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Argus Introduces New Pricing for European Bio-LNG Bunkering

The global energy and commodity price reporting agency, Argus, has taken a significant step forward in promoting sustainable practices within the maritime industry by launching a set of prices specifically for liquefied natural gas (LNG) produced from waste feedstock. This renewable fuel is expected to play a crucial role in decarbonizing shipping operations. The introduction of these new bio-LNG prices aims to provide enhanced market transparency, benefitting both ship owners and stakeholders within the maritime sector.

Beginning this year, the FuelEU Maritime regulation effectively mandates that ships navigating in European Union waters must progressively cut their greenhouse gas (GHG) emissions. The regulation requires an initial reduction of 2% starting in 2025, steadily increasing to an ambitious 80% reduction by the year 2050. This transition presents a promising opportunity for the adoption of bio-LNG, which offers significant GHG savings when compared to traditional fossil LNG and other low-GHG alternatives.

The EU regulation also allows operators the flexibility to manage their fleets through a mass balance approach. This means they can link renewable gas Guarantees of Origin to a specific volume of bio-LNG, or even blend bio-LNG with fossil LNG, enhancing the viability and appeal of this alternative fuel.

Looking ahead, demand for bio-LNG is anticipated to increase steadily as the maritime industry gears up for the International Maritime Organization's global GHG reduction target, aiming for a 30% decrease by 2030, ultimately culminating in net zero emissions by 2050. Argus' new pricing set reflects a combination of three principal components: the Dutch Title Transfer Facility (TTF) natural gas front-month price, the LNG bunker premium linked to the TTF, and the price of Dutch waste-based biomethane. A standardized regulated liquefaction fee for bio-LNG is also included to ensure the proper allocation of biomethane certificates.

Bio-LNG is gaining traction not only within the shipping industry but also in the long-haul trucking market, where it serves as a viable replacement for diesel fuel. With Argus establishing a clearer pricing structure, counterparties can now better ascertain the bio-LNG bunker premium over existing TTF contracts and utilize the pricing data for contract analysis and development.

Adrian Binks, Chairman and CEO of Argus Media, emphasized the importance of this new pricing model, stating, "As the maritime sector explores alternatives to fossil fuels, price transparency and market intelligence become essential tools for participants looking to evaluate various pathways. Our new assessments were developed with ample input from the market, ensuring relevance and accuracy."

Argus commits to updating and publishing these bio-LNG delivered-on-board prices on a weekly basis across its platforms, Argus Biofuels and Argus LNG Daily. The prices will be available in both €/MWh and $/mn Btu formats, further enhancing accessibility for various market participants.

As the maritime shipping industry faces increasing pressure to reduce its environmental impact, the introduction of bio-LNG prices by Argus represents a crucial step towards a more sustainable and transparent operational framework. With ongoing investments in renewable fuel technologies and innovations, the future of maritime energy seems increasingly promising.

About Argus Media

Argus is a leading independent provider of market intelligence within the global energy and commodity markets. Established in 1970 and headquartered in London, Argus offers vital price assessments, news, analytics, and consultancy services, with a dedicated workforce of over 1,400 employees across 30 offices worldwide. Recognized for its reliability and depth of insight, Argus data is utilized by companies, trading firms, and governments to drive decision-making and strategic planning. The commitment to providing robust and independent market information makes Argus a cornerstone in navigating the complexities of the evolving energy landscape.