Biofuels look set to play a part in the future marine fuels mix – but commercial, regulatory and ethical issues will likely determine how significant their role will be, a panel of industry experts has said.
Speaking during today’s (21 January) Alternative Fuels in the Maritime Industry, a webinar organised jointly by the UK Chamber of Shipping and the International Bunker Industry Association (IBIA), industry experts gave their assessment of the potential for increased biofuels demand.
Christos Chryssakis, Business Development Manager at DNV GL – Maritime, said the classification society had seen ‘a lot of testing lately’ from shipping companies using different types of biofuels.
As previously reported, some of the shipping industry’s biggest names, including Hapag-Lloyd, Norden, Stena Bulk , UECC and Eastern Pacific Shipping, carried out sea trials using biofuels last year. And while it may be too early talk about market demand, there is certainly interest in these fuels as the sector aims to reduce its carbon emissions.
Chryssakis suggested that there were two key factors driving the development of biofuels.
‘One is expected regulations for reducing the carbon footprint in the future,’ he said, ‘but we are also seeing quite a lot of pressure from other stakeholders like the banks or the charterers.’
Chryssakis highlighted the Poseidon Principles, which were announced in 2019, and the Sea Cargo Charter, which was launched in October last year. Such initiatives, he said, had generated interest in both liquid biofuels and biogas.
Chryssakis also said these fuels had performed capably at an operational level.
‘We know that from the testing that is going on so far, the technical experience, I would say, is already very good.’
But while the quality of these emerging fuels is becoming increasingly understood and accepted, their commercial viability remains to be seen.
‘The main problems are the supply of these fuels and the price,’ said Chryssakis, who noted that ‘most of these fuels’ were becoming available at Rotterdam owing to the ‘favourable regulations’ and ‘price incentives’ for biofuels in the Netherlands which ‘makes them more attractive.’
‘But otherwise,’ said Chryssakis, ‘the price is a very significant barrier.’
It is not only economics which are hindering biofuels’ commercial prospects.
‘There are some barriers when it comes to complying with MARPOL Annex VI NOx regulations…’ said Chryssakis. ‘Vessels testing these liquid biofuels…have to apply for an exemption for a period of time to test these fuels.’
Chryssakis continued: ‘There are still quite a few things, both on the regulatory side, and also on the supply and availability side, to solve before we can start using these fuels on a largescale in the future.’
IBIA Director Unni Einemo agreed that biofuels ‘could potentially be attractive’ but alluded to some of the possible drawbacks.
‘If you get the right price and availability, it’s another fuel that can be used as a drop-in fuel with minor adjustments to existing engines and fuels systems – so it’s attractive from that point of view,’ she said.
However, also Einemo highlighted the importance of distinguishing between different biofuels and their respective operational behaviours and storage and handling properties. She also flagged the environmental credentials of these fuels.
‘Of course, if we are looking at being environmentally friendly and reducing the greenhouse gas footprint, you need to look at where those biofuels came from. Not all biofuels are particularly environmentally friendly, depending on how they’ve been produced. Have you chopped down palm forests to do it? Are you replacing food production?’
She continued: ‘But if biofuels are produced from waste or algae and from good sources, I think it is a very interesting solution.’
Einemo also highlighted a further regulatory aspect which is currently being considered and which she said, ‘will be challenging’.
Einemo said: ‘If you look at the IMO regulations, they will tend to look at the emission from tank-to-wake, not from well-to-tank,’ adding, ‘that’s a regulatory element that’s going to need a lot of work to get it right.’
In the December 2020/January 2021 edition of Bunkerspot, Lesley Bankes-Hughes considers how biofuels may fit into the bigger picture of the industry’s energy transition. Click here to read the article.
Uniper Energy and Neutral Fuels will be discussing the UAE market for marine biofuels in next week’s Middle East Bunkering Convention. To register for this free event, click here.