Co-processing FAQs
What is Fuel-EU compliant VLSFO?
Fuel-EU compliant VLSFO or MGO refers to marine fuel that meets the sustainability and greenhouse gas reduction requirements set by the FuelEU Maritime Regulation. This regulation aims to reduce the carbon intensity of shipping fuels by incorporating biofuels, advanced feedstocks, or other sustainable components into traditional marine fuels. In the first period from 2025 to 2030 there is a requirement of a 2% reduction on GHGi (greenhouse gas intensity) from the baseline to achieve 89.34 g/mtCO2e. Conventional RMG VLSFO is 91.74 g/MTCO2e. By co-processing crude oils with biogenic material a bespoke lower GHGi fuel can be produced to meet the regulations, or if preferred with higher concentrations of biogenic material for a much lower GHGi fuel.
What is co-processing in a refinery?
Co-processing in a refinery involves blending renewable feedstocks (such as waste bio-based oils or fats) with traditional fossil-based crude oil during the refining process. This method produces fuels with a lower carbon footprint while maintaining the same quality and performance characteristics as conventional fuels. The refining process removes the issues of directly consuming some biogenic fuels in the ship’s engines.
What is the feedstock?
Feedstock refers to the raw materials used to produce a fuel. For Fuel-EU compliant VLSFO, feedstocks may include renewable sources such as animal fats, used cooking oil, or other advanced bio-based materials such as nut shell liquids. These are processed alongside traditional crude oil to create a sustainable fuel blend in the same way that multiple streams of crude oil are processed in a refinery to make differing oil products. The sustainability element of the feedstock can then be assigned to the appropriate product, in line with the product crack. Both sustainability attached VLSFO and MGO can be produced this way
Will the feedstock affect my engine – will I need class approval for the bunkers?
The feedstock used in Fuel-EU compliant VLSFO is processed to meet the same technical specifications as conventional marine fuels such as RMG ISO 8217. In contrast to UCOME based B30, there will be no physical blended biogenic content within the fuel oil and the proof of sustainability can be assigned to any percentage to give co-processed B3 (2025 FuelEU compliant), B8 (2030 FuelEU Compliant) or any increased apportioning of the sustainability to B30, B50 or B100 at the buyers choice. Because it is not blended biogenic but co-processed material then the Nox restrictions do not apply which is the limit for UCOME based biofuels to maximum B30 as per the unified interpretations under MARPOL.
What will the BDN say?
The Bunker Delivery Note (BDN) will specify the fuel’s compliance with ISO 8217 standards and include details about the renewable component of the fuel. A BDN can be issued for just the sustainable element for the fuel, separate to the fossil element, or it can be combined to the blend the buyer requests
What will the proof of sustainability say?
The proof of sustainability confirms that the raw feedstock used complies with sustainability criteria, such as greenhouse gas reduction thresholds and traceability requirements, as outlined by regulatory frameworks and in accordance with the ISCC-EU certification. It will state the sustainable source of the product that was used during the co-processing and the GHGi of the delivered fuel and be described as co-processed oil. This can then be submitted to the classification society at the end of the compliance period.
How do I stow the fuel on board – when can I consume it?
Fuel-EU compliant VLSFO should be stored in segregated tanks, and noted in the bunker logs when the parcel is consumed which needs to be on a leg to/from or within the EU in order to meet the regulatory requirements. Shipowners should refer to their FUEL-EU Maritime verifier on how to report the consumption.
Can this fuel reduce my ETS exposure?
Yes – ETS is a tank to wake metric and the fuel on board is VLSFO hence emissions will be taxable under the ETS scheme, however as the feedstock is greater than 70% reduction of GHGi than the fossil equivalent then the percentage quantity of the sustainability of the fuel assigned can be used to reduce the ETS exposure. A co-processed Fuel-EU compliant B3 will allow the shipowner to surrender 3% fewer allowances, whilst a B100 would mean no allowances would need to be surrendered. The fuel can also be used to reduce Scope 3 emissions.
How much does it cost?
Fuel-EU compliant VLSFO will be priced competitively to the market alternative which would be blended biofuels without engine compatibility issues or a limitation maximum percentage of sustainable product from the carriage in the bunker vessel to the engine.