- FuelEU regulation could financially benefit shipowners through biofuel surplus trading.
- Biofuels are the preferred immediate strategy for decarbonizing shipping, while green fuels like ammonia and methanol remain more complex.
- OceanScore advocates biofuels as a practical solution, with biofuel-powered ships potentially earning money by selling surplus emissions allowances.
Unlike the EU Emissions Trading System (EU ETS), FuelEU offers a unique opportunity for carriers to gain financially. Albrecht Grell, MD of OceanScore, explained how under this regulation, shipping companies can earn incentives by switching to green fuels. Under the pooling provision, shipping companies actively trade biofuel surpluses among their vessels, reports The Loadstar.
Surplus Trading Through Pooling
FuelEU enables the trading of biofuel ‘surplus’ allowances. Shipowners who operate vessels powered by biofuel could sell this surplus to high-emitting ships, effectively pooling the benefits.
This means that some shipowners may buy these allowances from colleagues instead of using green fuels.
Biofuel Savings Explained
Grell explained that under certain conditions, biofuel bunkering could result in financial savings for shipowners.
“If you were bunkering B100 and you found somebody to buy the benefit or surplus from you, you would be bunkering for minus €240 per ton,”
Mr. Grell noted, highlighting the potential for carriers to “make money by bunkering.”
Impact on Shipper Customers
The savings generated through biofuel surplus trading could be passed on to customers through discounts.
This could help reduce the costs of green shipping programs, such as Hapag-Lloyd’s Ship Green program, which retrofits vessels for greener transit solutions, according to fleet manager Capt. Silke Lehmkoester.
Biofuel as OceanScore’s Decarbonization Strategy
OceanScore’s decarbonization strategy focuses on biofuels, rather than more complex green fuels like ammonia, hydrogen, or methanol. Mr. Grell said, “I think these fuels are sexier because they require new engines and new regulations.”
“But for all practical purposes, biofuels are the way to go for the next few years. It’s just there; it’s simple, it’s wanted, so I think that would be the way. That’s what I see ramping up in many ports.” Grell sees this option gaining momentum in many ports.
Maersk’s Innovation and Methanol
Maersk’s brief venture into methanol as a green fuel was mentioned by Grell, who acknowledged that innovation in shipping is slow to be adopted.
Despite this, Maersk’s investment in methanol is seen as a positive step, but biofuels are more practical for the near term.
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Source: The Loadstar
