The authors of DNV’s white paper “Biofuels in Shipping“, Øyvind Sekkesæter, a Consultant in Maritime Environmental Technology, and Per Einar Henriksen, a Senior Consultant, explore key themes from publication.
The key drivers of biofuel markets
Drawing on in-depth interviews and written surveys with key players at the heart of the global biofuel ecosystem, including biofuel suppliers and shipowners, the DNV white paper identifies the three most important factors influencing the evolution of biofuels in shipping in the coming years: the voluntary market, greenhouse gas (GHG) regulations and supply-side constraints.
Sekkesæter says that the voluntary market is currently the primary driver of demand for biofuels in the shipping industry, as societal expectations are pushing cargo owners to reduce their Scope 3 emissions. He adds that, looking ahead, further demand will be stimulated by greenhouse gas regulations such as FuelEU Maritime and the IMO’s mid-term GHG measures.
However, he also notes that supply-side constraints, including sustainable feedstock scarcity, competition with other sectors, and logistical challenges, will limit the growth of the marine biofuel market.
Technical considerations for the use of FAME and HVO
Aside from supply and market considerations, the white paper also functions as a technical guide for prospective biofuel users in shipping. This includes an extensive analysis of both FAME and HVO, drawing on interviews with shipping companies to ascertain practicalities and formalities related to their bunkering and usage.
These fuels possess distinct properties and characteristics, and even though feedback indicates that both FAME and HVO perform well technically, their compatibility with on-board systems can vary from ship to ship,
… said Per Einar Henriksen, Senior Consultant at DNV and co-author of the report, adding that that due to FAME’s differing properties compared to standard fuel oils, some users need to replace certain components or make upgrades before using it, while others experience a seamless transition without requiring any modifications.
Key recommendations before use of biofuels
The paper outlines key considerations for using both FAME and HVO fuels, including on-board preparations, potential modifications and inspections, while emphasizing the importance of consulting equipment manufacturers to address any uncertainties.
“It is recommended that shipping companies and operators conduct thorough preparations before introducing a new biofuel, such as performing risk and feasibility assessments,” says Henriksen. “While industry feedback indicates that operating on these fuel types generally proceeds well and without significant problems, it is essential to know what is being bunkered and ensure it complies with existing fuel standards and expected operating conditions. This is particularly important as there is an increasing range of off-specification fuels being marketed today as biofuels.”
How can biofuels help achieve compliance with GHG regulations?
As shown in the white paper, the use of eligible biofuels can give significant benefits with respect to the Carbon Intensity Indicator as well as EU ETS and FuelEU Maritime regulations, including emissions reductions and a reduction in well-to-wake fuel intensity. It is also expected that biofuels meeting sustainability and other criteria yet to be specified will be credited with GHG reduction for the upcoming IMO mid-term GHG measures.
To demonstrate compliance with each regulation, relevant biofuels must be documented to meet sustainability and GHG-reduction requirements through a Proof of Sustainability (PoS) or similar documentation. Along with the PoS, other essential documents such as bunker delivery notes and annual reports (DCS, MRV and FuelEU Maritime) are required for verification by the verifier/authorities.
Biofuels as part of the future maritime energy mix
The decarbonization of the maritime industry is starting to build momentum. However, this is a complex process which will involve a range of different fuels, technologies and other measures, such as energy efficiency.
Biofuels can play a significant role in the maritime energy transition. We hope that stakeholders throughout the industry can draw on insights from this paper as they increase their uptake of biofuels over the coming years
… said Øyvind Sekkesæter.
