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Europe’s largest biorefinery is located in the heart of the Port of Rotterdam. Alco Energy Rotterdam converts corn into bioethanol fuel in a production process that generates zero waste. The CO₂ released during the process is transported to greenhouses in Westland and the remaining corn pulp is suitable for use as animal feed. ‘We aim to become the most sustainable biorefinery in Europe. Perhaps even in the world. Logistically, Rotterdam is the ideal place for us.’

Ethanol is produced during the fermentation and distillation of certain crops. Alco Energy – a relaunch of Abengoa – uses animal feed quality corn for this. The sugars in the corn are converted into almost pure alcohol, which can be mixed easily with petrol. European legislation specifies that in order to reduce greenhouse gas emissions from traffic, in 2020 at least ten percent of fuel for the transport sector must originate from renewable energy sources. In line with this, Dutch petrol stations have been obliged since last October to mix some ten percent of bioethanol in Euro95 petrol. ‘If you fill up with Euro95, you’ll see E10 mentioned at the petrol pump. This refers to the ten percent added bioethanol,’ stated Robine Koning, Alco Energy Rotterdam Plant Manager. Greenhouse gas emissions from ethanol are considerably lower than petrol. In Alco’s case, emissions are almost 95 percent lower.

Every thousand kilos of corn produces 330 kilos of ethanol. Almost the same amount of mass remains after the corn sugars have been converted into alcohol. The high protein level of this DDGS (Distiller’s Dried Grain with Solubles) makes it a very much sought-after product in the animal feed industry. ‘Research shows that DDGS reduces methane production in livestock,’ explained Koning. ‘And as our corn only comes from European countries and has a GMP++ certificate for animal feed safety, it is guaranteed to be GMO-free. It can partially replace imported soybean meal in animal feed.’

Alco Energy transports the CO₂ released during fermentation in the production process via underground pipelines to the horticulture industry in Westland, so that the greenhouses there do not need to generate CO₂ from fossil fuels. ‘This summer we will start using a second compressor so that we can transport even more CO₂ to the horticulturalists,’ stated Rob Vierhout, Alco Energy’s Public Affairs Advisor. ‘This is in line with our ambition to become Europe’s most sustainable, efficient and modern biorefinery. We are currently number two, I think, just losing out to a Swedish company. We are also investigating the possibilities of reducing CO₂ emissions by reducing the use of natural gas and by using other raw materials than corn, such as residual waste.’

Logistically, Rotterdam is the ideal location for the biorefinery. Corn is unloaded from sea-going vessels that can berth at the plant’s quay. And the inland shipping, rail and road transport connections are also good. ‘Annually, we supply 550 million litres to the petrol market. We transport this ethanol by train or vessel to oil companies, mainly in Northwest Europe,’ stated Koning. ‘This combination of transport flows makes us incredibly flexible.’

Reported by Port of Rotterdam (19 February 2020)

U.S. sanctions on Russian Rosneft’s trading arm will disrupt a slice of global crude flows and may prompt refineries in Europe, India and the United States to shift purchases to other crude suppliers, traders said.

The United States on Tuesday redoubled efforts to oust Venezuelan President Nicolas Maduro by barring U.S. dealings with Rosneft Trading S.A., a subsidiary of Russia’s state oil major Rosneft, which Washington said provides him a financial lifeline. Russia has called the sanctions illegal and said it plans to consider options in reaction.

The ban will likely hit some U.S. direct purchases of Urals, typically a medium sour blend, from Rosneft Trading and could make it more difficult for refiners in Asia and Europe to buy from the firm. Washington advised non-U.S. firms to seek guidance should they be unable to wind down dealings with the trading firm within 90 days.

European refiners could look to source replacement crudes from West Africa, Brazil and the U.S. Gulf Coast, if Urals become expensive, traders said. Urals is the most common export grade from Russia and a benchmark for medium sour crudes in Europe. It could create new demand or support prices for alternatives such as Colombia’s Vasconia and Castilla and Basrah heavy, they said.

Phillips 66 has been one of the biggest buyers of Urals on the Gulf Coast from suppliers including Rosneft Oil, according to U.S. Customs data on Refinitiv Eikon. Companies that have imported Urals from Rosneft Trading in recent years included PBF Energy and Swiss trader Trafigura .

Phillips 66’s imports through the U.S. Gulf Coast and some Italian refiners in Trieste are likely to be affected, one market source said.

Phillips 66 and PBF Energy spokespeople declined to comment. A spokeswoman for Trafigura said it would comply with the sanctions.

U.S. crude flows to Europe are set to increase as demand from Asia has plummeted due to the coronavirus outbreak, sources said.

In India, refiner Reliance Industries said it was assessing the impact of the sanction. Nayara Energy, part-owned by Rosneft, said it complies with all relevant and applicable U.S. sanctions.

The sanctions do not target other Russian traders including Litasco, an arm of Lukoil. But past sanctions have tended to prompt some companies to do more than required. Traders on Wednesday said Rosneft’s oil sales, excluding the trading arm, were not affected.

Rosneft Trading acts as a counterparty on behalf of Rosneft in some global deals and plays a role in an informal oil trading alliance Rosneft has with Trafigura, traders said. It is unclear what impact the sanctions will have on that alliance.

Reporter: Devika Krishna Kumar from Reuters

Commodity trading major Vitol said it expected oil prices to recover later this year once the effect of the coronavirus epidemic wanes, Bloomberg reported, citing the company’s chief executive.

Before that, however, the oil market will suffer a 200-million-barrel negative impact on demand during the first quarter, Russell Hardy said, with loss of demand in China at 4 million bpd at the moment, on the back of travel bans and lower economic activity.

While this is undoubtedly negative for prices, Vitol’s CEO also said there is a positive effect to counter the impact of the coronavirus, and this is lower production in Libya and Venezuela, along with OPEC plans to deepen their production cuts.

“All of those factors are going to help re-balance the 200 million barrels, which will leave the market in a better position for the second half of the year,” Hardy told Bloomberg in an interview. “There’s an OPEC meeting to come in a couple of weeks time and the market’s anticipating some kind of supply response from OPEC.”

OPEC officials earlier this month recommended additional cuts of 600,000 bpd to prop up oil prices, but Russia has been reluctant to agree, asking for more time to consult on the recommendation.

This opposition is hardly surprising: Russia has consistently budgeted for lower oil prices than the actual ones since the 2014 price collapse, and as a result is much more resilient to price drops than Saudi Arabia. It has also signaled repeatedly it is making a compromise with its oil industry in supporting the cuts as they are.

The next meeting of OPEC and its partners in the cuts is scheduled for early March and if history is any indication, Moscow will agree to an extension or deepening of the cuts, but it may not stick to them.

Meanwhile, the EIA, the IEA, and OPEC itself have revised down their global oil demand outlooks, with the EIA the most pessimistic, expecting demand to take a hit of 378,000 bpd for this year. OPEC revised down its outlook by 230,000 bpd earlier this month, while the IEA’s downward revision was for 365,000 bpd.

Reporter: Irina Slav from Oilprice.com (21 February 2020)

JPMorgan Chase & Co, long a target of public scrutiny for its relationship with the fossil-fuel industry, is getting more serious about the impacts of the climate crisis.

The bank’s annual regulatory report on Tuesday added “climate change” as a risk factor, saying it could hurt operations and customers. Risks including prolonged droughts or flooding, increased frequency of wildfires, rising sea levels and altered rainfall could “prompt changes in regulations or consumer preferences, which in turn could have negative consequences for the business models of JPMorgan Chase’s clients,” the company wrote in the filing.

The added disclosure came a day after JPMorgan vowed to stop financing coal-fired power plants unless they’re using technology to capture and sequester carbon. The bank also won’t provide project financing for new oil and gas developments in the Arctic.

The climate crisis and its potential impact on society, markets and the global economy is gaining more attention from the business community. This month, Goldman Sachs Group Inc., Bank of America Corp. and Citigroup Inc. also added to their regulatory filings stronger warnings about the toll it could take on their businesses.

Environmental activists have been pressuring JPMorgan, the biggest U.S. bank, to divest from the fossil-fuel industry, and have called on shareholders to remove Lee Raymond, the longtime climate skeptic who previously ran Exxon Mobil Corp., from the lender’s board.

Chief Executive Officer Jamie Dimon, another target of environmentalists, has said climate change can be solved only through government policies.

“I’ve always thought it was a problem,” Dimon said at the bank’s investor day Tuesday. “We should acknowledge the problem and start working on it.”

Financial firms often include dozens of disclaimers about potential risks in their annual 10-K filings, but JPMorgan has typically focused on those more directly related to the economy, regulation and competition. Economists at the firm have been warning clients about the potential for climate change to threaten the global economy and even the human race.

Reporter: Michelle F. Davis by Bloomberg (26 February 2020)

In the wake of IMO 2020, the Chinese New Year and the coronavirus, the more than usual uncertainty has generated rough sailing throughout all sectors of shipping.

IMO 2020 seems to have vanished from the news but was the first topic covered Capitallink organised a webinar showcasing the “navigation” strategies of four listed companies- with participation by company ceos, moderated by Jefferies equity analyst Randy Giveans.

Panel participant Kim Ullman, the ceo of Concordia Maritime, noted “the industry said that they would fix it…and they have.” He said that price spreads between low sulphur and high sulphur were actually lower than many industry participants had expected – presently in the range of $150 – $175 per tonne, depending on geography.

On the cargo demand side, he added that there had been an uptick in oil cargoes moving “out to the East” to be refined in line with expectations of market participants.

Panelist Valentios “Eddie” Valentis, the top man at Pyxis Tankers, explained that, in 2019 Q4, movements of low sulphur fuel cargoes helped fuel the hires for MR tankers up to levels as high as $35k per day. He explained further that delays as supply organized bunker stocks brought about some delays- all sorted out now, which also contributed to the Q4 strength.

“Things are settling down,” he said, explaining that Pyxis, operating five smaller tankers, had not experienced any difficulties with arranging for low sulphur fuel supplies, in various ports.

Dry bulk webinar participant, Stamatis Tsantanis, the chairman/ ceo of capesize owner Seanergy Maritime, offered a similar view, noting that, for Seanergy vessels not equipped with scrubbers, “we have found that the supply of low sulphur fuel is abundant.”

The contraction of the price spreads have impacted the firms in different ways. Tsantanis described arrangements where his company’s scrubber fitted vessels had been entered into three – five year deals with major charterers. In these schemes, the charterers paid the capital costs, installation and offhires for scrubber retrofits; Tsantanis described a “profit sharing plan” where the repayment to the time charterer comes from fuel savings. The shipowner participates in the sharing if the spread widens.

Concordia Maritime’s Ullman acknowledged that his firm, where the vessels are consuming low sulphur fuel, had entered into forward hedges to protect against increases in the price differential, at the time that a decision was taken not to invest in scrubbers. He told the webinar listeners: “The prices today are lower than the hedge, but fleet enjoying lower MGO prices.”

Looking towards the future, beyond IMO2020, Panelist Marco Fiori, the ceo of Premuda, said “There are a lot of question marks…it’s very difficult to operate longer term in a capital intensive industry,” when there are such great uncertainties about future fuels suitability. The silver lining in all this is that fuel uncertainties “have not been very encouraging for ordering”.

Reporter: Barry Parker from Seatrade Maritime News (24 February 2020)