Biofuels and LBG in shipping: benefits, risks, tech readiness, case studies, and 2025 rules—your practical guide to sustainable marine fuels.
Introduction
The shipping industry is steering through a once-in-a-century energy transition. Every voyage, every port call, every fuel decision now happens under the twin spotlights of climate compliance and commercial reality. Amid the alphabet soup of alternative fuels—LNG, methanol, ammonia, hydrogen—biofuels and liquefied biogas (LBG, also called bio-LNG) have emerged as pragmatic contenders. Why? Because they can often drop into existing fleets and fuel systems, leverage expanding bunkering networks, and deliver measurable well-to-wake (WtW) GHG reductions when produced and certified sustainably (DNV, 2024–2025; IMO, 2024).
But “pragmatic” isn’t the same as “simple.” Biofuels vary in feedstocks and quality; FAME and HVO behave differently in engines and tanks; LBG carries methane slip risks at the engine and supply-chain level; and certification plus mass-balance accounting are now essential in both the EU and global regimes. Meanwhile, FuelEU Maritime applies in full from 1 January 2025, pushing GHG-intensity down over time and changing what’s cost-effective to burn (European Commission; EMSA; DNV).
This guide cuts through the noise. We’ll explain why the topic matters, survey key technologies, tackle challenges with practical solutions, and ground it all in case studies you can learn from—before closing with FAQ, future outlook, and references.
Why This Topic Matters in Maritime Operations
The International Maritime Organization’s revised GHG strategy and supporting life-cycle guidelines have reshaped fuel choices. Beyond “tank-to-wake,” IMO now points the compass toward well-to-wake (WtW) accounting of greenhouse gases, with sustainability themes like land-use change and traceability rising in importance.
Biofuels—especially HVO (hydrotreated vegetable oil) and certain advanced FAME grades—offer near-term drop-in decarbonization for conventional diesel engines. LBG (bio-LNG) offers a drop-in path for LNG-capable ships using today’s cryogenic storage and bunkering systems, with the potential to materially cut WtW emissions—if methane slip is controlled and feedstocks are sustainably certified.
On the policy side, FuelEU Maritime ties vessel compliance to the GHG intensity of energy used, starting with a 2% reduction in 2025 and tightening thereafter; default methane-slip values for LNG engines and rules for demonstrating better-than-default performance are baked in.
The bottom line: biofuels and LBG are operationally deployable now, can help with CII/ETS/FuelEU targets, and are scaling across European bunkering hubs—with Asia catching up—yet they also bring feedstock, certification, methane, and cost challenges.
Key Developments, Innovations, or Technologies
The Biofuels Family: FAME and HVO (and friends)
FAME (Fatty Acid Methyl Esters) and HVO are the headline liquid biofuels for marine engines:
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HVO behaves most like marine diesel and generally needs minimal system change, though quality specs and seal compatibility should be checked.
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FAME is widely available but can present stability, cold-flow, and corrosivity concerns. Shipowners report more handling vigilance is needed (filters, water management, shorter storage).
Other “bio-” pathways (e.g., bio-methanol, bio-DME, bio-FT diesel) are in pilot/early use and covered in EMSA’s safe bunkering work and technical guides.
Certification & Mass Balance
To count under FuelEU, EU ETS, CII, or corporate net-zero programs, biofuels increasingly require recognized certification and chain-of-custody documentation (e.g., ISCC EU, REDcert EU, RSB). The mass-balance approach allows mixing certified and non-certified streams at depots while tracking the sustainability attributes to final customers.
EU’s Renewable Energy Directive (RED II/III) also defines which Annex IX feedstocks qualify as “advanced” (Part A) or “waste-based” (Part B), and the list has been updated through 2024–2025 guidance.
LBG / Bio-LNG: A Drop-In for LNG-Ready Fleets
LBG (liquefied biomethane) is methane derived from biogenic sources (e.g., manure, organic waste), liquefied like LNG. For LNG-capable engines and cryogenic bunkering networks, LBG drops in seamlessly—same molecules, same tanks, same pipes. That infrastructure advantage is a major reason LNG orders have risen and LBG volumes are starting to flow at European hubs.
Technical edge: engine makers are cutting methane slip—the Achilles’ heel of gas engines that undermines climate benefits. Wärtsilä’s NextDF upgrades claim up to ~50–65% slip reductions on certain platforms, and new 46TS-DF engines report slip <1.4% of fuel use across the load range.
Independent data still urges caution: real-world measurements found higher-than-assumed methane from some LNG ships (especially certain 4-stroke LPDF engines) and even fugitive methane during cargo/unloading operations—arguing for tight measurement, verification, and technology upgrades.
The Policy Backbone: IMO LCA + FuelEU Maritime
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IMO LCA Guidelines (MEPC.391(81)): set common rules for assessing life-cycle GHG intensity of marine fuels—including boundaries from feedstock to onboard use and sustainability themes (carbon stock changes, land use, etc.).
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FuelEU Maritime: applies from 1 Jan 2025, with GHG-intensity targets, default methane-slip factors (with pathways to prove better performance), and crediting for RFNBOs/biofuels that meet certification norms.
Challenges and Practical Solutions
1) Sustainability & Feedstocks (ILUC, Competition, Traceability)
The challenge. Not all biofuels are created equal. Using virgin crops can trigger indirect land-use change (ILUC) risks. Waste- and residue-based feedstocks are preferred but limited; EU Annex IX caps and targets reflect that scarcity.
What works.
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Prioritize Annex IX Part A (advanced) and certified waste-based Part B feedstocks.
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Require ISCC EU/RSB proof of sustainability with mass-balance chain of custody and auditable documentation from producer to bunker delivery note.
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Include supplier scorecards and third-party LCA verification in procurement.
2) Fuel Quality & Onboard Handling (FAME/HVO)
The challenge. FAME can degrade faster, absorb water, form microbes, and exhibit cold-flow issues. HVO is more stable but specs vary with feedstock and process; long-term tank compatibility and seal materials still need checking.
What works.
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Start with blends (e.g., B20–B30) and escalate to B100/HVO100 after trials and lab tests.
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Tighten fuel housekeeping: frequent draining, water monitoring, biocide programs, duplex filtration, shorter storage cycles.
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Align with EMSA bunkering guidance and risk-based safety assessments pending dedicated standards.
3) Methane Slip & LBG Credibility
The challenge. Methane slip (unburned methane) has a high short-term warming potential, which can erase the WtW advantages of LBG if unmanaged. Measurements show engine-type differences and operational dependences.
What works.
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Choose low-slip engine tech (e.g., ME-GI two-stroke or upgraded four-strokes with NextDF kits).
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Retrofit methane-reduction packages where feasible; optimize loads, tuning, and maintenance.
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Measure, report, verify: use drone/remote sensing or onboard systems to document better-than-default performance for FuelEU crediting.
4) Cost, Availability & Logistics
The challenge. Certified biofuels and LBG often command a premium; supply is uneven across ports; EU ETS allowances can still be cheaper than switching fuel in some cases.
What works.
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Portfolio approach: combine efficiency measures with targeted biofuel/LBG use on lanes with best availability and pricing.
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Long-term offtakes with ISCC-EU fuel suppliers; use mass-balance to unlock certified volumes even where physical segregation isn’t possible.
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Leverage blends strategically to meet FuelEU targets while managing OPEX.
5) Regulatory Navigation & Documentation
The challenge. Operators must reconcile IMO LCA, FuelEU defaults/exceptions, EU ETS, and company disclosures—each with its own proof-of-sustainability requirements.
What works.
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Map a documentation spine from feedstock to BDN; align with EU-approved schemes.
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Keep an auditable trail (PoS, LCA values, methane-slip evidence, allocation rules).
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Use class/consultancy checklists to pre-empt non-compliance.
Case Studies / Real-World Applications
1) Europe’s Bio-LNG Uptick: From Rotterdam to the Med
LNG bunkering volumes kept expanding through 2025—Rotterdam +7% (Q1 YoY), Singapore +18% (Jan–May), and Shanghai +60% (Jan–May)—with LBM/LBG gradually integrated as drop-in.
In Spain (Port of Algeciras), Axpo completed the country’s first ship-to-ship bio-LNG bunkering for a large container vessel in August 2025—over 4,000 m³ ISCC-certified bio-LNG delivered to CMA CGM FORT BOURBON—a milestone for scaling certified LBG in Southern Europe.
Barcelona also reported progress: growing LNG vessel calls (23% in 2024) and the first bio-LNG bunkering there in 2025, signaling Western Mediterranean readiness.
2) Fleet Decisions: Hedging with Dual-Fuel and Bio Pathways
Faced with fuel uncertainty, major carriers hedged with dual-fuel newbuilds able to run LNG today and switch to LBG/e-LNG later, while also exploring methanol and ammonia. Meanwhile, by 2030 Maersk expects 15–20% of fuel to be alternatives (biodiesel, green methanol, bio-methane), reflecting a diversified portfolio.
3) Biofuel Drop-In Trials & Guidance
Across North-West Europe and the UK, B20–B100 trials on HVO/FAME progressed under ISCC/RSB certification and EMSA’s safe bunkering guidance. Operators reported limited technical issues when transitions were planned and monitored, especially for HVO.
4) Technology Counterweights to Methane Slip
Engine OEMs are rolling out slip-reduction kits and next-gen combustion concepts: Wärtsilä NextDF (slip <1.4% of fuel use on 46TS-DF), ME-GI platforms with ~0.2–0.28 g/kWh slip guarantees, and operational tuning strategies—bringing LBG’s WtW case closer to robust.
Future Outlook & Trends
1) Regulation Will Keep Tightening—and Standardizing
FuelEU Maritime is live (2025) with a rising bar on GHG intensity; IMO life-cycle guidance will keep maturing. Expect more ports to request certified fuels and mass-balance documentation as standard bunkering paperwork.
2) Certification Moves Center Stage
The “claims economy” around green fuels will rely on ISCC/RSB/REDcert EU certificates, mass-balance ledgers, and audits. Expect more port authorities and PSCs to align local incentives or exemptions with proof-of-sustainability.
3) Tech Will Narrow the Methane Gap
Slip-mitigation is advancing through combustion design, aftertreatment, and controls. Independent research will keep pressure on measurement and verification—think drones, stack sensors, and fuel-specific MRV—so best-in-class LNG/LBG ships can prove their performance.
4) Markets: From “Pilots” to “Programs”
Biofuel and LBG suppliers are scaling. KPI OceanConnect targeted 120 ports for marine biofuels ahead of 2025 rules; Titan highlights growing LBG demand around North-West Europe; and LNG bunkering growth in Shanghai, Singapore, Rotterdam signals a platform for bio-LNG expansion.
5) Economics Will Stay a Balancing Act
EU ETS pricing vs. biofuel/LBG premiums remains a delicate calculus. Blends, targeted routes, and efficiency first strategies (4–16% fuel savings possible by 2030) will help square the ledger while the advanced feedstock market scales.
FAQ (Concise Q&A)
Q1. What’s the difference between FAME and HVO on ships?
FAME can be more hygroscopic and chemically reactive, demanding tighter storage/filtration; HVO is more diesel-like and stable. Both can be drop-in with due diligence.
Q2. Does LBG really cut emissions?
Yes—biogenic carbon improves WtW metrics, if methane slip is low and upstream leaks are managed.
Q3. What documentation do I need to claim benefits?
An ISCC EU (or equivalent) Proof of Sustainability, a mass-balance record, LCA/WtW values, and methane-slip evidence for FuelEU crediting.
Q4. Where are biofuels and LBG available today?
Coverage is strongest in Europe (Rotterdam, Antwerp, Algeciras, Barcelona) with Singapore and China growing.
Q5. How do biofuels interact with CII and EU ETS?
Certified biofuels can improve CII and reduce ETS exposure, but cost parity isn’t universal; route-by-route optimization is key.
Q6. Which is “best”: biofuels, LBG, or e-fuels?
There’s no single winner. For existing diesel fleets, HVO/FAME offer rapid reductions. For LNG-ready fleets, LBG leverages existing assets. E-fuels will scale later.
Q7. Are there safety differences in bunkering biofuels?
HVO/FAME resemble diesel hazards; LBG follows LNG protocols (cryogenic, flammability) with extra focus on methane detection.
Conclusion
Are biofuels and LBG sustainable waves—or risky currents? The answer is both, depending on how you source, certify, store, burn, and verify them.
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Why they matter: They’re here now, compatible with existing fleets, and aligned with IMO and FuelEU Maritime rules.
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Where they shine: HVO offers fast drop-in reductions; FAME works with careful housekeeping; LBG unlocks value for LNG-capable ships.
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Where they can fail: Unsustainable feedstocks, poor fuel quality, uncontrolled methane slip, and weak documentation.
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What to do next: Build a portfolio—efficiency first, then targeted biofuel/LBG deployments at the right ports, underpinned by certification, mass-balance, and methane performance.
Takeaway: Treat biofuels and LBG as disciplined tools, not silver bullets. With sustainable sourcing, robust certification, tight operations, and transparent MRV, they can carry your fleet through today’s compliance surf—while you prepare for tomorrow’s e-fuels.
References (selected)
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International Maritime Organization. (2024). MEPC.391(81) Life-cycle GHG intensity guidelines for marine fuels.
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IMO. (2023–2025). Lifecycle GHG/carbon-intensity guidelines page.
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ClassNK. (2024). IMO guidelines on life-cycle GHG intensity—overview.
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European Commission. (2025). FuelEU Maritime overview.
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EMSA. (2025). FuelEU Maritime: full application from 1 January 2025.
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DNV. (2025). FuelEU Maritime: regulation insights.
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ECSA. (2023). Methane slip default values & FuelEU.
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EMSA. (2024). Guidance for Safe Bunkering of Biofuels.
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DNV. (2025). Maximizing the potential of biofuels in shipping.
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LR. (2024–2025). Biofuel (FAME/HVO) insights and readiness.
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Lighthouse. (2025). Biofuels in Shipping—white paper.
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Lloyd’s List. (2025). Biofuels gaining ground but price/scarcity risk.
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ISCC System. (2025). ISCC EU Mass Balance Guidance.
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Global Maritime Forum