REG, Bunker Holding team up to develop bio-based bunker fuel for US, Europe

Renewable Energy Group (REG) has teamed with Bunker Holding Group, the world's largest trader and supplier of marine fuels, to develop sustainable bio-based diesel fuel for US and European markets.

The agreement allows US-based biofuel producer REG to expand its fuel offerings and access to the 70 billion gallon or 230 million mt global bunker fuel market through Bunker Holdings' expansive trading and distribution network.

"This collaboration agreement is initially focused on opportunities in North America and Europe, where trials of B20 and B30 are being run in high-traffic regions of both continents," the statement said.

B20 and B30 are petroleum-based blended fuels with a biofuel content of 20% and 30%, respectively.

"As conventional fossil fuel continues to power most of the world's marine fleet, we are thrilled to engage in this collaboration with REG. It not only further strengthens our supply chain of alternative fuel, but also deepens our know-how and insight of biofuels," Christoffer Berg Lassen, an executive with Bunker Holding, said in the statement.

Shippers look to decarbonize

Putting a price on carbon fuels in the bunker market is gaining traction as the maritime industry looks to cut greenhouse gas emissions by 50% by 2050, industry sources said.

This is increasing demand for biofuel bunker as shippers look to lower the carbon intensity of their fuels. Shipping company Unifeeder said it bunkered its first 100% biofuel from energy company VARO at the Dutch bunker hub of Rotterdam on Feb. 8.

And prices of conventional 0.5% sulfur bunker fuel are rising, in line with soaring crude oil prices as Brent moves over $90/b. Bunker barge prices in Rotterdam averaged $674/mt for the week ended Feb. 18, up from the $668/mt average for the week earlier, according to S&P Global Platts price assessments.

Prices of biodiesel are also rising as renewable feedstock costs are increasing on tight supplies. Northwest Europe FAME RED biodiesel barge prices averaged $1,742/mt for the week ended Feb. 18, compared with the $1,709/mt the week earlier.