Regulatory incentives and pricing dynamics lifting biofuel demand in Netherlands

Biofuel demand has increased in the Netherlands, bunker supplier Peninsula told ENGINE.

The Netherlands’ ZRE rebate system, introduced at the start of the year, has improved the economics of bunkering biofuel grades, particularly B100, a Peninsula spokesperson said.

Elevated gasoil prices have also made biofuel alternatives such as B100 more attractive on a relative basis, the spokesperson added.

ENGINE’s price analysis shows ZRE-rebated advanced B100 FAME in Rotterdam was priced at a $232/mt premium over LSMGO on an outright basis on 26 May, down from about $485/mt at the start of February as LSMGO prices rose much more sharply than B100.

After adjusting the outright prices to VLSFO-equivalent basis to account for differences in energy density, B100’s premium on 26 May widens to about $421/mt because of its lower energy density.

But for intra-EU voyages, that premium narrows sharply once EU ETS costs and FuelEU Maritime compliance value are included. B100 has been cheaper than LSMGO every week since early February on an EU ETS- and FuelEU-adjusted basis.

The regulation-adjusted B100 discount widened from about $400/mt in early February to more than $850/mt in March after the Middle East conflict began, and was at $552/mt on 26 May.

Demand for conventional fuels such as HSFO, VLSFO and LSMGO has remained resilient because of continued bunker activity, but buying has become more selective and price sensitive as supply tightness and price volatility persist, Peninsula's spokesperson said.

By Nachiket Tekawade

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