LR: Widespread biofuel adoption in shipping hindered by feedstock availability and competition demand

The widespread adoption of biofuels as a drop-in replacement for fossil fuels and a cost-effective way of meeting tightening regulations in the shipping industry hinges on overcoming challenges such as feedstock availability and demand competition from other transport sectors, Lloyd’s Register (LR) found in the new report.

The new Fuel for Thought: Biofuel report explores biofuels as a path to compliance with environmental regulations for ships for which retrofits to adopt other future fuels are not economically feasible, identifying the main challenges to be addressed for their widespread deployment.

As ‘drop-in’ replacements for traditional fuels, biofuels require minimal changes to machinery and operations and offer greenhouse gas (GHG0 emissions savings of up to 84% compared to traditional fuels. 

The similarities between biofuels and their fossil equivalents and the ability to blend biofuels with traditional fuels make adopting biofuels a comparatively straightforward process for shipowners compared to other alternative fuels, LR explains.

Biofuels are generally compatible with existing onboard machinery and fuel tanks, use the same bunkering infrastructure as fossil equivalents, and their similarity to traditional bunkers means training requirements for the crew are minimal compared to other future fuels.

The most established products suitable for shipping are fatty acid methyl ester (FAME) and hydrotreated vegetable oil (HVO), and novel fuels continue to be developed.

According to the LR report, the main challenges for widespread deployment are availability and demand competition from other transport sectors, including aviation, and the investment in biofuel production capacity that will be needed to meet the growing demand from the transport sector. The price of biodiesel blends is expected to rise alongside blending levels as feedstock prices are driven higher by demand.

Tim Wilson, Principal Specialist Fuels Lubes and Emissions, Lloyd’s Register, said: “Biofuels are unique among the future fuels for shipping as the vast majority of the world fleet is equipped with engines that can use them. As a drop-in replacement for fossil fuels, biofuels are an available and affordable method of reducing carbon emissions in the short term without large capital investment. The range of biofuel trials across ship segments and biofuel types reflect a strong level of interest from shipowners in their use onboard.”