The cost-effectiveness of B100 and liquefied biomethane (LBM) as marine fuels has recently decreased due to price increases. This shift is making these alternative fuels less attractive compared to very low sulfur fuel oil (VLSFO), even when factoring in the costs associated with EU Emissions Trading System (ETS) and FuelEU Maritime regulations. The analysis includes estimated compliance costs for voyages to the EU from Rotterdam and for non-EU to EU voyages from Singapore, incorporating average prices for compliance surpluses.
For freight forwarders and operations managers, this development suggests that the economic incentive to switch to certain biofuels might be weakening. While regulatory pressures continue to push for greener shipping, the narrowing price differential could lead carriers to re-evaluate their fuel strategies, potentially impacting bunker surcharges and overall freight costs. Shippers might see less immediate cost benefit from booking cargo on vessels utilizing these specific biofuels, as the operational savings for carriers are reduced.
