Fujairah port to expand biofuel footprint with major SAF plant, bio-bunker milestone

Biofuels developments are picking up at the UAE's Port of Fujairah with Bahrain-based Mercantile & Maritime poised to move ahead with a major sustainable aviation fuel plant and Vopak making its first biofuel supply to a ship at its Vopak Horizon Fujairah joint venture.

Oil traders Mercantile & Maritime expects to make a final investment decision in May for its proposed biofuels plant at the port, the company's investment director Sam Turton told Platts March 19.

The plant, with a production capacity of 150 million liters/year of sustainable aviation fuel, would add to its existing storage terminal MENA Terminals which is also at the port, Turton said.

Mercantile & Maritime has been allocated just under 100,000 square meters of land by the Fujairah Oil Industry Zone for the biofuels plant, in addition to its 40,000 square meters for its existing storage, he said.

Survey work has been completed and the licensor section is now underway to provide the technology for the operating units, according to Turton.

Platts, part of S&P Global Energy, assessed biodiesel FOB Southeast Asia at $1,202/mt on March 19, extending gains from a recent low of $1,127/mt in January. Shippers have complained that biofuels are too expensive relative to traditional fuels.

The spread between bio-bunkers and conventional fuel is pronounced. Platts assessed the B30 bio-bunker fuel based on used cooking oil at Rotterdam at $786.75/mt March 18, a 59% premium to delivered 0.5% sulfur fuel oil. That premium has grown from 34% when the bio-bunker assessment was launched in October 2023.

Mercantile & Maritime had previously said it expects the SAF plant expansion to account for nearly 10% of global SAF production once operational.

Meanwhile, Vopak supplied its first biofuel for use by a ship in the UAE at its Vopak Horizon Fujairah terminal in Fujairah in line with the UAE's net zero by 2050 strategy, it said in a March 11 statement. Vopak supplied B24 bunker fuel, a blend of 24% FAME biofuel with very low sulfur fuel oil, it said.

Fujairah is a significant bunker hub. Ship fuel sales at the world's third-largest bunkering hub rose 1.8% in 2024 to 7.67 million cu m from a record low in 2023, according to S&P Global Energy data since 2021. The slight uptick came as ships started resuming voyages through the Red Sea and sanctions against Russian ships increased demand for Middle East tankers.

Amid this, demand for alternative bunker fuels at the port is minimal and this will likely hamper supply, according to bunker industry professionals. Geographically, Fujairah has been well-placed to capitalize on tanker trades, a segment where shipowners have shown limited investment appetite for vessels running on alternative fuels. This, along with good availability of oil, means Fujairah does not really need to diversify away from conventional bunker fuels, consultancy 2050 Marine Energy's owner Adrian Tolson told Platts.

Currently, Vopak has 32 terminals within its global network to store sustainable products such as sustainable aviation fuel and other biofuels and feedstocks, the company said.