in the ACCU market, where higher forecasts were expected over the following next few years and that's now no longer the case. So probably more around supply than demand in terms of our shifted internal views, and this is more from a trading and market perspective as opposed to our actual projects being affected. So it's more on the supply side than demand, even with the high SMC issuances? Well, obviously the market has reacted to those media releases by the regulator around SMCs. So you know that's already happened — you can't really argue that now. Will there be further policy changes around the safeguard mechanism to account for that? That's a bit of an unknown, but it's definitely potential in the following years. And when you talk about supply constraints, is it mostly the delays with the development of the integrated farm and land management methodology , and potentially lower issuances from a reformed landfill gas method? Those are good examples of general delays in certain methods and the creation of new methods. So yes, our expectation is that this could be a big driver on ACCU prices in the next few years. By Juan Weik 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.

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.

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