{"id":40106,"date":"2025-05-27T11:35:12","date_gmt":"2025-05-27T11:35:12","guid":{"rendered":"https:\/\/quickassetsmarket.com\/index.php\/2025\/05\/27\/why-biofuel-adoption-in-shipping-faces-supply-and-viability-challenges\/"},"modified":"2025-05-27T11:35:12","modified_gmt":"2025-05-27T11:35:12","slug":"why-biofuel-adoption-in-shipping-faces-supply-and-viability-challenges","status":"publish","type":"post","link":"https:\/\/quickassetsmarket.com\/index.php\/2025\/05\/27\/why-biofuel-adoption-in-shipping-faces-supply-and-viability-challenges\/","title":{"rendered":"Why biofuel adoption in shipping faces supply and viability challenges"},"content":{"rendered":"
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Driven by the shipping industry’s net-zero carbon emissions target, demand for biofuels is rising. Biofuels offer an easily adopted solution due to their compatibility with current ship engine technology.<\/p>\n

A Rystad Energy’s analysis indicates a lag in biofuel production capacity (including biodiesel and bio-LNG) compared to demand.<\/p>\n

\u201cUnconstrained biodiesel demand exceeds total supply and the outlook for bio-LNG is equally restricted, in both allocation and production,\u201d the Norway based energy intelligence company said on Tuesday. <\/p>\n

Biofuels may offer a more economical option than conventional marine fuels like very low-sulfur fuel oil (VLSFO), especially in meeting the International Maritime Organization\u2019s GFI standard for low emissions. <\/p>\n

Demand<\/h2>\n

If supply is not limited, global biodiesel demand in the shipping sector might surpass 140 million tonnes of fuel oil equivalent by 2028, the agency said.<\/p>\n

Even in optimal circumstances, total biofuel production is projected to reach a maximum of approximately 120 million tonnes. <\/p>\n

Source: Rystad Energy<\/figcaption><\/figure>\n

However, if sustainability standards favoring cleaner, second-generation biofuels are implemented<\/a>, the potential supply significantly decreases to only 40 million tonnes. <\/p>\n

Considering production uncertainties, actual output, and competition from other industries, the realistically obtainable quantity of biofuels for shipping is even lower.<\/p>\n

Rystad added:<\/p>\n

\n

As new technologies emerge and regulations tighten, the pressure on the shipping industry to innovate and invest wisely has never been greater.<\/p>\n<\/blockquote>\n

\u201cDemand for biodiesel, if unrestricted, outstrips the total supply. The situation with bio-LNG is also constrained, with challenges for both production and allocation capacity,\u201d Junlin Yu, Senior data analyst, shipping at Rystad Energy, said in a release.<\/p>\n

Projected biomethane demand is a modest 16 million tonnes (fuel oil equivalent) by 2028. <\/p>\n

However, the apparent surplus in supply is inaccurate, as over 84% of global biomethane is already designated for electricity generation, and another 10% is allocated to road transport, according to Yu.\u00a0<\/p>\n

\u201cThis leaves only 6% available for all other sectors, including maritime, making actual access far more limited than the numbers suggest.\u201d<\/p>\n

The shipping industry will likely face the shortage, which would have to be addressed, according to the agency. <\/p>\n

Although future fuels like ammonia and methanol are promising long-term solutions, their high costs and infrastructural needs cause hesitation among shipowners who are awaiting more definitive market trends, Rystad said.<\/p>\n

Viability<\/h2>\n

Biofuels currently appear to be the most feasible option for the shipping industry to meet the IMO’s increasingly stringent emissions regulations.<\/p>\n

However, this interim solution is vulnerable, according to the agency. <\/p>\n

Lack of thorough planning and proactive measures could quickly undermine its effectiveness in achieving compliance, it added.<\/p>\n

Yu said:<\/p>\n

\n

Biodiesel and bio-LNG can be cost-effective under the IMO Net-Zero Framework, but only if their lifecycle greenhouse gas (GHG) emissions are low enough to qualify for IMO incentives.<\/p>\n<\/blockquote>\n

However, the demand for bio-LNG in maritime transport significantly outstrips current production, indicating a substantial supply shortage. <\/p>\n

To adapt to evolving regulations, shipowners need to act promptly by securing reliable biofuel sources and adhering to GFI targets, Yu added.<\/p>\n

Source: Rystad Energy<\/figcaption><\/figure>\n

Currently, biofuels offer a more cost-effective alternative to traditional marine fuels, particularly those adhering to stringent low-carbon regulations. <\/p>\n

Although blending biofuels at 30% or 50% provides a near-term solution for emission reduction goals, transitioning entirely to 100% low-emission biofuels presents the most significant long-term cost benefits and advantages.<\/p>\n

Bio-LNG, especially with government subsidies, presents a more cost-effective alternative to biodiesel. <\/p>\n

This makes bio-LNG a potentially valuable fuel source for the shipping industry as it aims for cleaner energy, Rystad said.\u00a0<\/p>\n

The post Why biofuel adoption in shipping faces supply and viability challenges<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Driven by the shipping industry’s net-zero carbon emissions target, demand for biofuels is rising. Biofuels offer an easily adopted solution due to their compatibility with current ship engine technology. A Rystad Energy’s analysis indicates a lag in biofuel production capacity (including biodiesel and bio-LNG) compared to demand. \u201cUnconstrained biodiesel demand exceeds total supply and the <\/p>\n","protected":false},"author":1,"featured_media":40107,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-40106","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing"},"_links":{"self":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/40106","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/comments?post=40106"}],"version-history":[{"count":0,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/posts\/40106\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media\/40107"}],"wp:attachment":[{"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/media?parent=40106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/categories?post=40106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/quickassetsmarket.com\/index.php\/wp-json\/wp\/v2\/tags?post=40106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}