GAC Bunker Fuels: Biofuel as a path to decarbonisation

Of all the alternative fuels currently available, biofuels look set to become the most viable option for rapid and widespread adoption as a bunker fuel for commercial shipping, writes GAC Bunker Fuels. Hydrotreated vegetables, blend-in combustibles and biomethanol are already being used as drop-in power on some ships, with the potential to replace fossil fuels.

PHOTO: GAC Bunker Fuels

The International Maritime Organisation (IMO) has highlighted 2030 and 2050 as key milestones for carbon emission reductions. On average international shipping is looking to reduce its carbon emissions by at least 40% by 2030, pursuing efforts towards 70% by 2050, all compared to 2008 levels.

The regulations aim to establish common standards for introducing and adopting new fuels, and pave the way towards an industry-wide intention to decarbonise.

Against an accelerated decarbonising timeline, the spotlight is on biofuels as a potential solution. And yet, their use in maritime is still on a small scale.

The switch to alternative energy requires a multi-faceted approach, including partnering with alternative fuel suppliers to facilitate the adoption of sustainable fuels. 

"There are great opportunities for those eager to translate decarbonisation objectives into reality," says Martyn McMahon, Global Director of GAC Bunker Fuels, the marine fuel and lubricant procurement arm of shipping, logistics and marine services provider GAC Group. 

"The industry needs widespread investment in newer, readily available alternative energy sources. Instead of just nominally patching the gaps, we need to shift the source of bunker fuels to something greener and cleaner."

The changing temperature on biofuels

GAC Bunker Fuels has been expanding its supply network of traditional and alternative fuels, focusing on those with a lower carbon output, such as LNG, biofuels and other forms of energy that aid with international decarbonisation intentions. The Group’s global network features hubs at strategic bunkering locations and forms part of its network of more than 300 offices in over 50 countries.

Decarbonisation is, by its very nature, an international endeavour. GAC Bunker Fuels works with the the wider group’s worldwide network of offices, sub-agents and suppliers to meet marine fuels and lubricants requirements at both established bunkering locations and non-traditional refuelling ports worldwide.

The company is supporting efforts to offer alternative bunkering solutions to help ship owners and operators improve emissions performance now and in future. One way is through partnerships, such as the signing of a Memorandum of Understanding with Dubai-based Neutral Fuels to market marine gasoil (MGO) biodiesel blends across the Middle East and India, and to expand supply points throughout the Middle East and Africa. 

"We are always looking for new ways to expand alternative fuel service options in more regions,” says Martyn. “Last year, we opened an office in Westport, Connecticut, to support global customers operating at American ports on their own decarbonisation journey.”

Biofuels are currently seen as a transitionary fuel with increased adoption in recent years. However, with the plethora of simultaneous supply chain disruptions, access to raw materials is also becoming increasingly important for upscaling biofuel production.

Meanwhile, the bunker industry must also compete with increasing demand for biomass, biowaste and recycled vegetable oils across other sectors as the world moves away from traditional combustion fuels. As in maritime, there is a realisation that current consumption behaviour needs to change, and regulatory authorities are encouraging investment in newer forms of energy like ammonia and hydrogen.

“There is a growing gap between demand and availability of alternative fuelling solutions worldwide which the industry must address,” adds Martyn. “It is crucial that alternative fuels and support for bunkering solutions are available wherever shipping goes. After all, ensuring cleaner transportation is key to lowering supply chain emissions.”

Scaling barriers to transition

The complexity of the emerging energy landscape and evolving regulations has been a key reason for the hesitancy in investing in biofuels. But there are other factors at play, such as the impact of the Ukraine-Russia war on global markets and Covid-related shutdowns on supply chains. There is also debate over whether biofuels are really a green option as some are produced on cleared lands that could otherwise grow food, grass and trees and support ecosystems. As demand for these fuels increases, the possibility of producing biofuels on cleared lands rises in tandem.

Critically, biofuels are significantly more expensive than traditional bunkering solutions, with prices 70%-130% more than fossil fuels, according to research from Brussels-based NGO Transport & Environment.

"This applies to global disparity too. For example, compared to other ports, major developed ports like Fujairah, Singapore and Rotterdam might be more readily able to provide capacity and infrastructure to service biofuels," Martyn said.

“But no matter where our customers are, GAC has someone on the ground to oversee their supply – not just behind a desk, but on the front line providing full operational support. It’s that global reach that enables us to be there around the clock, around the world, and help customers reach their own energy transition aims internationally.”

While biofuels do not require massive revisions to engine operations, they are not the only transitionary fuel. Switching to a whole new form of low-carbon energy on an industrial scale will inevitably require modifications to fuel infrastructure, both onboard vessels and at ports. Investment is needed to supply liquid biofuels to refuelling stations, starting with feedstock production. The energy, material and capital inputs required vary considerably and are not necessarily compatible with existing processes supporting traditional bunker fuels. The entire lifecycle of biofuels could very much be in need of a revamp.

Pure or blended?

MGO emits 3.22 tonnes of carbon dioxide and equivalents per metric tonne, which can be significantly reduced by the blending of pure biofuel in varying increments.

Biodiesel can be blended and used in varying concentrations – typically blended in higher ratios of B24 (Singapore) and B20-B30 (ARA). B100 (pure biodiesel) is also commonly used as a blendstock to produce lower blends and does not often become transportation fuel due to a lack of regulatory incentives and pricing, unlike B20 blends or lower.

Like other bunker fuels, biofuels have their downside.

On a volumetric basis, B100 contains less energy than petroleum diesel, so a higher percentage of biodiesel means less energy. Pure biofuel also requires special handling and equipment upgrades to avoid operational issues and could increase nitrogen oxide emissions, although it greatly reduces other toxic emissions.

“There are significant barriers to overcome before we reach widespread adoption of biofuels in maritime, and there is no getting away with that,” says Martyn. “But whatever the future fuelling solutions we develop and adopt as an industry will come with costs and trade-offs. The price of continuing to burn fossil fuels and ignoring emissions targets will be far greater.”

GAC also plays an advisory role when it comes to which suppliers offer alternative fuels, such as biofuel or LNG, and sharing its expertise and best practice in handling these fuels.

Comparing the two transitionary fuels, LNG-fuelled vessels emit about 25% less CO2 as those running on gasoils or fuel oils. Similarly, the typical B20-B30 biofuel blends emit around 16%-27% less CO2 as conventional fuels if the biofuel components of these blends have 80-90% CO2-reduction potential on a well-to-wake basis.

"Logistics service providers are setting the stage for the industry’s en-masse adoption of low and zero-carbon energy sources by developing the much-needed infrastructure," says Martyn. "Tough new fuel efficiency standards incentivise shipping firms to make the change, but the means to do so is just as, if not more, important.”

To this end, GAC Group has been working alongside like-minded industry partners through initiatives including the Global Maritime Forum’s Getting to Zero Coalition. The alliance of more than 140 companies from the maritime, energy, infrastructure and finance sectors aims to accelerate the decarbonisation of shipping by developing and deploying zero emission vessels by 2030.

A holistic approach

The impediments to developing and supplying alternative energy sources will eventually be overcome. Wind energy has already demonstrated how green power can become competitive with the cost of traditional combustion sources. Shipping companies constantly look for cost-effective ways to meet their carbon emissions reduction targets and rely on their suppliers to offer sustainable alternatives.          

“The industry is experiencing a massive shake-up, but it will stabilise eventually. Everyone is looking to decarbonise, and industry collaboration is vital to that effort. Luckily, we have enough tools to achieve these goals, one of which is biofuels,” said Martyn.

“Biofuels alone might not be able to decarbonise global emissions. The future will inevitably involve a mix of solutions with multiple energy transitions moving at different paces. Investment and infrastructural support will require collaboration between all supply chain stakeholders, from regulators to shipowners and service providers. Suppliers and traders have a responsibility to lend their expertise and facilitate the energy transition,” he added.