What are biofuels?

There are three different generations of biofuels, depending on the source from which the fuel is derived from.
1st generation biofuels are produced directly from food crops, such as corn, wheat, soybeans, and sugar cane, while 2nd and 3rd generation biofuels are not produced from food crops but non-edible plants and are classed as sustainable.

Vegetable oils derived from food crops, such as palm oil or soy oil, support the production of 1st generation FAME- and HVO biodiesel. They are less expensive feedstocks but are not sustainable.   Waste fats, oils, and greases (FOGs), such as used cooking oil, support the production of 2nd generation FAME- and HVO biodiesel and are unlike 1st generation classified as sustainable.   Other 2nd generation productions include purpose-grown energy crops, like grass or seed, and agricultural residues, like corn stover and wheat straw, resulting in FT diesel, DME, and methanol as end products.    Lastly, natural gas can also be used to produce FT diesel, DME and methanol but since these fuels are fossil-based, they do not contribute to a reduction in greenhouse gasses.  

FAME is short for fatty acid methyl ester. FAME biodiesel can be blended with conventional fuel of up to 7% and must comply with ISO 8217:2017.  HVO is short for hydrotreated vegetable oil. It is suitable as a drop-in fuel due to its higher technical standards with a long-term stability. 

FT diesel is the abbreviation for Fischer-Tropsch diesel. This product has a long-term potential but a lower-level technological readiness. DME is short for dimethyl ether and in order to be used exclusively, a dedicated engine is necessary. Natural gas used as feedstock is inexpensive, however, renewable feedstocks are rather pricy.

Like with DME, methanol requires a dedicated engine. If using natural gas, it is less expensive than when using other feedstock methods.

The infrastructure for the most dominant biofuels is well developed in a number of ports worldwide, especially the main ones. For HVO and FAME, which are drop-in biofuels, it is possible to make use of the already established bunkering infrastructure. It is, however, not a global widespread operation outside the main ports.

The ISO 8217 standard for fuel requirements in the marine industry also applies to biofuels. For instance, HVO and 7% FAME blend can be used without engine modifications and safety issues and are covered by the ISO 8217 standard, whereas burning other types of biofuels as bunkers is subject to dispensation from the local authorities.   A challenge in terms of safety when using FAME biodiesel is that it degrades in a relatively short period of time, due to oxidation stability. Due to this, FAME is not to be stored for more than six months.   Furthermore, it is recommended to do thorough testing of biofuels before using them as bunkers.

Large energy information providers like S&P Global Platts are providing the biofuel price publications, and the customers’ requirements for CO2 reduction has a great impact on the actual price of the delivered product.   Generally speaking, the conventional price of bunkers is approximately three times lower than the price of biofuel. Therefore, it is a common choice to burn a blended product of biofuel and conventional bunkers and thereby obtain a more affordable price.   As an example, a blended product that consists of 70% conventional bunker oil and 30% biofuel has an expected additional cost of approx. 40-60%.

When a company sells biofuel, it needs to be certified in order to preserve the chain of sustainability, and a certification proves that the biofuel is produced in a sustainable way.   Biofuels have close to zero impact on the environment when it comes to CO2 and SOx emissions. However, the reduction in NOx and Particulate Matter (PM) emissions varies and is somewhat lower.   You need to understand the whole lifecycle of biofuel when looking at GHG emissions, as it will very much depend on the feedstock used and the production process.