Shipping operators are exploring various options to reduce carbon emissions, each presenting unique commercial, operational, and technical challenges. Among these, biofuels have gained attention as a potentially viable solution. In recent years, major bunkering hubs like Rotterdam and Singapore have seen a noticeable increase in biofuel usage, although the overall volumes remain a small fraction of the total marine fuel market. Bunkering volumes, initially minimal in 2020, grew to a combined 0.3 million metric tonnes (MT) in 2021, followed by 1 million MT in both 2022 and 2023, according to data from the Global Centre for Maritime Decarbonization (GCMD).
Despite this growth, biofuel blends account for only a small percentage of total bunker sales, making up approximately 1.7% at Rotterdam and Singapore in 2022. Globally, biofuels represented a mere 0.11% of all fuel consumed by vessels over 5,000 gross tonnage (GT). This translates to only 0.6% to 0.7% of worldwide annual biodiesel production, as highlighted by the GCMD.
Biofuels like hydrotreated vegetable oil (HVO), fatty acid methyl esters (FAME), and used cooking oil methyl ester (UCOME) have physical properties similar to conventional diesel. FAME, often referred to as biodiesel, is a first-generation biofuel, while HVO, produced from organic waste, is categorised as a second-generation biofuel. According to Lloyd’s Register, these biofuels can be used as drop-in replacements, meaning they don’t require significant modifications to existing ship engines or fuel storage systems.
For older ships, where retrofitting for alternative fuels such as LNG, methanol, or ammonia may not be financially feasible, biofuels present a practical option for meeting carbon reduction targets with minimal investment. Lloyd’s Register began verifying and testing biofuels back in 2011, in collaboration with AP Moller-Maersk, measuring fuel consumption, emissions, and the performance of auxiliary engines running on biofuel blends.
However, biofuels remain significantly more expensive than traditional fossil fuels and are not yet widely available for the marine industry. For example, in Rotterdam, a B30 FAME blend was sold at an average of US$730.25 per tonne in August, about 35% higher than the cost of 0.5% marine fuel oil, according to data from Platts.
Looking forward, Lloyd’s Register anticipates that prices for FAME derived from fats, oils, and grease will decrease over the next decade. Blending biofuels with conventional marine fossil fuels could help manage costs while allowing shipowners to meet interim emissions reduction targets. This strategy also has the potential to improve Carbon Intensity Indicator (CII) ratings for individual vessels and reduce emissions across fleets under the European Union Emissions Trading System (EU ETS), as noted by the GCMD.
GCMD is currently conducting a two-year study to evaluate the entire biofuel supply chain, from production to onboard usage. The study, which involves three ports (Singapore, Rotterdam, and Vlissingen), seven vessels, and 21 stakeholders, aims to trace the journey of biofuels through various methods. One of the key findings so far indicates that blends of HVO, UCOME, and FAME can lead to significant reductions in greenhouse gas emissions—up to 24% on a tank-to-wake basis and 20.3% on a well-to-wake basis compared to traditional fossil fuels.
AIDA Cruises, one of Europe’s largest cruise operators, has been experimenting with biofuels for the past two years. Their president, Felix Eichhorn, explains that the company is committed to identifying alternative fuels to reduce greenhouse gas emissions. AIDA Cruises recently tested 100% renewable biofuel on its ship, AIDAprima, during a stop at the port of Rotterdam. The fuel was supplied by VARO Energy, and its performance will be evaluated during regular ship operations. The expectation is that biofuels could reduce greenhouse gas emissions by as much as 85% compared to conventional fossil fuels.
In addition to biofuels, AIDAprima incorporates other energy-saving technologies. Built in 2016 by Mitsubishi Heavy Industries, the ship features a diesel-electric propulsion system with three MaK diesel engines and one dual-fuel LNG engine. A Mitsubishi Air Lubrication System generates a microbubble carpet under the ship’s hull to reduce drag, potentially saving up to 7% in fuel consumption. The ship is also equipped with a Corvus Energy battery, installed in 2020, to improve operational efficiency.
AIDA Cruises plans to further test the use of B100 biofuel during voyages from Hamburg to the Norwegian fjords. The results will help the company determine whether biofuels can be implemented more broadly across their fleet.
The introduction of European Union regulations, such as the EU ETS and FuelEU Maritime, which will soon require shipowners to pay for CO2 emissions, is likely to accelerate the adoption of biofuels in the shipping sector.
While biofuels present a promising solution to help shipping operators meet carbon reduction targets, challenges such as high costs and limited availability remain. However, as research progresses and regulations evolve, biofuels may become a more feasible option for the maritime industry in the future.
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