Due Diligence Required as More Biofuel Feedstocks Used

Why It Matters

The guidance highlights biofuels as the fastest‑acting pathway to meet tightening maritime GHG rules, while exposing compliance and supply‑chain risks that could affect ship owners and fuel suppliers.

Key Takeaways

• Biofuel testing rose twelvefold, surpassing 1 million MT
• Current blends 5‑10% meet 2022 FuelEU mandates
• 30‑40% bio content needed for IMO 2040 target
• HVO offers best performance but faces supply constraints
• Certification, UDB IDs essential for safe bunker transfers

Pulse Analysis

Regulatory pressure is reshaping the maritime fuel market. The European FuelEU Maritime framework already forces a 2% GHG intensity cut, and the IMO’s 65% well‑to‑wake reduction by 2040 pushes bio‑fuel blends toward 30‑40% content. By 2035 and 2050, the required bio share climbs to 14.5% and 80% respectively, making biofuels the most viable short‑term decarbonisation tool for ship owners seeking drop‑in solutions without major engine modifications.

Feedstock diversity adds complexity to this transition. Hydrotreated Vegetable Oil (HVO) mimics conventional diesel and offers predictable performance, yet its cross‑industry demand limits marine availability. Fatty Acid Methyl Esters (FAME) are more established, while novel inputs like Cashew Nut Shell Liquid (CNSL) introduce corrosion and stability concerns despite recent refining advances. Industry bodies such as ISO and CIMAC are called upon to standardise testing protocols, and robust chain‑of‑custody documentation becomes essential to verify sustainability claims and prevent quality surprises.

The market response is already evident: testing volumes have surged twelvefold, exceeding one million metric tonnes, reflecting heightened buyer scrutiny. NorthStandard’s recommendation to require Union Database transaction IDs linked to bunker delivery notes adds a digital layer of traceability, reducing fraud and ensuring compliance. As shipping firms scale bio‑fuel use, they must embed rigorous due‑diligence, audit frameworks, and real‑time reporting into contracts, positioning themselves to meet future emissions targets while safeguarding operational reliability.