Fuel Switch Snapshot: B100 regains price edge to HSFO

B100 back to a discount to HSFO with EU regs

LNG rises to greater premiums over VLSFO and HSFO

Rotterdam’s VLSFO-equivalent B100 (100% biofuel) price has shifted from a $19/mt premium over HSFO last week to a $3/mt discount. These prices include estimated EU ETS carbon prices and FuelEU penalties for conventional fuels like HSFO, and an estimated pooling benefit for B100.

A $657/mt theoretical pooling benefit under FuelEU reduces the cost of VLSFO-equivalent B100 to $670/mt in Rotterdam. This price includes a Dutch HBE rebate, which has remained broadly steady at $356/mt, according to a PRIMA Markets assessment.

For vessels powered by dual-fuel Otto medium speed (Otto MS) LNG engines, bunkering VLSFO-equivalent fossil LNG in Rotterdam costs over $150/mt more than VLSFO – when accounting for EU compliance costs on EU-EU routes.

For scrubber-fitted dual-fuel Otto MS vessels, LNG is now $210/mt costlier than HSFO, with estimated compliance costs factored into fuel prices.

Liquid fuels

Rotterdam’s VLSFO price has remained largely steady, declining by just $3/mt over the past week. The port’s VLSFO-equivalent B100 price has seen a slightly larger drop of $9/mt. These prices include estimated EU compliance costs and benefits, with B100’s price also factoring in the Dutch HBE rebates.

Singapore’s VLSFO benchmark has edged up by $3/mt this past week. VLSFO lead times now range between 3-12 days, compared to the recommended 5-12 days in the previous week.

Liquid gases

Rotterdam’s VLSFO-equivalent LNG price has ended its downward streak, climbing $40/mt higher over the past week. This price includes estimated compliance costs for ships with an Otto MS engine on EU-EU voyage.

The price surge is attributed to a 4% increase in the front-month Dutch TTF Natural Gas contract, driven by “cold weather forecasts and expectations of low wind output in Central Europe next week," according to Energi Danmark.

Despite LNG’s price increase, liquefied biomethane (LBM) remains the cheapest compliance option in Rotterdam. Combined benefits from the EU ETS and from FuelEU’s pooling mechanism can reduce LBM costs to $587/mt when bunkered in Otto MS engines and $452/mt for diesel slow-speed (diesel SS) engines, giving it a cost advantage for intra-EU voyages.

Singapore’s VLSFO-equivalent LNG benchmark has dropped by $9/mt over the past week, amid expectations of easing geopolitical tensions.

By Konica Bhatt

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