South Korean biofuel trader GF Oil is in talks with the country’s Ministry of Oceans and Fisheries about the possibility of supplying biofuel-based bunkers.
GF Oil was established in 2012 to market biofuel to industrial users as a means of reducing greenhouse-gas (GHG) emissions.
Now the company is promoting biofuel as compliant with the International Maritime Organization’s (IMO’s) global sulphur cap, which will come into effect in 2020. The regulation restricts sulphur content in marine fuels to 0.5% from its current limit of 1%.
A company representative told IHS Markit, “Biofuel is expected to be easily applicable to vessels because it has similar physical properties and combustion efficiency to cSt 380 marine fuel. Particularly, the sulphur content is only 0.01%, which makes it compliant with the 2020 regulations,” he said.
In order to ensure a sufficient supply of biofuel, GF Oil said it plans to build a stockpile of crude palm oil at a 78,000 m2 site in the Bintan Free Trade Zone in Bintan Island, Indonesia. The goal is to supply about 200 million tonnes of biofuel by procuring palm oil from Indonesian-South Korean palm oil producer Korindo.
“With a stockpile, we can cut production costs and stabilise supply. Costs and unstable supply have been the weaknesses of biofuel production,” GF Oil said.
“Another factor that favours biofuels is the rising price of crude oil. Emissions of sulphur oxides and nitrogen oxides from biofuel are very low, and we believe that biofuel will be able to compete with refined products and LNG.”
GF Oil is believed to be the first Asian company to propose biofuels as ship fuel.
This month, Dutch biofuel trader GoodFuel (no relation to GF Oil) announced efforts to market its products directly to shippers in a bid to persuade shipowners to use clean fuel.