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Dubai's RTA expects 'most' small vessels on creek to use biofuel after ENOC rebate

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Dubai's RTA expects 'most' small vessels on creek to use biofuel after ENOC rebate

Highlights

Rebate is Dirham 0.03/liter to start

UAE diesel price increased to Dirham 2.42/liter for July

Biodiesel 5 is 95% diesel, 5% biofuel

Dubai's Roads & Transport Authority expects "most" wood boats sailing on the Dubai Creek to take advantage of biofuel being offered with a rebate as of July 1 by refiner ENOC Group with UAE diesel prices on the upswing.

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The biofuel is being offered with a rebate of Dirham 0.03/liter for each cash transaction of biodiesel 5 for the first five months, and then Dirham 0.05/liter after, the RTA said by email in response to questions from S&P Global Platts. The UAE's diesel cost was increased for July to Dirham 2.42/liter from Dirhams 2.30/liter in June following the rally in oil prices.

The UAE currency is fixed to the US dollar at a rate of 0.27 cents per Dirham.

A test conducted using five traditional wood boats known as 'Abras' powered by biodiesel 5 -- which is officially certified in the UAE -- was successful last year, with no damage to engines using the biofuel, the RTA said in announcing the new fuel program for wood boats on June 6. Biodiesel 5 contains 5% biodiesel and 95% ordinary diesel fuel. RTA and ENOC Commercial and Industrial Products are providing the biodiesel 5 at the Sabkha station on the canal starting July 1.

"We expect most of Abra operators to use the biodiesel 5 due to the prime location of supply station and due to the discount that will be given," RTA told Platts. There are 148 traditional Abras wood boats operated by the private sector on the Dubai Creek, consuming 1.1 million liters/year of diesel, according to RTA. The vessels ferry about 13 million riders annually, or 90% of all marine traffic in Dubai.

The potential of biofuels as marine fuel is being explored by other ports and for bigger vessels as the International Maritime Organization's decarbonization goals loom.

In April 2018, IMO laid out its strategy on greenhouse gas emissions, aiming to cut the shipping industry's total GHG emissions by at least 50% from 2008 levels by 2050, and reduce CO2 emissions per transport work by at least 40% by 2030.

Uniper Energy DMCC and Neutral Fuels this year began offering a blend of used cooking oil and VLSFO to ships at the Port of Fujairah. Uniper Energy operates one of two refineries at Fujairah providing fuel oil for shipping.

Global resources company BHP, German shipping company Oldendorff Carriers and biofuels company GoodFuels, with the support of the Maritime and Port Authority of Singapore, recently successfully completed the first marine biofuel trial involving an ocean-going vessel bunkered in Singapore.

In 2020, Singapore-based tonnage provider Eastern Pacific Shipping (EPS) partnered with GoodFuels to supply biofuel bunkers for its 2010-built 47,377 dwt MR tanker M/T Pacific Beryl.

The successful bunkering, which took place Oct. 9 in Dutch waters, is in line with EPS' environmental, social and governance policy, EPS said in statement last year.