ZERO44, a provider of greenhouse gas emissions compliance software in the maritime industry, has launched a free and interactive biofuel cost calculation tool on its website. This tool helps ship operators examine the economic impacts of replacing fossil fuels with biofuels while considering carbon regulations.
Economic Analysis of Biofuels
According to ZERO44's information, fuel prices are still typically compared one-to-one; for example, the cost of one ton of biofuel compared to one ton of fossil fuel. If this comparison stops here, biofuels usually lose this competition due to their higher price.
Friedrich Hesse, CEO of ZERO44, says: "Too often, the discussion about alternative fuels is limited to the price per ton. But this picture is not complete. When we consider regulatory costs and the value of compliance, these facts can turn into a net advantage. We created this tool to showcase these mechanics."
Benefits of Fuel Replacement
Based on the default assumptions of the tool, replacing one ton of VLSFO with biodiesel on intra-EU voyages in 2026 results in a net profit of about 163 euros. This outcome depends on various factors: fossil fuel and biodiesel prices, the geographical scope of the voyage, and EU permit prices. The tool analyzes all these elements presented together, helping operators have a complete picture of the situation.
Regulatory costs are rising: EUA prices are expected to increase, and FuelEU targets will be set more stringently every five years. Additionally, the IMO's carbon-neutral framework could add a global carbon price starting in 2029 if approved in December. This tool shows users how these impacts combine over the years.
This tool is designed solely for educational purposes and is not part of ZERO44's product. The company emphasizes that real fuel decisions are much more complex. Friedrich Hesse states: "Fleets operate based on a diverse mix of fuels, and some ships are better candidates for alternative fuels depending on engine compatibility and trading patterns. Moreover, fuel prices, permits, and surpluses are constantly changing."
ZERO44's compliance software manages these complexities and provides much more comprehensive analyses for its fleet, including forecasting and scenario planning in the context of the EU ETS, FuelEU Maritime, UK ETS, and CII metrics.
