Global marine biodiesel demand is significantly increasing. According to forecasts from the International Energy Agency (IEA), this demand will rise from nearly 1 billion liters in 2025 (about 890,000 tons) to almost 2 billion liters in 2031 (about 1.78 million tons). This forecast is made without the approval of the greenhouse gas emissions neutralization framework by the International Maritime Organization (IMO).
Demand Analysis and Its Impacts
Despite this increase, marine biodiesel will only account for 0.6 percent of total marine fuel consumption by 2031. This type of fuel will remain the main source of renewable energy in the shipping industry, but will only represent 1 percent of the growth in renewable energy consumption across the entire transportation sector.
Europe, where the FuelEU Maritime regulations are being implemented, will be responsible for four-fifths of this growth. The International Energy Agency predicts that marine biodiesel will play a key role as one of the short-term solutions for reducing greenhouse gas emissions in this region, while alternative fuels and energy efficiency improvement measures are also expanding.
FuelEU Maritime Framework and Its Requirements
The FuelEU Maritime regulations will come into effect at the beginning of 2025, requiring ships over 5,000 GT visiting EU ports to reduce the greenhouse gas emissions intensity of their fuel. The greenhouse gas intensity is measured "from well to wake" and includes emissions from the production and distribution of fuel as well as its combustion.
The required reduction by 2030 will be 6 percent and by 2035 will be 14.5 percent. These regulations will cover all energy used in maritime voyages within the EU and half of the energy used in international voyages to or from this bloc.
If the IMO framework is approved, the demand for marine biodiesel will increase significantly. In this case, the IEA predicts that marine biodiesel consumption will rise to over 12 billion liters per year (over 10.68 million tons) by 2031, which would account for 4 percent of total marine fuel demand. Voting on this framework, initially scheduled for 2025, is now planned for December.
The framework will cover nearly 97 percent of the global commercial fleet by weight and will set two target levels for reducing the greenhouse gas emissions intensity of ship fuels. According to IEA forecasts, most ships will be able to achieve the 8 percent target by blending lower-emission fuels or purchasing credits.
