Vitol targets biofuel expansion in Singapore in 2024 with specialized bunker barges

From early next year, energy and commodities company Vitol plans to expand the supply of biofuels in Asia with the delivery of specialized bunker barges in Singapore.

Namely, the company is sending its specialized bunker barges to Singapore, and through its wholly-owned subsidiaries V-Bunkers and Vitol Bunkers will be able to offer a range of biofuel blends, from B24, and B30 up to B100.

Currently, all vessels delivering bunker fuel in Singapore are oil tankers, which are permitted to only supply fuel blended with biofuel up to 25% concentration. For greater biofuel concentrations, the IMO regulations stipulate the introduction of an ‘IMO Type 2 chemical tanker’.

The first IMO-Type 2 barge ordered by V-Bunkers will be delivered in January, to be followed by several more throughout 2024. Depending on demand, these vessels could also be upgraded to supply methanol, Vitol said.

To remind, Vitol has partnered with Shift Clean Energy and SeaTech to deliver Singapore’s first hybrid bunker tankers. As part of the project, up to four hybrid tankers will be designed by SeaTech using Shift’s energy storage systems (ESS).

Demand for biofuel is expected to grow significantly in the coming years, as the shipping industry looks at ways to decarbonize and curb emissions.

Bio and e-methanol are also significant pathways for the industry to achieve decarbonization and there have been a number of specialist dual-fuel methanol-powered vessels on order for delivery starting next year.

“The delivery of specialist barges is an exciting development for Vitol and its sustainability offerings in Asia,” said Mike Muller, Head of Vitol Asia.

“As the shipping industry steps up its pursuit of decarbonization solutions, barges that can deliver bunker fuel with a much higher concentration of biofuels represents a material step in the right direction.”

Biofuels, which can be in the form of methane, methanol, or fuel oil/gas oil blends, are seen as a convenient way for shipping companies to reduce their carbon emissions due to their ability to be used as a ‘drop-in fuel’.

In Singapore, volumes of B24 biofuel have increased, with sales of more than 50kt in August, according to the Maritime and Port Authority of Singapore (MPA). And year-to-date sales are already more than double those in 2022.

This trend is expected to continue into 2024, particularly with the International Maritime Organisation’s (IMO) interim guidelines on biofuels becoming effective from 1st October 2023. These stipulate that certified biofuel will be able to reduce a vessel’s Carbon Intensity Indicator (CII) due to its near-zero carbon factor on a well-to-wake (WTW) basis.