WHAT ARE BIOFUELS?

'Biofuel' is a term used to describe a fuel, gas or liquid that derives from biomass or biomass residues.

At the moment, the biofuels that are considered the promising ones for use in the maritime industry are fatty acid methyl ester (FAME) & hydrotreated vegetable oil (HVO). These types are drop-in biofuels and can be used in existing engines and fuel infrastructure.
However, biofuel covers a large range of other products too, making the overview of different biofuel products, generations, feedstocks, and blends rather complex.

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.

Which biofuel feedstocks result in which end products?

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.

What is FAME and HVO?

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.

What is FT Diesel and DME?

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.

What is Methanol?

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

How is the infrastructure?

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.

What about safety?

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.

How is the price comparison between biodiesel and fuel?

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%.

How do biofuels impact the environment?

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.

CO2, NOx, SOx & PM EMISSIONS COMPARED TO CONVENTIONAL MARINE FUELS

BIOFUEL	CO2	NOx	SOx	PM
FAME	Between 80-95% reduction	Between 30% reduction and 10% increase	Reduce 90%	Reduce 40-90%
HVO	Between 80-95% reduction	Up to 20% reduction	Reduce 100%	Up to 30% reduction
LNG	Between 10-15% reduction	Approximately 90% reduction	100% reduction	Almost 100% reduction

What should you as a customer consider?

There are a number of considerations you need to make before choosing biofuels.

Is it to reduce emissions using existing engines? Then consider testing the biofuel before using it continuously.

Do you need to fulfil sustainability-linked loans? Then you need to be aware of the level and the type of emission reduction.

Are you promoting green alternatives to customers? Then you should consider the complexity of feedstocks and the GHG emissions of same.

Is it part of your CSR strategy? Then a Proof of Sustainability certificate is important.

Are you choosing biofuels as a short-term investment? Then supply locations and local restrictions are to be considered.

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