According to Reuters, KPI OceanConnect is expanding its biofuel bunkering services to 120 ports globally, up from 70, as the demand for low-emission fuels grows with the upcoming FuelEU regulations. These regulations, effective January 1, 2025, will require shipping fuel emissions to be reduced by 2% initially, with a goal of an 80% reduction by 2050. Jesper Sorensen, KPI’s head of alternative fuels, highlighted that Europe leads the biofuel market, though Asia is quickly catching up.
Regulatory Impact on Biofuel Demand Growth
FuelEU Maritime regulation is driving demand for cleaner fuel alternatives by setting stringent emissions standards. Sorensen emphasized that this is the first major regulatory framework enforcing lower carbon intensity in shipping fuels, encouraging a shift towards sustainable fuel options like biofuels.
Cost and Carbon Certification of Biofuels
KPI’s biofuel options, such as the B24 blend certified by the International Sustainability & Carbon Certification (ISCC), can cut emissions by 20% compared to traditional fuel oil. Full biofuel blends (B100) offer reductions of up to 95%. However, biofuels come with a price premium, impacting their adoption despite significant emissions reduction potential.
The Price Disparity Between Biofuels and EU Emissions Allowances (EUAs)
Despite the environmental benefits, the high cost of biofuels remains a barrier to widespread adoption, as purchasing EUAs under the EU ETS is more cost-effective for many companies. This price gap has led to slower uptake of biofuels, as many operators choose allowances over biofuel adoption to meet regulatory compliance without incurring higher costs.
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Source: Reuters
