Sweden to up biofuel mandates again after slashing them

: Biofuels, Oil products
24/08/28

Sweden's government announced that the country will raise its greenhouse gas (GHG) reduction obligations to 10pc for gasoline and diesel from 6pc, with changes due to come into effect on 1 July next year according to Swedish bioenergy association Svebio.

The country announced in May last year that it was planning to lower GHG reduction mandates for 2024-2026 to 6pc for both diesel and gasoline, from 30.5pc for diesel and 7.8pc for gasoline in 2023. The government at the time said this was because higher GHG reduction targets in Sweden, compared with the rest of the EU, were pushing diesel prices up at the pump.

The biofuels industry in Sweden welcomed the new 10pc mandate, as it will support domestic demand for its fuels. The drop in Sweden's mandates to 6pc had a significant effect on domestic biofuels usage and wider biofuel prices in Europe, particularly hydrotreated vegetable oil (HVO). Because fatty acid methyl ester (Fame) biodiesel has a 7pc physical blend wall into diesel under the EU Fuel Quality Directive, Sweden relied on drop-in HVO to meet its high diesel mandates.

As a result of the 2024 mandate cuts, HVO deliveries were down by 95pc on the year in June and total biofuels deliveries were down by 79pc in the same period, according to data from government data provider Statistics Sweden. Lower mandates in Sweden cut domestic HVO demand, redirecting supplies to the wider European market, pushing values down as a result. Prices for HVO Class II fob ARA range, made from used cooking oil, were down by $715.42/t year on year, or 31.5pc, on 27 August.

Tomas Ekbom, programme director at Svebio, told Argus that Sweden's government understood it could not rely mainly on the electrification of the transport sector to meet targets and that biofuels had a larger role to play. He added that the government likely also considered that it would be too costly to pay for credits if, in the end, EU targets were missed.

Sweden's government estimates that the country will meet its Effort Sharing Regulation commitments for 2030 — a binding emissions reduction target for domestic transport (excluding aviation), buildings, agriculture, small industry and waste of 50pc compared with 2005 levels — by implementing this new 10pc reduction obligation, as well as a new climate action plan.

But the parliament previously abolished GHG reduction levels for 2027-2030, taking a wait and see approach. And ministers did not include any plans to scale up the mandated levels from 10pc. The re-cast Renewable Energy Directive requires a 14.5pc GHG reduction target, or 29pc share of renewables by energy content, for transport fuels by 2030.

Sweden's new obligation will allow fuel suppliers to credit electricity from public charging stations towards meeting their emissions reduction obligations, but how this will work in practice remains unclear. Last year, battery electric vehicles were 5.75pc of Sweden's total passenger car fleet and plug-in hybrid electric vehicles were 5.37pc of the fleet, based on data from the EU's alternative fuels observatory.

Sweden will also include a proposal in its 2025 budget to reduce fuel taxes to reduce impact on fuel prices at the pump. The gasoline tax will be reduced by 0.75 krona/litre ($0.07) next year while the diesel tax will be increased by 0.11 krona/litre ($0.01) — the EU minimum.

By Simone Burgin

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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.

Q&A: IMO GHG scheme in EU ETS could be 'challenging'

25/04/11

Q&A: IMO GHG scheme in EU ETS could be 'challenging'

London, 11 April (Argus) — Delegates have approved the global greenhouse gas (GHG) pricing mechanism proposal at the International Maritime Organization's (IMO) 83rd Marine Environment Protection Committee (MEPC) meeting. Argus Media spoke to ministerial adviser and Finland's head representative at the IMO delegation talks, Anita Irmeli, on the sidelines of the London MEPC meeting. What is your initial reaction to the text? We are happy and satisfied about the content of the agreed text, so far. But we need to be careful. This week, all member states were able to vote. But in October, when adaption will take place, only those states which are parties to Marpol Annex VI will be able to vote if indeed a vote is called for, and that changes the situation a little bit. Here when we were voting, a minority was enough — 40 votes. But if or when we vote in October, then we need two thirds of those party to Marpol Annex VI to be in favour of the text. Will enthusiasm for the decision today remain by October? I'm pretty sure it will. But you never know what will happen between now and and the next six months. What is the effect of the decision on FuelEU Maritime and the EU ETS? Both FuelEU Maritime and the EU ETS have a review clause. This review clause states that if we are ambitious enough at the IMO, then the EU can review or amend the regulation. So of course, it is very important that we first consider if the approved Marpol amendments are ambitious enough to meet EU standards. Only after that evaluation, which won't be until well after October, can we consider these possible changes. Do you think the EU will be able to adopt these the text as it stands today? My personal view is that we can perhaps incorporate this text under FuelEU Maritime, but it may be more challenging for the EU ETS, where shipping is now included. What was the impact of US President Donald Trump's letter on the proceedings? EU states were not impacted, but it's difficult to say what the impact was on other states. By Madeleine Jenkins Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

IMO approves two-tier GHG pricing mechanism

25/04/11

IMO approves two-tier GHG pricing mechanism

London, 11 April (Argus) — Delegates have approved the global greenhouse gas (GHG) pricing mechanism proposal at the International Maritime Organization's (IMO) 83rd Marine Environment Protection Committee (MEPC) meeting, pending an adoption vote at the next MEPC in October. The proposal passed by a majority vote, with 63 nations in favor including EU states, the UK, China and India, and 16 members opposed, including Mideast Gulf states, Russia, and Venezuela. The US was absent from the MEPC 83 meeting, and 24 member states abstained. The proposal was accompanied by an amendment to implement the regulation, which was approved for circulation ahead of an anticipated adoption at the October MEPC. Approval was not unanimous, which is rare. If adoption is approved in October at a vote that will require a two-thirds majority, the maritime industry will become the first transport sector to implement internationally mandated targets to reduce GHG emissions. The text says ships must initially reduce their fuel intensity by a "base target" of 4pc in 2028 ( see table ) against 93.3 gCO2e/MJ, the latter representing the average GHG fuel intensity value of international shipping in 2008. This gradually tightens to 30pc by 2035. The text defines a "direct compliance target", that starts at 17pc for 2028 and grows to 43pc by 2035. The pricing mechanism establishes a levy for excessive emissions at $380 per tonne of CO2 equivalent (tCO2e) for ships compliant with the minimum 'base' target, called Tier 2. For ships in Tier 1 — those compliant with the base target but that still have emission levels higher than the direct compliance target — the price was set at $100/tCO2e. Over-compliant vessels will receive 'surplus units' equal to their positive compliance balance, expressed in tCO2e, valid for two years after emission. Ships then will be able to use the surplus units in the following reporting periods; transfer to other vessels as a credit; or voluntarily cancel as a mitigation contribution. IMO secretary general Arsenio Dominguez said while it would have been more preferable to have a unanimous outcome, this outcome is a good result nonetheless. "We work on consensus, not unanimity," he said. "We demonstrated that we will continue to work as an organization despite the concerns." Looking at the MEPC session in October, Dominguez said: "Different member states have different positions, and there is time for us to remain in the process and address those concerns, including those that were against and those that were expecting more." Dominguez said the regulation is set to come into force in 2027, with first revenues collected in 2028 of an estimated $11bn-13bn. Dominguez also said there is a clause within the regulation that ensures a review at least every five years. By Hussein Al-Khalisy, Natália Coelho, and Gabriel Tassi Lara IMO GHG reduction targets Year Base Target Direct Compliance Target 2028 4% 17% 2029 6% 19% 2030 8% 21% 2031 12% 25% 2032 17% 30% 2033 21% 34% 2034 26% 39% 2035 30% 43% Source: IMO Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Fujairah biofuel uptake lags despite EU rules push

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.

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