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Biofuels in shipping

Biofuels in shipping are liquid or gaseous fuels derived from biological material that can substitute for or blend with conventional petroleum-based marine fuels. Three main product classes are relevant to commercial shipping: fatty acid methyl esters (FAME), hydrotreated vegetable oil (HVO, also marketed as renewable diesel), and biomass-to-liquid (BTL) Fischer-Tropsch fuels. All three can reduce well-to-wake greenhouse gas emissions compared with heavy fuel oil, but the degree of reduction depends critically on the feedstock origin and whether land-use change is accounted for. Regulatory treatment under IMO instruments and the EU’s FuelEU Maritime regulation differs from that of fossil fuels, with certified biofuels receiving well-to-wake GHG intensity credits rather than the default fossil carbon factor. Supply constraints, cold-flow handling characteristics, microbial contamination risk, and price premiums of US$400–800 per tonne over equivalent fossil bunkers limit the near-term scale of uptake. ShipCalculators.com provides dedicated calculators for biofuel blend GHG intensity, FAME and HVO well-to-wake emissions, FuelEU compliance, and bunker biofuel compatibility.

Contents

Background and history

The use of plant-derived oils as engine fuel predates the petroleum industry. Rudolf Diesel demonstrated his compression-ignition engine on peanut oil at the 1900 Paris World Exhibition, and blended vegetable oils were used in diesel engines sporadically through the early twentieth century. During the First and Second World Wars, fuel shortages in several countries prompted government programmes to process vegetable oils into engine fuel. Large-scale practical interest lapsed as cheap petroleum became the dominant energy carrier from the 1950s, and vegetable oil fuels were largely abandoned.

The 1970s energy crises and subsequent national energy-security programmes in Brazil and the United States revived interest in biofuels for road transport. Brazil’s ProAlcool programme, launched in 1975, achieved large-scale deployment of sugar-cane ethanol for petrol blending and sparked parallel research into diesel substitutes. European research in the 1980s and 1990s established transesterification as the practical process for producing FAME from rapeseed and other vegetable oils, and the first commercial FAME production plants opened in Austria and France in the early 1990s. The US biodiesel industry followed with soybean methyl ester production from the mid-1990s. The process of catalytic hydrotreatment of fats and oils to produce paraffinic renewable diesel was developed to commercial scale by Neste Oil (now Neste Corporation) in Finland, with the first HVO production plant commissioned in 2007 in Porvoo.

Renewed interest from the 1970s onwards produced two practical routes to liquid biofuels for compression-ignition engines: transesterification to yield FAME, and hydrotreatment to yield HVO. Both routes produce fuels whose chemical properties are sufficiently similar to petroleum distillates that they can be used in existing engines without design modification - hence the classification as “drop-in” fuels. A third route, Fischer-Tropsch synthesis from syngas derived by gasifying solid biomass, produces BTL fuels with properties similar to marine gas oil.

In the road-transport sector, policy mandates in the European Union under the Renewable Energy Directive (RED I, Directive 2009/28/EC, and its successor RED II, Directive 2018/2001/EU) drove rapid growth in biodiesel production through the 2010s. EU biodiesel production reached approximately 14 million tonnes per year by 2019, predominantly FAME from rapeseed and used cooking oil. Shipping remained a minor consumer of biofuels until approximately 2019-2021, when the entry into force of the IMO 2020 sulphur cap shifted the bunker fuel mix towards higher-cost distillates, and tightening IMO carbon intensity regulation and the EU’s inclusion of shipping in its carbon market created additional economic incentives to reduce fleet carbon intensity. Large carriers including Maersk, MSC, and CMA CGM began conducting commercial biofuel trials from 2021 onwards, with vessel operations continuing on blended fuels at scale from 2022.

The IMO addressed biofuel-specific guidance through MEPC.1/Circ.795 (2012, now superseded), followed by updated guidance issued at MEPC 81 in April 2024 under MEPC.385(81) on the use of biofuels under MARPOL Annex VI and MEPC.388(81) setting out LCA guidelines for marine fuels. The 2023 IMO GHG Strategy, adopted at MEPC 80, explicitly identified biofuels alongside e-fuels as candidate transition fuels for the 2025-2035 period.

Fuel categories

Fatty acid methyl esters (FAME)

FAME, commercially known as biodiesel, is produced by transesterification: a triglyceride feedstock (a vegetable oil or animal fat) reacts with a short-chain alcohol - almost always methanol - in the presence of an alkaline catalyst to yield three molecules of fatty acid methyl ester and one molecule of glycerol as a co-product. The chemical reaction is: triglyceride + 3 CH₃OH → 3 FAME + glycerol, where CH₃OH is methanol. Each FAME molecule retains the hydrocarbon chain length and degree of saturation of the parent fatty acid.

The physical properties of FAME depend on feedstock. Soybean methyl ester (SME) contains predominantly C18 chains with one or two double bonds; rapeseed methyl ester (RME) is similar; palm oil methyl ester (PME) contains a higher proportion of saturated C16 and C18 chains, giving better cold-flow properties but higher solidification temperature. Tallow methyl ester (TME) and used-cooking-oil methyl ester (UCOME) are produced from animal fats and recycled vegetable oils respectively.

The principal marine fuel standard, ISO 8217, limited FAME content to seven per cent (B7 equivalent) in distillate grades until the 2017 edition. ISO 8217:2017 Table 2 specifies a maximum FAME content of seven per cent by volume for distillate grades DMA, DMZ, and DMB. The 2024 revision of ISO 8217 extends the permitted FAME content in certain grades to allow B30 and higher blends, accommodating the growing commercial demand for high-blend marine biodiesel. Residual grade specifications in ISO 8217:2017 set a maximum FAME content of zero, prohibiting direct blending with heavy fuel oil in those grades, though in practice some bunker suppliers have offered FAME-blended residual products under contractual agreement rather than ISO specification.

Blend notation follows the convention Bn where n is the percentage by volume of FAME. B7 is the standard road-diesel blend level in many EU member states. B30 (30% FAME, 70% marine gas oil or VLSFO) is a common marine trial blend. B100 is neat FAME without any petroleum diluent. The FAME B100 biodiesel summary calculator provides a quick reference for properties at full concentration.

FAME has a net calorific value of approximately 37–38 MJ/kg compared with approximately 42–43 MJ/kg for petroleum diesel, meaning a fuel-consumption increase of roughly five to eight per cent on a mass basis when substituting FAME at B100. At the blend ratios used in practice (B10–B30) the energy penalty is proportionally smaller and generally within the tolerance of existing engine management systems.

The FAME well-to-wake emissions calculator quantifies GHG intensity across feedstock options, and the biofuel blend emissions calculator allows users to model any FAME:fossil blend ratio.

Hydrotreated vegetable oil (HVO)

HVO, also marketed under trade names such as Neste MY Renewable Diesel, Preem EvolutionDiesel, and ENI Ecofining’s HVO product, is produced by catalytic hydrotreatment: triglycerides and fatty acids react with hydrogen over a catalyst at temperatures of 300–400°C and pressures of 3–8 MPa. The process removes oxygen (as water) and saturates all double bonds, converting the feedstock into straight-chain and branched paraffinic hydrocarbons chemically indistinguishable from petroleum-derived hydrocarbons. The product is sometimes designated R-100 (renewable diesel, 100% bio-derived) to distinguish it from petroleum diesel.

Because HVO is paraffinic, it has essentially no aromatic content and no sulphur. Its cetane number typically exceeds 70, compared with approximately 50 for petroleum diesel and approximately 55 for FAME. Its cold filter plugging point (CFPP) can be engineered during processing by isomerisation, yielding grades suitable for use in cold climates. Its net calorific value of approximately 43–44 MJ/kg matches or slightly exceeds that of petroleum diesel, so there is no energy penalty per tonne.

HVO meets the requirements of EN 15940 (paraffinic diesel fuels) and can be used at any blend ratio up to and including 100% in most modern marine diesel engines without any material modifications. Engine manufacturers including MAN Energy Solutions and Wärtsilä have issued approvals for HVO use at B100. This “blend wall free” property distinguishes HVO from FAME and from most alcohol fuels, which require blend limits and materials compatibility checks. The HVO renewable diesel summary calculator and HVO well-to-wake calculator provide properties and GHG data.

HVO can be produced from the same feedstock range as FAME: virgin vegetable oils, animal fats, used cooking oil (UCO), and tall oil. The hydrotreatment refinery step is capital-intensive and has been built predominantly at large petroleum refineries with hydrogen surplus, explaining why HVO production is more concentrated among a small number of producers than FAME.

Biomass-to-liquid (BTL)

BTL fuels are produced by first gasifying solid or lignocellulosic biomass to syngas (a mixture of carbon monoxide and hydrogen), then processing the syngas through Fischer-Tropsch (F-T) synthesis over a cobalt or iron catalyst. The F-T process converts CO + H₂ into straight-chain hydrocarbons across a range of carbon chain lengths. The liquid fraction suitable for marine distillate use is a synthetic paraffinic kerosene (SPK) or synthetic paraffinic diesel equivalent. BTL products are also fully paraffinic, sulphur-free, and have cetane numbers above 70.

Commercial-scale BTL marine fuel production remains limited as of 2024. The process chain has high capital cost and relatively low thermal efficiency (typically 30–40% from biomass input to liquid fuel output), making BTL fuels expensive relative to FAME and HVO. The technology has been demonstrated at pilot and semi-commercial scale by several European energy companies, and BTL aviation fuel (Sustainable Aviation Fuel, SAF, specifically the Fischer-Tropsch to Hydroprocessed Esters and Fatty Acids, HEFA pathway) has attracted more investment than the marine BTL route. BTL fuels nonetheless represent a potential pathway for using forest residues and agricultural wastes that cannot easily be processed through transesterification or hydrotreatment.

Feedstock categories and sustainability tiers

The biofuel feedstock used is the single most important determinant of both the GHG outcome and the regulatory value of a given biofuel blend. The three-tier generation framework - first generation (1G), second generation (2G), and third generation (3G) - is used in policy, certification, and commercial documentation to communicate the sustainability position of a feedstock.

First-generation feedstocks

First-generation (1G) biofuel feedstocks are food or feed crops grown on agricultural land: soybean oil, rapeseed oil (canola), palm oil, sunflower oil, and corn oil for vegetable-oil-derived FAME and HVO; sugar cane or corn starch for fermentation ethanol (less relevant to marine applications). The principal sustainability criticism of 1G feedstocks is indirect land-use change (ILUC): diverting food crops to fuel use drives expansion of agricultural land into forests, peatlands, or other carbon-rich ecosystems elsewhere in the supply chain, generating GHG emissions not captured by a direct-combustion LCA. The ILUC factors assigned by the European Commission under the delegated regulation to RED II are substantial: 55 gCO₂eq/MJ for soy, 45 gCO₂eq/MJ for rapeseed, and 231 gCO₂eq/MJ for palm oil (reflecting peatland drainage). When ILUC is included in the well-to-wake calculation, palm-oil FAME can have a GHG intensity exceeding that of the petroleum diesel it displaces.

A secondary criticism is food-versus-fuel competition: diverting large crop volumes to biofuel production raises food commodity prices, with distributional consequences for lower-income populations. The Red Sea and Pacific supply chain disruptions of 2021-2022 sharpened this concern. EU policy under RED II caps 1G biofuel contribution toward renewable energy targets and specifically prohibits counting palm oil toward the advanced biofuel sub-target from 2023. FuelEU Maritime, discussed below, applies the same feedstock hierarchy.

In practical marine procurement terms, 1G feedstock biofuels are available and are used in blends where the primary motivation is CII improvement rather than maximum lifecycle GHG reduction. A shipowner blending B20 rapeseed FAME with MGO without ILUC inclusion may demonstrate a 10–15% WtW reduction on that share of fuel consumption, which can be sufficient to shift a vessel’s CII rating by one band in marginal cases. The regulatory risk - that future IMO or EU rule changes may disallow 1G credit or impose mandatory ILUC inclusion - is a commercial consideration that has prompted many major carriers to specify 2G feedstocks in their biofuel procurement contracts.

Second-generation feedstocks

Second-generation (2G) feedstocks are waste-derived or non-food lignocellulosic materials: used cooking oil (UCO), animal fats (tallow, Category 1 and Category 2 animal by-products under EU Regulation 1069/2009), forest residues (branches, bark, tops from commercial forestry), agricultural residues (straw, bagasse), and dedicated non-food energy crops grown on degraded or marginal land. ILUC factors for genuine waste streams are close to zero under RED II, because the feedstock has no alternative food use that would be displaced. Well-to-wake GHG intensities for waste-based HVO are typically in the range of 15–25 gCO₂eq/MJ, compared with 89 gCO₂eq/MJ for marine heavy fuel oil. The exact value depends on the system boundary, co-product allocation, and whether avoided emissions from alternative waste disposal are credited.

UCO has attracted the most attention as a marine biofuel feedstock because it is available in large volumes globally (principally from food processing operations in China, Southeast Asia, Europe, and the United States), commands a moderate feedstock premium over virgin vegetable oils, and yields FAME and HVO with favorable cold-flow properties. Verification of UCO provenance has become a significant compliance challenge, because fraudulent documentation of virgin palm oil or soy oil as UCO to claim ILUC-free status has been documented in multiple supply chains. Certifying bodies such as ISCC EU (International Sustainability and Carbon Certification) and the Roundtable on Sustainable Biomaterials (RSB) operate chain-of-custody certification to address this risk.

Tall oil, a by-product of the kraft paper pulping process, provides a sulphur-free fatty acid feedstock for HVO production in Scandinavian biorefineries. Preem’s EvolutionDiesel and St1’s HVO product both incorporate tall oil. Tallow from meat processing and Category 1 animal by-products from rendering plants are additional European 2G streams.

Third-generation feedstocks

Third-generation (3G) biofuels use microalgae or macroalgae as feedstock. Algae have high lipid productivities per unit area compared with terrestrial crops, require no freshwater or arable land when grown in seawater or brackish water, and can in principle be cultivated on CO₂-rich flue gas streams from industrial or marine sources. Microalgal species with high lipid content include Nannochloropsis, Chlorella, and Botryococcus braunii. Algae-derived lipids can be processed by transesterification or hydrotreatment to yield FAME or HVO with conventional properties. As of 2024, algal biofuel remains at demonstration and pilot scale; production costs are estimated at four to eight times those of UCO-based HVO, and no commercial-scale supply chain supplying marine bunkers from algal feedstock has been established. The primary technical barriers are the cost of harvesting dilute algal cultures (typically 0.5-1 g/L biomass concentration in open raceway ponds), the energy intensity of drying, and the capital cost of enclosed photobioreactors needed for consistent productivity. Research activity is ongoing through EU Horizon projects and national programmes in Norway, the Netherlands, and Japan, and the IMO’s GHG research programme has identified algal biofuels as a long-term pathway with potential relevance to shipping decarbonisation post-2035.

Life-cycle assessment and well-to-wake emissions

GHG intensity of marine biofuels is assessed on a well-to-wake (WtW) basis, covering extraction or cultivation of the feedstock, processing to fuel, distribution, and combustion. The system boundary divides into two stages: well-to-tank (WtT), covering everything up to delivery of fuel into the ship’s bunker tanks, and tank-to-wake (TtW), covering combustion and any onboard processing losses. The sum of WtT and TtW gives the WtW value. The IMO LCA Guidelines, adopted at MEPC 81 as MEPC.388(81) in April 2024, define a default WtW methodology for marine fuels, including default values for feedstock categories and a framework for operator-specific LCA values submitted with certification. The well-to-wake blend calculator supports mixed-pathway calculations, and the FAME well-to-wake calculator and HVO well-to-wake calculator provide individual pathway values.

Representative WtW GHG intensity values (gCO₂eq/MJ, lower heating value basis), drawn from published literature and MEPC.388(81) default values, are as follows. Marine HFO: approximately 89 gCO₂eq/MJ. MGO: approximately 87 gCO₂eq/MJ. Rapeseed FAME (no ILUC): approximately 45–60 gCO₂eq/MJ depending on agricultural practices. Soy FAME (no ILUC): approximately 50–65 gCO₂eq/MJ. Palm FAME (with ILUC): approximately 130–175 gCO₂eq/MJ (net increase relative to fossil baseline). UCO FAME: approximately 20–35 gCO₂eq/MJ. UCO HVO: approximately 15–25 gCO₂eq/MJ. Tallow HVO: approximately 30–45 gCO₂eq/MJ. Tall oil HVO: approximately 15–30 gCO₂eq/MJ. Algae HVO (projected, not commercially available): approximately 25–50 gCO₂eq/MJ.

These values illustrate that the range of GHG outcomes from biofuels is wider than for any other marine fuel category. A poorly documented palm FAME supply chain can produce a larger climate footprint than the HFO it replaces, while well-documented UCO HVO can achieve reductions of over 80% relative to HFO on a WtW basis. Certification of feedstock origin and supply chain is therefore a prerequisite for any regulatory credit, not an optional assurance measure.

The WtT component for UCO FAME includes the collection and transport of waste cooking oil from restaurants and food processors to a transesterification plant, methanol production (predominantly from natural gas reforming, which contributes approximately 3-5 gCO₂eq/MJ to the WtT budget), the transesterification process energy, and glycerol credit (or debit, depending on the market for the co-product). The TtW component for FAME is approximately 71–72 gCO₂eq/MJ as biogenic CO₂, which is conventionally counted as zero in regulatory accounting but is physically emitted. Processing energy for hydrotreatment of UCO to HVO is higher than for transesterification, owing to the hydrogen requirement, but the superior energy density of HVO partially offsets this.

Biogenic CO₂ from combustion is typically excluded from the tank-to-wake component of marine biofuel GHG calculations on the grounds that the carbon was recently fixed from the atmosphere during feedstock growth, and thus does not represent a net increment to atmospheric CO₂ over the relevant time horizon. This treatment is consistent with IPCC guidelines and with EU ETS treatment of biomass combustion, but it is contingent on the feedstock genuinely being grown in a manner that maintains or increases the carbon stock of the source ecosystem - the ILUC problem discussed above. For waste streams (UCO, tallow, agricultural residues) the biogenic assumption is straightforward; for purpose-grown crops on land previously supporting natural vegetation, it requires careful accounting.

Non-CO₂ warming agents from biofuel combustion are a subject of ongoing research. FAME combustion produces broadly similar NOx, particle matter, and black carbon profiles to petroleum diesel. Some studies report slightly higher NOx from FAME due to higher combustion temperatures associated with the ester group’s oxygen content; others find the differences within measurement uncertainty. Black carbon from HVO combustion tends to be lower than from petroleum diesel or FAME, reflecting the absence of aromatics. Under the IMO LCA framework in MEPC.388(81), non-CO₂ GHG warming effects are subject to a separate correction factor that may be applied to the WtW intensity value, though the default treatment focuses on CO₂eq.

The lifecycle fuel total cost of ownership calculator allows comparison of biofuel, LNG, methanol, and fossil fuel pathways on a cost-per-tonne-CO₂-abated basis.

Handling, storage, and operational characteristics

FAME-specific challenges

FAME presents several operational challenges that distinguish it from petroleum distillates and from HVO.

Oxidative stability. FAME molecules with polyunsaturated chains (two or more double bonds, as found in soy and sunflower methyl esters) are susceptible to auto-oxidation in the presence of oxygen, heat, and metal ions. Oxidation produces gums, peroxides, and organic acids that can block fuel filters, corrode fuel system components, and increase acidity (total acid number, TAN). ISO 8217:2017 specifies a minimum oxidation stability of 25 hours by the Rancimat method for distillate grades containing FAME. Antioxidant additives (hindered phenols, amines) are routinely added during FAME production, and the fuel’s storage life is typically six months without additive treatment versus 12 or more months with it. Blending with petroleum distillate dilutes the FAME concentration and partially mitigates oxidation risk at blend levels of B20 and below.

Hygroscopicity. FAME is miscible with water at the molecular level to a greater extent than petroleum diesel; it absorbs moisture from humid air and from water present in storage tanks. Water content above approximately 200 mg/kg promotes microbial growth and accelerates hydrolysis of the ester bond to yield free fatty acids (FFA), which are corrosive and less miscible with the fuel blend. Water bottoms accumulation in tanks storing FAME blends must be managed by frequent water drainage and tank inspection. The bunker microbial contamination calculator models the conditions under which microbial activity becomes a fuel quality concern.

Microbial contamination. Diesel fuel is susceptible to microbial contamination in general, but FAME provides a richer carbon and energy source for fuel-degrading bacteria, yeasts, and moulds (principally Hormoconis resinae, Pseudomonas spp., and sulfate-reducing bacteria). Microbial colonies at the fuel-water interface produce biosurfactants, slimes, and acidic metabolites. Biocide treatment - typically using isothiazolinone or formaldehyde-release biocides approved under the EU Biocidal Products Regulation (BPR) - is standard practice in road transport FAME storage but has been less consistently applied in marine bunker facilities. Port state control inspections and bunker surveys have recorded filter blockages and fuel pump corrosion attributable to FAME-related microbial contamination. The bunker biofuel compatibility calculator provides guidance on compatibility between FAME blends and existing fuel system materials.

Cold flow properties. FAME has a higher cloud point and cold filter plugging point (CFPP) than petroleum diesel of equivalent viscosity, because saturated fatty acid methyl esters begin to crystallise at temperatures that are within the operating range of vessels trading in northern European or Arctic waters. PME (palm methyl ester) has a CFPP of approximately +13°C; RME has a CFPP of approximately −14°C. Blending with lower-CFPP petroleum components improves cold-flow performance, and cold-flow improver additives are available. For vessels trading in sub-zero ambient temperatures, FAME content above B7 in the fuel blend requires verification against the expected temperature range. ISO 8217 specifies CFPP limits by climatic zone for distillate grades.

Materials compatibility. FAME can degrade certain elastomers and sealants used in fuel systems, including nitrile rubber (NBR) and some polyurethane compounds. Engine and fuel system manufacturers publish approved materials lists for use with FAME blends; most modern engines are rated for B20 or B30 without modification, and some for B100, but older installations with natural rubber or certain NBR seals may require parts replacement before transitioning to high-FAME blends. The ISO 8217 fuel quality checker validates fuel properties against specification limits.

HVO operational profile

HVO’s operational profile is essentially identical to that of MGO or ultra-low sulphur fossil diesel. As a fully paraffinic product, HVO has no aromatic content, no ester bonds, and no tendency to absorb water beyond the solubility limits of any normal paraffinic fuel. Microbial contamination risk is similar to MGO rather than elevated as with FAME. Cold flow properties depend on the isomerisation level applied during production; commercially available grades for marine use typically have CFPP values in the range of −10°C to −40°C.

HVO is fully miscible with petroleum diesel and MGO at any blend ratio. No special fuel system modifications are required for most engine platforms. Fuel injection timing and power output characteristics are unchanged from MGO operation. Neste and other producers have published compatibility data showing no adverse effect on fuel injection equipment, elastomers, or filtration systems when switching from MGO to HVO. The HVO renewable diesel summary calculator summarises the key property profile for comparison with MGO specifications.

Because HVO burns with a higher cetane number than fossil diesel, incomplete combustion products (soot, particulate matter, volatile organic compounds) are generally lower than with equivalent fossil fuel, a secondary benefit relevant to air quality in port areas and under the IMO’s MARPOL Annex VI requirements for NOx and PM.

BTL operational characteristics

BTL fuels share the paraffinic character of HVO and are operationally similar to fossil kerosene or marine gas oil. The primary distinction is cost and availability rather than any operational peculiarity. BTL production capacity globally is a fraction of HVO capacity, and supply chains for marine BTL bunkers have not yet been established at commercial scale. When available, BTL fuels can be blended with any proportion of fossil MGO or HVO.

Regulatory framework

IMO MARPOL Annex VI and CII

MARPOL Annex VI does not include a specific biofuel provision in its core articles. The carbon intensity indicator (CII) regime, applicable to ships of 5,000 GT and above under Regulation 28 and following of MARPOL Annex VI as amended, uses a carbon conversion factor (Cf) to convert fuel consumption into CO₂ emissions. The default Cf values listed in MEPC.1/Circ.905 assign biofuels the same Cf as the petroleum fuel they replace when no certification is submitted: a FAME blend at B30 would be calculated as if it were 100% petroleum diesel unless the shipowner provides documentation demonstrating the biofuel component’s lower GHG intensity.

MEPC 80 (July 2023) agreed that ships using certified biofuels may use a lower GHG intensity for IMO DCS annual reporting and for EEOI calculations, provided the ship submits a life-cycle assessment certificate from an accredited certifying body (ISCC EU, RSB, or an equivalent body recognised by the flag state). MEPC.385(81) (April 2024) provides updated guidelines on the use of biofuels under MARPOL Annex VI, including documentation requirements, chain-of-custody verification, and audit procedures.

The CII attained calculator accommodates alternative Cf values, allowing users to model the CII rating improvement achievable by substituting a certified biofuel blend. The what-is-cii article and the slow steaming and CII article provide context on how CII improvement strategies interact.

For EEDI and EEXI, biofuels currently receive no credit in the attained EEDI or EEXI calculation. Both indices are designed as design efficiency metrics for newbuildings (EEDI) and existing ships (EEXI), and the Cf used is fixed by the fuel type designated in the ship’s technical file without provision for fuel substitution credit at design stage. The EEDI attained calculator uses the standard fossil Cf values.

FuelEU Maritime

The EU’s FuelEU Maritime Regulation (EU 2023/1805), which entered into force on 1 September 2023 and applies to ships from 1 January 2025, places a declining cap on the annual average WtW GHG intensity of energy used by large vessels calling at EU ports. Certified biofuels count toward compliance at their actual WtW GHG intensity rather than at the fossil default, giving ships burning high-quality certified biofuels a direct compliance advantage.

The regulation follows the feedstock hierarchy of RED II. Biofuels from advanced (waste-based or lignocellulosic) feedstocks listed in Annex IX of RED II count at their full WtW reduction relative to the fossil comparator. First-generation biofuels from food crops are eligible but do not attract a multiplier. RFNBO (renewable fuels of non-biological origin, i.e. e-fuels) attract a ×2 multiplier against the GHG intensity reduction target; conventional certified biofuels do not receive this multiplier.

Under FuelEU Maritime, a ship that generates a surplus compliance balance by using low-intensity biofuels can bank that surplus or sell it to other ships through pooling. A ship that falls short of its target faces a penalty of €2,400 per tonne CO₂eq of shortfall from 2025. The FuelEU GHG intensity calculator and the FuelEU penalties and pooling article provide detailed computation support. The FuelEU Maritime explained article covers the full regulatory structure.

EU ETS

Under Regulation (EU) 2023/957 amending the EU Emissions Trading System (ETS) Directive, maritime shipping became subject to EU ETS from 1 January 2024, with a phase-in of 40% of verified emissions in 2024, 70% in 2025, and 100% from 2026. Biogenic CO₂ from certified biomass combustion is exempt from EUA surrender obligations, consistent with the treatment of biomass combustion in stationary installations. The certification requirement mirrors that of FuelEU Maritime: the biofuel must be certified under a scheme recognised by the European Commission (ISCC EU, RSB, or equivalent).

The fossil portion of a biofuel blend (e.g. the 70% MGO in a B30 blend) remains fully subject to ETS obligations. A shipowner burning B30 certified UCO FAME must surrender EUAs for 70% of the blend’s CO₂ at the applicable phase-in factor, and zero EUAs for the FAME portion. This creates a direct EUA cost saving proportional to the biofuel share and the prevailing EUA price. At an EUA price of €60/t CO₂ and a full 100% phase-in, the ETS saving from substituting B30 certified FAME for fossil MGO is approximately €18/t CO₂ per tonne of fuel blend, partially offsetting the biofuel price premium. The EU ETS EUA liability calculator models this calculation. The EU ETS for shipping article explains the broader framework, and the IMO DCS vs EU MRV article clarifies the relationship between reporting systems.

ISO 8217 specification limits

ISO 8217 is the primary quality standard governing marine fuel specifications. The 2017 edition defines maximum FAME content of seven per cent for distillate grades and zero for residual grades. The 2024 edition, published as ISO 8217:2024, extends the maximum permitted FAME content for certain distillate grades to accommodate higher-blend marine biodiesel products, including B30, and introduces provisions for paraffinic fuels (HVO) and Fischer-Tropsch products. Full ratification and uptake of ISO 8217:2024 across charter parties and bunker contracts is ongoing. The ISO 8217 fuel quality checker allows verification of fuel properties against both the 2017 and 2024 editions.

Commercial developments and pilot programmes

Early trials (2021-2022)

The Maersk-Cargill partnership conducted one of the first commercial-scale marine biofuel trials in 2021, bunkering a container vessel with B30 UCO FAME in the Port of Rotterdam for a North Europe-East Asia voyage. The trial confirmed that no operational anomalies occurred at B30 blend level, and the CO₂ intensity reduction was documented under IMO DCS. Nordic Bulk Shipping ran biofuel trials on bulk carriers operating in the North Sea and Baltic in 2021-2022 using RME-based blends.

MSC launched its FuelSave program from Rotterdam in 2022, offering biofuel-blended bunkers to cargo customers who wished to reduce the Scope 3 emissions footprint of their transported goods. CMA CGM conducted biofuel trials from the Port of Marseille in 2022 on both FAME blends and HVO, with results communicated to freight customers through its carbon footprint reporting service. Hapag-Lloyd reported use of biofuel blends on selected voyages in 2022-2023.

Scale-up (2023-2024)

By 2023-2024, marine biofuel procurement had shifted from trials to regular commercial supply on major trade routes, with several large carriers including Maersk, MSC, Hapag-Lloyd, and Evergreen entering into medium-term supply agreements with biofuel producers and bunker traders. Singapore, Rotterdam, and Fujairah emerged as the principal bunker ports for marine biofuel supply. Singapore’s Maritime and Port Authority (MPA) actively promoted the port as a biofuel bunkering hub, introducing a Green Lane for biofuel documentation from 2023, and reporting biofuel bunker volumes of over 300,000 tonnes in 2023. Rotterdam followed a similar trajectory, with the Port of Rotterdam Authority publishing biofuel bunkering guidelines and reporting growing uptake among containership and tanker operators. Japan’s Ministry of Land, Infrastructure, Transport and Tourism supported domestic biofuel bunkering pilots at Yokohama and Osaka in 2023.

Dry bulk operators including Pacific Basin Shipping and Star Bulk entered into biofuel supply contracts for vessels operating under carbon-linked time charters where the charterer bore the cost premium in exchange for verified emissions reductions in their Scope 3 inventory. The time charter party article discusses how fuel cost allocation clauses in time charters affect biofuel economics, and lifecycle chartering clauses for CII are addressed in a dedicated calculator. Tanker operators, whose vessels carry the petroleum and vegetable oil products from which biofuels are produced, have also been active biofuel consumers; the combination of cargo revenue, fuel cost, and CII compliance positions tanker segments as meaningful biofuel adopters.

The container shipping sector has been the largest single consumer of marine biofuels, driven by the concentration of Scope 3 reporting obligations among large consumer goods shippers (who charter container space) and by the high public visibility of sustainability commitments by shipping lines. Freight contract structures increasingly offer customers a “green premium” option where a portion of the fuel used on the nominated trade lane is replaced by certified biofuel, with the associated GHG intensity reduction credited to the cargo owner’s Scope 3 inventory. The documentation trail for these commercial structures - from biofuel BDN through shipping line sustainability certificate to cargo owner’s annual reporting - remains an area of active standardisation effort by the Clean Cargo Working Group and the Getting to Zero Coalition.

Price and availability

Indicative prices in 2024 for marine biofuel blends at major ports were in the following ranges: B30 FAME blend (with MGO base): US$800–1,100/t. B100 FAME: US$1,100–1,500/t. HVO (neat, ex-Rotterdam): US$1,400–1,800/t. These figures represent a premium of approximately US$350–700/t above fossil MGO prices at the same ports and time. Price volatility is high, driven by feedstock costs, renewable energy mandates in road transport (which compete for the same HVO supply), and exchange rate movements.

The fuel alternative premium calculator places biofuel price premiums in context relative to LNG, methanol, and ammonia alternatives on a cost-per-tonne-CO₂-abated basis.

Supply constraints and scalability

Global biofuel production (all sectors, all fuels) was approximately 180 million tonnes of oil equivalent (Mtoe) in 2024, of which road transport accounted for the large majority - approximately 100 Mtoe as biodiesel and renewable diesel, and approximately 70 Mtoe as bioethanol. The marine sector consumed approximately two to three million tonnes of biofuel equivalent in 2024 - less than one per cent of total bunker demand of approximately 300 million tonnes of fuel per year. Aviation consumed a further 5-7 Mtoe as sustainable aviation fuel (SAF), with rapid growth projected under EU SAF mandates and US Inflation Reduction Act tax credits.

A full substitution of the global bunker fuel supply by biofuels would require approximately 280–350 Mt of biofuel per year on an energy-equivalent basis. This figure is approximately twice the total current global biofuel production capacity, and would require deployment of a multi-fold increase in dedicated feedstock production, processing capacity, and supply chain infrastructure. Even partial substitution at 10% of bunker demand would require approximately 28–35 Mt/year, equivalent to roughly 15–20% of current global biofuel production.

The supply constraint is most acute for waste-derived 2G feedstocks. Global UCO collection is estimated at approximately 15–20 Mt/year, and not all of this is available for biofuel production due to competing demand from animal feed and oleochemicals. Tallow and animal fat availability is similarly bounded by the scale of the livestock industry - global rendering capacity produces approximately 15–20 Mt/year of animal fats, spread across several quality grades with different uses. Forest and agricultural residues have larger theoretical availability but face collection logistics constraints and competition from advanced biofuel mandates in aviation and road transport. The EU’s SAF mandate under RefuelEU Aviation creates a guaranteed demand growth pathway for advanced aviation biofuels that uses many of the same feedstocks as marine HVO, creating direct competition for limited 2G supply.

HVO production capacity has grown rapidly: global HVO production was approximately 15 Mt in 2023, with significant new capacity under construction or planned in Europe, North America, and Asia. However, much of this capacity was built primarily to serve road transport markets, where EU blending mandates and renewable fuel obligations provide guaranteed demand floors. Marine biofuel supply benefits from excess capacity at the margin; dedicated marine HVO terminals and supply chains are less developed.

Price dynamics reflect supply-demand balance in the waste feedstock market. UCO prices in Rotterdam rose from approximately €600/t in 2019 to peaks of over €1,400/t in 2021-2022 as demand from HVO and SAF producers expanded faster than collection infrastructure. UCO prices moderated to approximately €900-1,000/t in 2023-2024 as collection networks expanded in Asia and Eastern Europe, but remain structurally elevated relative to fossil feedstocks. This feedstock cost is the primary driver of the marine biofuel price premium over fossil bunkers.

The conclusion of multiple roadmaps published by the International Energy Agency (IEA), DNV, and IRENA is that biofuels can play a meaningful role as a transition fuel for shipping over the period 2025-2035, but are unlikely to provide more than 10–15% of shipping’s final energy demand on a sustainable basis by 2050. The binding constraint is sustainable feedstock availability, not production technology or ship compatibility. Biofuels are therefore viewed as a bridge rather than a terminal decarbonisation solution, complementing the development of green ammonia, green methanol, and other zero-carbon fuels. The ammonia as marine fuel article and methanol as marine fuel article discuss the longer-term zero-carbon pathways.

Comparison with other alternative marine fuels

Biofuels versus LNG

LNG as a marine fuel reduces WtW CO₂eq intensity by approximately 15–20% relative to HFO when methane slip from the engine is properly accounted for (the exact figure depends on engine technology and methane slip rate). This reduction is smaller than that achievable with waste-based HVO or UCO FAME, but LNG supply infrastructure is more developed at major ports. LNG requires cryogenic storage at −163°C, a major capital investment in ship and shore infrastructure that biofuels do not require. Biofuels can be bunkered using existing marine distillate infrastructure with minimal modification.

Biofuels versus methanol

Methanol as a marine fuel has emerged as a near-term alternative fuel with orders placed for methanol dual-fuel vessels by Maersk, CMA CGM, and others. Fossil methanol has a WtW GHG intensity similar to or slightly higher than MGO; bio-methanol (from gasification of biomass or waste) achieves significant GHG reductions, and e-methanol (from electrolytic hydrogen and biogenic CO₂) can approach near-zero WtW intensity. The methanol LCA calculator compares fossil, bio, and e-methanol pathways. Methanol has a lower volumetric energy density than marine biofuels, requiring tank volume approximately 2.5 times that of an equivalent HFO installation, and presents toxicity and low flashpoint handling challenges not shared by FAME or HVO.

Biofuels versus ammonia

Ammonia as a zero-carbon fuel remains at pre-commercial deployment stage for shipping. Green ammonia (from electrolytic hydrogen and atmospheric nitrogen) has near-zero WtW GHG intensity but requires significant engine technology development to manage NOx emissions and toxicity risks in bunkering and onboard handling. The ammonia as marine fuel article covers the technology status. Biofuels, in contrast, are immediately deployable in existing ships without engine modification, placing them at a different technology readiness level. The trade-off is that biofuels do not offer the near-zero WtW intensity achievable with green ammonia or green hydrogen over the long term unless algal or advanced feedstock pathways are fully realised.

Role in the decarbonisation pathway

The IMO’s 2023 GHG Strategy, adopted at MEPC 80, targets net-zero GHG from shipping by or around 2050, with indicative checkpoints of at least a 20% reduction in GHG intensity by 2030 and at least 70% by 2040 relative to 2008 levels. Biofuels can contribute to the 2030 checkpoint, particularly where ships substituting waste-based HVO or UCO FAME for HFO can demonstrate WtW intensity reductions of 70–85% on the biofuel share of their energy consumption.

The heavy fuel oil article and marine gas oil article provide the fossil baseline context against which biofuel reductions are measured. The specific fuel oil consumption article is relevant to understanding how fuel consumption rate interacts with fuel GHG intensity to determine total emissions. The ShipCalculators.com calculator catalogue provides tools covering all stages of the emissions and fuel management calculation chain.

Certification and documentation

A biofuel blend can receive GHG intensity credit under IMO DCS, FuelEU Maritime, and EU ETS only if the biofuel component is certified under a scheme recognised by the relevant authority. Uncertified biofuels are treated identically to the fossil fuel they replace for all regulatory purposes - a critical commercial point, since purchasing an uncertified biofuel blend at a significant price premium yields no compliance benefit.

Recognised certification schemes

ISCC EU (International Sustainability and Carbon Certification, EU scheme): covers the full supply chain from feedstock production to fuel delivery. ISCC EU certification requires audit by an accredited third-party certification body and annual renewal. Certificate holders are listed in a publicly searchable database. It is the most widely used scheme for marine biofuel documentation in Europe and internationally.

RSB (Roundtable on Sustainable Biomaterials): a multi-stakeholder standard with chain-of-custody requirements and social sustainability criteria in addition to GHG lifecycle requirements. RSB operates a global certification program applicable to all biofuel types and feedstocks. RSB certification is accepted under FuelEU Maritime and EU ETS.

2BSvs (Biomass Biofuels voluntary scheme): a French scheme recognised under RED II for biofuel sustainability verification, with particular use in the French and Francophone supply chains.

SURE (Sustainable Resources Verification Scheme): another RED II-recognised scheme operating mainly in Germany and the Netherlands, used by several major HVO producers in the region.

REDcert (Renewable Energies, Certification Scheme): a German scheme recognised under RED II, used extensively for rapeseed and UCO feedstocks in Germany and Central Europe.

Document chain requirements

For IMO DCS purposes, flag state recognition of the certifying body is required. The flag states that have published guidelines on biofuel documentation - Bahamas, Marshall Islands, Panama, Singapore, and Liberia among others - generally accept ISCC EU, RSB, and equivalent RED II-recognised schemes. The flag state’s administration retains discretion to reject a certification if the audit trail is incomplete.

The bunker delivery note (BDN) for a biofuel or biofuel blend must identify the biofuel component, its feedstock category, the biofuel volume and mass in the blend, and the certificate reference number of the certified supply chain holder. For FuelEU Maritime purposes, the BDN must also state the WtW GHG intensity value (in gCO₂eq/MJ) applicable to the certified batch. The ship’s fuel oil record book (FORB) entries must be consistent with BDN records and with any DCS or FuelEU reporting. Port state control officers from Tokyo MOU and Paris MOU have included biofuel documentation in expanded fuel quality inspections since 2023. Deficiencies noted have included BDNs lacking certificate numbers, FORB entries inconsistent with stated biofuel percentages, and missing custody-transfer documentation from the biofuel producer to the bunker supplier.

Charter party and commercial documentation for biofuel-blended bunkers has evolved rapidly. Shipowners, charterers, and cargo owners each have interests in the emissions credentials of biofuel use: shipowners need certified supply chain documentation to claim CII and DCS credit; charterers in time charter arrangements may have contractual rights to specify biofuel blends (or prohibit them) under the fuel specification clause; cargo owners purchasing emission-factor-linked freight contracts require BDN copies and certification references for their own Scope 3 reporting under GHG Protocol Corporate Standard or Science Based Targets initiative (SBTi) frameworks. The voyage charter party article and time charter party article discuss how fuel quality and emissions clauses are typically structured.

Fraud and supply chain integrity

UCO fraud - mislabelling virgin palm oil or soy oil as used cooking oil to obtain the ILUC-free certificate status and associated price premium - has been investigated by EU customs and ISCC auditors on multiple occasions since 2020. The European Anti-Fraud Office (OLAF) published findings in 2022 documenting imports of allegedly UCO-derived biofuel from Chinese and Malaysian producers that contained markers inconsistent with genuine waste-oil processing. The response from certification bodies has included tightened sampling and isotopic tracing requirements, and the European Commission published guidance in 2023 on enhanced scrutiny for UCO shipments from countries with limited domestic restaurant-sector collection infrastructure relative to their biofuel export volumes. Shipowners and fuel traders purchasing UCO-based marine biofuels bear reputational and compliance risk if fraudulent certification is discovered post-delivery, since regulatory authorities may disallow the GHG credit retroactively.

See also

References

  1. IMO MEPC.385(81), Guidelines on the use of biofuels under MARPOL Annex VI, April 2024.
  2. IMO MEPC.388(81), 2024 Guidelines on life cycle GHG intensity of marine fuels, April 2024.
  3. IMO MEPC.1/Circ.905, Clarification of the method of calculation of the attained EEDI for ships using certain types of fuel, October 2022.
  4. ISO 8217:2017, Petroleum products - Fuels (class F) - Specifications of marine fuels, International Organization for Standardization.
  5. ISO 8217:2024, Petroleum products - Fuels (class F) - Specifications of marine fuels, International Organization for Standardization.
  6. European Parliament and Council, Regulation (EU) 2023/1805 on the use of renewable and low-carbon fuels in maritime transport (FuelEU Maritime), 13 September 2023.
  7. European Parliament and Council, Directive 2018/2001/EU on the promotion of the use of energy from renewable sources (RED II), 11 December 2018.
  8. European Commission, Delegated Regulation (EU) 2019/807, on indirect land-use change (ILUC) factors for biofuels, 13 March 2019.
  9. Neste Corporation, Neste MY Renewable Diesel - Technical Product Data Sheet, 2023.
  10. International Energy Agency, Tracking Clean Energy Progress: Bioenergy, IEA, Paris, 2024.
  11. DNV, Energy Transition Outlook 2024: Maritime Forecast to 2050, Det Norske Veritas AS, 2024.
  12. IRENA, Biofuels for Maritime Shipping: A Renewable Energy Perspective, International Renewable Energy Agency, 2021.
  13. MAN Energy Solutions, Engineering the Future Two-Stroke Green-Ammonia Engine, Technical paper 5510-0533-02, 2022 (includes HVO approval data for ME-C engines).
  14. Wärtsilä Corporation, Alternative Fuels - Wärtsilä Marine Products and Systems, 2023 (includes HVO operational approval).

Further reading

  • D.Y.C. Leung, X. Wu and M.K.H. Leung, “A review on biodiesel production using catalyzed transesterification”, Applied Energy, 87(4), 2010.
  • B. Fahd et al., “Review of biofuel sustainability certifications used in shipping”, Marine Policy, 2023.
  • ECOFYS / CE Delft, LCA of marine biofuels: a comparison of FAME and HVO from various feedstocks, 2021.
  • Paris MOU, Annual Report 2023, Paris Memorandum of Understanding on Port State Control.