UK shipowner secures long-term e-methanol offtake ahead of FuelEU tightening

London-based shipping firm RFOcean has signed a binding long-term off-take agreement with global renewable fuel producer ETFuels to purchase e-methanol at a fixed price from 2030.

IMAGE: RFOcean's methanol-ready vessel, RF Ran. RFOcean

RFOcean currently has eight methanol-ready vessels on order. While these ships will not run on methanol upon delivery, they are designed to be retrofitted for methanol propulsion at a later stage.

The fuel will be supplied from ETFuels’ 120,000 mt/year Rattlesnake Gap e-methanol project in West Texas in the US.

The project is currently at the front-end engineering and design (FEED) stage and has secured access to renewable power and biogenic CO2. It has also locked in confirmed incentives of around $1.5 billion under the US Inflation Reduction Act.

With a long-term purchase agreement now in place, the project has moved into what ETFuels described as “financeable territory.”

ETFuels said the agreement was driven in part by FuelEU Maritime’s tightening compliance requirements from 2030, which are expected to increase demand for compliant fuels.

“This agreement converts that fleet optionality into secured, fixed-price compliant fuel supply before the market tightens,” ETFuels noted.

The shipowner viewed early action as both a compliance and commercial decision, RFOcean’s chief executive, Fredrik Rye-Florentz, explained.

"This isn't just about compliance, it's about competitive positioning," he said, adding, "We believe compliant fuel will be scarce. By locking in supply now at fixed prices, we can offer our customers certainty and be in the forefront of a development which makes commercial sense today."

By Konica Bhatt

Please get in touch with comments or additional info to news@engine.online