Norway to introduce 6% criticised biofuel blending mandate from October – sources
The blending mandate will only be applicable to bunkers sold to the domestic maritime market, including ships operating between Norwegian ports, rigs and fishing vessels, a source tells ENGINE.
PHOTO: Aerial view of Bergen port in Norway. Getty images
Initially, a 4% biofuel blending mandate was proposed, which was subsequently increased to 6%, the source says. The marine biofuel will be a blend of 94% gasoil and 6% biofuel that will mostly be based on hydrogenated vegetable oil (HVO).
When the mandate kicks in from October, LSMGO prices for domestic vessels in Bergen and other Norwegian ports stand to rise by almost $70/mt from current levels, the source claims.
Meanwhile, Norwegian energy firm MHService recently said that it will be practically impossible to implement the mandate so soon because of limited availability of advanced biofuel feedstocks. These are generally produced from various waste or residua-based, non-food biomass sources. MHService cited a consultation note from the Norwegian Environment Agency (NEA) that pointed out that
Norway has had a biofuel blending mandate in place for road fuels in place since 2007 and saw a gradual rise in demand and imports leading up to 2019, when it required road fuels contain 12% biofuel by volume. The road fuels mandate has shifted up and down, and was eventually set to 17% last year, including a minimum 12.5% advanced biofuels requirement.
"About half of biofuels consumed in Norway are qualified as ‘advanced biofuels’, meaning that they are produced from residues and waste (particularly used oils for biodiesel, mainly imported)," the International Energy Agency's (IEA) biofuel division said about biofuels in Norway in 2021.
Global supply of first-generation biofuel has been good, while supply of second-generation, advanced biofuels is much more limited, MHService said last month.
The energy firm has also expressed concerns about possible fraudulent activity in biofuel blending, arguing it is hard to confirm whether a biofuel blend is actually produced using renewable feedstock.
“It is hardly easy to tell the difference between well-used frying oil and new vegetable oil with a bit of used mixed in, and this is just one example of the crime that is being facilitated here,” MHService said.
It went on say that used cooking oil is sometimes more expensive than fresh cooking oil.
While the mandate will not be applicable for bunkers sold to ocean-going vessels, it will hit domestic fishing vessels, making bunkering expensive for them, the source says.
By Nithin Chandran
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