China launches first marine biofuel blending pilot in Zhoushan

China has launched its first pilot program for the blending and export of marine biofuel oil, after the Ministry of Commerce approved Zhoushan city to carry out bonded blending operations.

The approval allows Zhoushan, part of the Zhejiang Pilot Free Trade Zone, to blend marine biofuel oil domestically for export, marking a policy shift aimed at reducing China's reliance on imported biofuel bunkers and strengthening its position in the global green shipping fuels market, the Zhoushan department of commerce said on its official WeChat account on Feb. 9.

The authorities said a dedicated regulatory framework governing biofuel blending and mixing has been released alongside the approval, clearing the way for commercial pilot deliveries. The first pilot order is expected to be completed by the end of February.

The move comes as the global shipping industry accelerates its transition toward lower-carbon fuels, with marine biofuels emerging as a near-term compliance option under tightening emissions rules. Singapore, the world's largest bunkering hub, supplied about 1.36 million metric tons of biofuel oil in 2025, up 55.6% year over year, while China bunkered roughly 150,000 mt over the same period, largely relying on imports.

Around 60,000 mt of that volume was supplied at Ningbo-Zhoushan Port, which became China's largest bonded marine biofuel supplier in 2025, according to customs data.

"Allowing local blending fundamentally changes the supply model," an official at the Zhoushan Municipal Bureau of Commerce said, adding that the policy would enable independent production and export of marine biofuel oil. Zhoushan is expected to emerge as a key biofuel supply hub for China and Northeast Asia, the official statement said.

The locally blended marine biofuel could reduce costs by about $80/mt compared with imported product, improving competitiveness for shipowners bunkering in Chinese ports. Authorities said additional economic benefits are expected through the extension of the domestic supply chain, including feedstock processing, storage, logistics and financial services.

Zhoushan supplied about 8.02 million mt of bonded marine fuel in 2025, potentially ranking it as the world's third-largest bunkering port by volume. Market participants said the addition of domestic biofuel blending could further enhance its appeal to international shipping lines seeking compliant fuels without operational disruption.

The pilot also aligns with China's broader push to develop green fuel hubs along its eastern seaboard. Ningbo-Zhoushan Port has already diversified into LNG bunkering and completed Zhejiang province's first marine green methanol bunkering transaction in 2025, signaling a multifuel transition strategy.

China's marine biofuel development has lagged behind global leaders due to regulatory constraints on blending and export, despite the growing availability of waste-based feedstocks such as used cooking oil. Traders said the Zhoushan pilot could reshape regional trade flows if replicated at scale, potentially reducing Asia's dependence on Singapore-origin biofuel blends over the medium term.

Authorities said the pilot program will initially focus on responding to near-term market demand while refining operational processes, with the aim of establishing a replicable management framework for a wider rollout.

Platts, part of S&P Global Energy, assessed Singapore-delivered B24 high-sulfur biobunkers at a premium of $229/mt over the FOB Singapore 380 CST 3.5%S fuel oil cargo assessment on Feb. 5, up $5/mt week over week.

Platts assessed Singapore-delivered B30 high-sulfur biobunkers at a premium of $272/mt over the FOB Singapore 380 CST 3.5%S fuel oil cargo assessment on Feb. 5, down $3/mt week over week.