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Scarce supply of biofuel in future

08 June 2023

According to a new report from DNV, biofuels can have a major impact on the shipping industry´s journey towards decarbonization. To fully decarbonize shipping using biofuels would require up to half of all sustainable biofuel by 2050, the shipping consultancy predicts.

Now that the shipping industry is seriously getting ready to meet the demands for reduced emissions, the use of biofuels is also increasing. Today, the global production capacity for sustainable biofuels is around 11 million tonnes of oil equivalents (Mtoe) per year, DNV writes in the report "Biofuels in shipping". It will of course not be enough in the long run, but  DNV believes production could increase by 500 to 1300 Mtoe annually, until 2050. However, to fully decarbonize shipping using biofuels, in combination with energy efficiency measures, an annual supply of 250 Mtoe of sustainable biofuels is required by 2050. This would represent 20-50% of potential global production. 

“Biofuels are poised to play a notable role in the decarbonization of shipping. Nevertheless, existing constraints on production capacity and competition from other sectors is likely to impact short-term supply to the maritime industry,” said Eirik Ovrum, Principal Consultant in DNV Environment Advisor

An enormous build-up of production capacity worldwide is therefore needed before biofuels can reach their full potential. Therefore, it is unlikely that biofuels will be the only solution to the transformation of shipping. Instead, DNV believes that several different alternative fuels in combination with energy efficiency measures will be the way forward.

New regulations and instruments, such as the EU Emissions Trading System (EU ETS), constitute a strong incentive for greater use of both biofuels and other alternative fuels. It also means that the competition for biofuels and biomass will be fierce, not only between shipping companies but also between different sectors that need to reduce their carbon dioxide emissions. These resources are also currently being used in cooking, water and space heating, as well as timber and pulp and paper production posing some challenges to production capacity and availability, writes DNV.

Today, shipping uses the equivalent of 280 Mtoe of fuel per year, and after studying the bunkering of biofuel blends in Singapore and Rotterdam, DNV estimates that biofuels currently make up around 0.1% of maritime energy consumption.

To the report

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