APPEC: Marine biofuels deployable near term, but feedstock availability constrains growth

Marine biofuels are emerging as a readily deployable near-term decarbonization option for the shipping sector, although tightening feedstock availability constrains growth as demand scales, industry participants told Platts at APPEC 2026 in Singapore.

Biofuels are the "lowest hanging fruit" among lower-carbon marine fuels because they are relatively easy to blend and incorporate into existing engines, Nathanael Lin, partner for shipping and international trade at Rajah & Tann Singapore, said at a shipping panel Sept. 10.

The sector can also draw on broadly similar storage infrastructure for conventional fuels, as well as on financiers and underwriters already familiar with the products, reducing barriers to adoption, Lin said.

The Maritime and Port Authority of Singapore data shows that biobunker sales in the world's largest bunkering hub retreated to around 39,000 mt in July, accounting for less than 1% of the total bunker sales in the month, compared to 135,000 mt in the same month the previous year. For the first seven months of 2026, total biobunker sales stood at 457,000 mt, down from 907,900 mt in the same period the previous year.

Platts, part of S&P Global Energy, assessed Singapore-delivered B24 low-sulfur biobunker premiums at $232/mt over the Platts FOB Singapore Marine Fuel 0.5%S cargo assessment Sept. 10, down $2/mt week over week. Singapore-delivered B30 low-sulfur biobunker premiums fell $3/mt over the same period to $267/mt.

In the high-sulfur segment, Singapore-delivered B24 high-sulfur biobunker premiums were assessed at $244/mt over the Platts FOB Singapore 380 CST 3.5%S fuel oil cargo assessment, down $6/mt week over week. B30 high-sulfur bio-bunker premiums were assessed at $293/mt, down $9/mt over the same period.

Shipowners are already expanding their use following trials.

NYK Line's biodiesel consumption increased by "more than 40 times or even 50 times" from 2023 levels after the Japanese shipowner completed a six-month B24 trial under Project LOTUS with the Global Center for Maritime Decarbonization, according to Ryogo Nakajima, decarbonization promotion team lead at NYK.

The trial found no issues with longer-term B24 use under the tested conditions, Nakajima said. NYK is now undertaking an almost year-long B100 trial to assess the effects of higher-purity biodiesel on its vessels and engines.

However, greater adoption is putting the availability and aggregation of sustainable feedstocks increasingly in focus.

"B24, B30, they're definitely scalable; however...not indefinitely," Chris Chatterton, maritime director at the Global Center for Green Fuels, said at a separate low-carbon marine fuels panel.

Rather than focusing solely on increasing blend ratios, the industry needs to broaden the pool of available feedstocks to support further growth, Chatterton said.

Feedstock constraints are also emerging as a hurdle to financing new biofuel projects.

"The aggregation is a problem," said Karthik Sathiavageeswaran, executive director for energy, renewables, and infrastructure at DBS Bank.

While technology risks for many projects are increasingly manageable, some developers seeking capital "really can't demonstrate sustainable feedstock that comes in," he said. Feedstock supply is therefore becoming a key consideration in determining whether projects can secure financing and move toward commercial scale.

Near-term prospects for biofuels come amid longer commercialization timelines expected for some other low-carbon marine fuels. Juwita Setiawan, trading manager at Sing Fuels, said she expected biofuels and LNG to lead alternative marine fuels in the near term, followed by methanol in the medium term, while synthetic fuels could become more important as emissions targets tighten toward 2040 and beyond.

S&P Global Energy expects the traditional bunker fuels' share will decline from 85% in 2030 to 26% in 2060 globally on an energy basis, where bio-blends will be used to help vessels comply with tightening EEXI regulations, and their adoption is increasing due to the drop-in nature, typically up to 30%, according to the alternative bunker fuel long-term outlook released Aug. 25. The share of alternative bunker fuels is expected to reach 30% of the fuel mix by 2060, while methanol leads in the short-term and ammonia takes highest market share of 22% by 2060.

Despite biofuels' near-term advantage, shipping is unlikely to converge on a single replacement fuel. Chatterton said, "Optionality is very high on the agenda for bankability," as shipowners seek greater flexibility across multiple fuel pathways.

MPA has highlighted at APPEC 2026 that Singapore has been preparing for a future of the most diverse fuel mix in shipping history.