- Singapore’s biobunker demand is expected to start 2026 slowly as shipowners delay procurement amid high costs and regulatory uncertainty.
- Term contracts for 2026 supply are declining year over year, with demand recovery anticipated from Q2 2026.
- Elevated feedstock competition has pushed biobunker premiums sharply higher, pressuring fixing appetite.
- Regulatory delays at the IMO have weakened near-term confidence, despite long-term decarbonization remaining intact.
Singapore, the world’s largest biobunkering hub, is expected to enter 2026 at a slower pace, with elevated costs and regulatory uncertainty dampening demand, according to S&P Global and market participants including regional suppliers, buyers, and traders.
Demand Delays and Expected Q2 Recovery
Shipping companies are deferring biobunker procurement into early 2026, adopting a wait-and-see approach as term contracts issued for 2026 supply decline year over year, a Singapore-based supplier said. Regional regulations are expected to support a demand recovery from the second quarter, as the first quarter marks a period of compliance reassessment following deferred procurement.
“Shipowners seem to prefer taking earlier action on biofuel rather than waiting until the last minute,” a biobunker supplier said. “We can expect a surge in demand and rising prices in Q2, while Q1 acts as a preparatory period.”
Singapore recorded steady growth in biobunker demand from 2024, with strong sales in the first half of 2025 before easing in recent months. Total biobunker sales from January to November reached just over 1.27 million mt, up 63.9% year over year, according to preliminary MPA Singapore data.
Feedstock Competition Drives Costs Higher
Singapore biobunker premiums against Platts benchmark FOB Singapore Marine Fuel 0.5%S cargo assessments for B24 LSFO grade climbed through the first quarter of 2025, exceeding $200/mt for the first time in mid-March.
“It is hard to say whether next year we will see a similar trend [in demand as this year], as there is a stark increase in price this year, compared to last year when fixing terms,” a supplier said.
Platts, part of S&P Global Energy, assessed Singapore-delivered B24 and B30 low-sulfur biobunkers at $633.98/mt and $682.98/mt, respectively, on Dec. 16, reflecting premiums of $227/mt and $276/mt over the Platts benchmark FOB Singapore marine fuel 0.5%S cargo assessment.
“With UCOME now facing competition with SAF, I don’t think [term fixing levels] would go so low, unless suppliers have already locked in term contracts for UCOME,” a trader said. The trader added that low offers could still distort the market as some suppliers seek to increase supply volumes for strategic reasons.
As constraints on waste-based lipids approach, industry focus is increasingly shifting toward alcohol-based fuels. S&P Global Energy’s Horizons report identifies ethanol as a “rising contender,” noting that with favorable carbon-intensity recognition, sugarcane ethanol could undercut B30 and bio-methanol prices by 2030–2035. Major engine manufacturers including MAN, WinGD, and Wartsila have certified and trialed dual-fuel and multi-fuel engines capable of operating on ethanol, methanol, and other fuels.
Clarence Woo, managing director of GCCF, highlighted growth potential for maritime ethanol in Asia-Pacific. “In APAC, the strongest growth signals are coming from B30 and alcohol fuels (Methanol-Ethanol). Singapore is already demonstrating scale, supplying over 1.2 million mt/year of marine biofuels. Thereby, a 20 million mt/year opportunity emerges progressively towards the early 2030s, in line with the delivery of more than 1,200 alcohol dual-fuel vessels to global fleets.”
China UCOME Market Under Pressure
China’s UCOME market remained sluggish in the last quarter as biodiesel buyers wound down year-end purchasing amid weak demand from Singapore, according to a Chinese producer.
“Currently, tradable levels for UCOME are relatively low for producers, but raising offer levels would make it too high to attract buyers,” the producer said.
Near-term upside in China UCOME prices appears limited due to ample biodiesel output capacity and soft demand, a China-based trader said. Market participants expect a quiet first quarter of 2026, with Lunar New Year holidays in February likely shutting biodiesel plants for nearly two weeks and delaying a pickup in inquiries until March.
Platts assessed UCOME FOB North China at $1,149/mt on Dec. 16, unchanged day over day, while UCOME FOB Straits was assessed at $1,259/mt, also unchanged.
Regulatory Uncertainty Weighs on Uptake
The International Maritime Organization’s decision to delay the Net-Zero Framework vote has dented confidence among biobunker market participants, prompting shipowners to reassess near-term biofuel demand amid persistently high costs.
“Now with IMO NFZ delay, we foresee even less biofuels uptake for now. To brace for bad economics, there’s a need to cautiously spend money,” a bunker procurer from an Asian shipping company said.
The delayed framework would have imposed sector-wide emissions limits and greenhouse gas pricing on ships above 5,000 gross tons, covering about 85% of global shipping emissions. While the postponement gives suppliers more time to scale capacity and secure feedstocks, it weakens near-term economic signals for biofuel uptake.
Some shipping companies remain focused on vessel-level Carbon Intensity Indicator improvements and internal sustainability targets as ongoing demand drivers. S&P Global Energy’s Horizons report notes that while regulatory delays introduce uncertainty, they do not alter the sector’s long-term decarbonization trajectory. The delay also shifts attention toward Europe, where the EU ETS and FuelEU Maritime remain in force, creating a bifurcated market while suppliers prepare for a $70–$80 billion marine fuel market.
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Source: S&P Global
