Leading oil suppliers Bunker Holding and Monjasa are preparing for a major upcoming alteration in the demand for marine fuels. 

From Jan. 1, 2025, the shipping industry will be required to reduce emissions of CO₂ by filling up tanks with sustainable fuels. Besides liquefied natural gas (LNG), biofuels are currently the only alternative.

“Offering and using biofuels will be a license to operate in the very near future,” says Valerie Ahrens, Bunker Holding’s global director of sustainable fuels.

”This is why Bunker Holding is working with second generation biofuels producers and are able to offer biofuels not only in Rotterdam, but in other ports worldwide,” she adds in a written response.

Ahrens believes the European Union’s upcoming CO₂ quota system will be able to promote the use of biofuels as more quotas need to be purchased to sail on fossil fuels.

“Depending on the price of EU’s carbon credits in the future, complying with the EU emissions trading system could also further boost the demand for biofuels in shipping,” Ahrens states.

”Bunker Holding aims to be an active part in facilitating the use of biofuels and especially the last mile delivery. Biofuels need to be made accessible, at any region and port,” the director continues.

She explains that the character of demand has changed after the EU earlier this year passed the FuelEU Maritime regulation, effective from 2025, as well as the quota system that comes into force next year. The International Maritime Organization’s (IMO) CII regulation will have effect from 2024 as well.

Whereas carriers previously approached Bunker Holding to trial biofuels in their fleet, enquiries now regard compliance with the new regulatory demands.

“Last year, we received and supplied several enquiries for trials and one-off supplies for biofuel. This was more a voluntary act linked to the customers internal or external ESG targets rather than meeting EU regulations. This year however, the requests are more linked to meeting future EU and IMO regulations,” Ahrens explains.

Expects increased demand

Monjasa also expects the market to grow in the next year.

”At Monjasa, we feel carriers’ increased awareness of biofuels and our focus right now is to thoroughly train our traders and operators and to keep developing the supplier network,” informs Jesper Nielsen, Monjasa’s group responsibility director.

”We already have experience with blending and supplies of biofuels in Latin America and the Middle East and expect to see a steadily increasing demand across our markets for the next 12 months,” reads a written response.

In February 2022, Bunker Holding entered a collaboration with US Renewable Energy Group (REG) on biofuels.

REG is a producer of biofuels such as B20 and B30 biodiesel and commands 11 biorefineries across the US and Europe.

At the time, the two parties did not make any statements about numbers or expectations for the sale of biofuels but said they would ”focus on possibilities” in North America and Europe. 

Possible shortage

So far, the partnership has ”completed a few tests with biofuels for ships and delivered biofuels for select shipping customers,” as a Bunker Holding statement reads.

The partnership is solely between Bunker Holding and REG, and the bunkering firm does not hold any owner interests in other producers either.

As described by ShippingWatch recently, biofuels could become a highly sought-after product from 2025, as shipping only represents one industry that needs to implement non-fossil fuels.

And where other sectors have come far, shipping is still building up an infrastructure.

Furthermore, biofuels made from food products such as grain should be avoided. Norwegian carrier Odfjell, for instance, won’t make use of first-generation biofuels, stressing that only third-generation biofuels count as truly green.

English edit: Kristoffer Grønbæk