Biofuels for Shipping: Highlights from Argus Green Marine Fuels Panel Discussion

Blog Article - Jul 7, 2023

During the discussion, Oguz highlighted TotalEnergies Marine Fuels’ latest developments and investments in the fast-emerging biofuels market in front of a global audience from across the shipping industry.

On talking about TotalEnergies Marine Fuels’ approach to supporting the shipping industry on its road to decarbonization, Oguz commented:

“Certainly we aspire to be at the forefront of a rapidly changing global bunker industry as it develops the sustainable marine fuels that shipping needs to reduce greenhouse gas emissions.

“The future of shipping will undoubtedly be multi-fuels; and we are developing a suite of sustainable marine fuels that will provide short - and long-term solutions to a broad spectrum of shipping clients.

“Our aim is to leverage our size and global resources our parent company TotalEnergies to move fast to meet our customers’ needs,” said Oguz.

When asked what type of bio-feedstocks are environmentally sustainable and available for the shipping industry, Oguz shared insights in the investments and developments being made globally by TotalEnergies and TotalEnergies Marine Fuels.

“We have undertaken several trials and developed a sustainable supply chain to offer biofuel bunkers in Singapore.

“Our current biofuel solution lies in second-generation UCOME-based (Used Cooking Oil Methyl Ester) and FAME (Fatty Acid Methyl Ester) as they are *ISCC-certified, complying with the EU RED.

“Why these bio-feedstocks? They are tried and tested – and are proven to work. We have invested a lot in terms of research and development within our own research & technology centre in France (TRTG). Our extensive bench tests (CReS) with marine engines within our own facilities means we have proven their performance long before they come to market as a commercial solution.

“Our colleagues from the additive and special fluids business units have also developed a special additive helping the biofuels resist oxidation and corrosion whilst improving filterability.

“Of course, we are not standing still in terms of biofuels research and are looking at new bio-feedstocks including wood and tyre pyrolysis oils and crude algae oil – but these are still at the early developmental stages.

“Certainly, as we see the uptake in demand for biofuels, what is vital is the investment in a sustainable supply chain and that is something we are doing proactively.”

Oguz was then asked to share his thoughts on whether biofuel bunkering is feasible without government subsidies and could regulations increase visibility and encourage the uptake of marine biofuels?

“We do believe subsidies will disappear and yes biofuels are feasible without them, and we are seeing this in our own operations.

“Increasing numbers of operators are talking to us about biofuel solutions that are not driven solely around government subsidies, so we believe there is a growing appetite for biofuels in their own right

“UCOME is no longer in the Annnex IX Part A of the **EU RED, and this shapes the market a little. My opinion is that at some point, the shipping industry will have to pay for the real value of biofuels without the support of subsidies.

“Will uptake increase? Yes – our move into marine biofuels has been decisive; just 9 months after our first trials in Singapore, we commenced a term contract with a major shipping company and are able to offer a marine biofuel commercially in Singapore.

“After our Singapore launch, we have pioneered biofuel bunkering in France this year with the successful bunker of a TotalEnergies-chartered tanker – the first biofuel bunkering trial in France - followed by a Corsica Ferries passenger ship which we bunkered with 100 tons of biofuel, composed of gas oil (MGO) and 30% of biomolecules produced from waste cooking oils and certified by ISCC.“

 

When it came to the question of whether regulations could increase biofuel visibility and demand, Oguz added:

“For shipping to look at biofuels more seriously, there will at some point be a need to have more pressure placed against the use of fossil fuels. Ultimately, there is likely going to be a tipping point where the price difference between conventional fuels and biofuels will reach a position where there is no commercial incentive to burn fossil fuels.

“Aligned to this, the IMO has decided to adopt the Paris Agreement objectives and has set itself a climate ambition supported by several instruments including:  

• An ambition to bring the sector’s total emissions down by at least 50% by 2050 (from 2008). 
• A mandate since 1st January 2023 that requires all ships to calculate their attained Energy Efficiency Existing Ship Index (EEXI) to measure their energy efficiency and to initiate the collection of data for the reporting of their annual operational carbon intensity indicator (CII) and CII rating 
• Introducing new rules in Europe, on alternative marine fuels and fuel infrastructure as part of “Fit for 55 in 2030 package", which is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels in line with the European Climate Law.

“This includes: 

• Bringing the shipping sector into the EU ETS (Emissions Trading System) from 2024 
• A proposed new regulation—FuelEU Maritime—relating to the use of alternative low carbon fuels (planned for 2025). 
• The establishment of Emission Control Areas (ECAs), in which stricter controls were established to minimize sulphur emissions from ships which the Mediterranean Sea will join in 2025. 

“There may also be a point in the future where biofuel prices are impacted positively if other markets currently using them (eg transport) move to other forms of energy usage – for example in the shape of electric cars/trucks.”

 

The discussion then turned to what incentives are needed to foster investment and reduce costs in increasing the scalability of biofuels, enabling Oguz to highlight the ongoing investment being made by TotalEnergies in developing robust supply chains.

 

“Biofuels could account for up to 5% of the global bunker fuel mix by 2030 and for leading ports, such as Singapore, this percentage could go way above due to its competitiveness and proximity to sources of biomass in the region.

“We are proactively investing time and money into developing supply chains to ensure our presence in these new markets is firm so that we serve our customers reliably and safely around the world.

“Collaboration is critical to ensure the future fuels mix is available at scale, so we are an enthusiastic partner in a large number of joint initiatives and international associations including recent projects that TotalEnergies Marine Fuels has undertaken with Jurong Port Universal Terminal (JPUT) and the Global Centre for Maritime Decarbonisation here in Singapore from an infrastructure and traceable biofuel framework perspective.

“Our position as a key bunker supplier in the world’s largest bunkering hub provides the platform for us to cater for shipping companies’ immediate fuel needs, as well as driving forward initiatives to find more sustainable marine fuel solutions through a proactive programme to test new and advanced biofuels in ships.

 

ENDS

* The International Sustainability & Carbon Certification (ISCC) is an international certification system covering all kinds of bio-based feedstocks and renewables catering to energy, food, feed, and chemicals sectors.

**The renewable energy directive is the legal framework for the development of renewable energy across all sectors of the EU economy, supporting clean energy cooperation across EU countries. Read more here: https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-targets-and-rules/renewable-energy-directive_en