IPTA

International Parcel Tankers Association

Biofuels – Information Paper
Background

Biofuel is a fuel made from a renewable biological source. The base material used in its
production could be a crop grown specifically for that purpose or it could come from agricultural,
municipal or domestic waste, such as used cooking oil.

Bioalcohol is alcohol obtained from biological sources such as sugar or corn, and it is frequently
used in the production of biofuels, particularly in the United States, Russia and Brazil. In the
United States the most common biofuel is “gasohol”, a mixture of gasoline and ethanol. The most
widespread gasohol blend at present is "E10", containing 10% ethanol and 90% gasoline, a
concentration that is generally safe for unmodified car engines. Since 1998, however, many
American cars have been equipped to enable them to run on “E85”, a mixture of 85% ethanol and
15% gasoline. The recent high oil prices, coupled with tax breaks, have made E85 a far cheaper
option and it seems safe to assume that it will continue to gain in popularity. (It should be noted
that outside the US the “E” denoting the percentage of ethanol is often replaced by “BA”, for “Bio-
alcohol”).

Biodiesel is a generic name for fuels obtained by transesterification of a vegetable oil or animal
fat. The transesterification process involves a reaction of the oil or fat with an alcohol such as
methanol or ethanol in the presence of a catalyst. The process leaves behind two products: methyl
esters (the biodiesel) and glycerin, which is generally sold for use in soaps and other products.

Biodiesel has very similar combustion properties to fossil diesel, and can be used pure, but it is
often blended with ordinary diesel, the prefix “B” or “BD” usually denoting the proportion of
biodiesel to mineral diesel. A common blend in Europe is “B5”, or 95% mineral diesel and 5%
biodiesel, since this ratio of biodiesel is accepted under the EN590 diesel standard. In some
countries, such as France, all diesel sold routinely contains this 95/5 mix. The European Biodiesel
Board (EBB) is campaigning to have the EN590 standard amended to allow up to 10% biodiesel,
an initiative that the European Commission apparently looks upon favourably in view of its member
States’ undertaking to have 5.75 of all energy used in transportation coming from biofuels by 2010
as part of the strategy to meet Kyoto commitments.

While gasohol is currently the favoured biofuel in the United States, there is a growing market for
biodiesel produced from homegrown soyabean oil; and imports of biodiesel are also expected
grow, particularly from Latin America. In Europe, biodiesel accounts for around 80 percent of the
biofuels used for transportation. Rapeseed is the most common base oil, with sunflower oil more
popular in southern regions, and production capacity has already increased by an estimated 35 %
since 2002, reaching close to 2.2 million tons a year.

Malaysia, Indonesia and Latin America have all identified the possibilities of biodiesel production
from vegetable oils, and we can expect to see significant increases in shipments of both the crude
oils and downstream fatty acid methyl esters (FAME), with biodiesel plants being developed
recently in European countries such as the UK and the Netherlands as well as in Malaysia,
Indonesia and Singapore.
Shipping of Biofuels

Current Situation

Neither “Biofuel” nor “Biodiesel” have been evaluated for carriage by GESAMP and in our opinion
are unlikely to be accepted by the IMO as generic terms in the IBC Code, since both terms could
encompass a variety of products. As such this is not a valid cargo name if shipping under
MARPOL Annex II.

If a cargo is offered as “biodiesel” it will probably be a fatty acid methyl ester, but owners should
always establish exactly what the cargo offered is composed of and check that it is not in fact a
biodiesel blend, mixed with mineral oil.

Three fatty acid methyl esters have already been evaluated for carriage under the current
MARPOL Annex II:

• Palm oil fatty acid methyl ester

• Coconut oil fatty acid methyl ester
• Rapeseed oil fatty acid methyl ester

The first 2 are in the IBC Code and the third is in List 1 of the MEPC.2/Circ. All are Category D
and Chapter 18.

A tripartite agreement has been concluded in respect of Soyabean oil fatty acid methyl ester
between the United States, the UK and Singapore, with a number of other states, including
Germany and the Netherlands, having agreed to become party to it. Carriage requirements under
this agreement are the same as for the products listed above. For any other fatty acid methyl ester
to be shipped at present, a new tripartite agreement would have to be concluded.

With biofuel blends the situation is a little more difficult, since there has been some confusion
over whether these products should be shipped under Annex I on account of the amount of diesel
or gasoline in the blend, or Annex II because of the presence of alcohol or methyl esters.

It was agreed at last October’s ESPH group meeting that proposals should be submitted to the
MEPC for the carriage of biofuels to become a new work programme item. It will be the 55th
session of the MEPC, in October this year, before the issue will be discussed however, which
leaves the industry rather in limbo in the interim.

A number of Administrations sought an interim agreement at the BLG Sub-Committee in April this
year that until such time as the MEPC has had a chance to discuss the issue in depth any blend
containing 85% or more mineral diesel oil or gasoline should be carried as an Annex I product.
The Sub-Committee agreed that the proposed guidance would facilitate the shipment of these
products in a safe and environmentally friendly manner and encouraged Member States to follow a
similar approach. It is hoped that this solution should cover most, if not all of the blends likely to be
shipped in the immediate future. In the meantime Administrations have been asked to submit
formal proposals as to the carriage of these products for the consideration of the Marine
Environment Protection Committee. To this end IPTA has, together with the United Kingdom and
Sweden, co-sponsored a submission to MEPC 55.

Biofuels and Acceptable Prior Cargo Lists

“Biofuel” and “biodiesel” do not appear on the FOSFA Acceptable List, the EU Acceptable List, or
the NIOP Acceptable Lists for similar reasons to those expressed above, in other words the
interpretation of such terms can be far too broad.
Fatty acid methyl esters do appear on the FOSFA and EU lists, albeit not under the name of the
base oils, but under generic scientific names:

Methyl laurate (methyl dodecanoate)

Methyl palmitate (methyl hexadecanoate)
Methyl stearate (methyl octadecanoate)
Methyl oleate (methyl octadecenoate)

The NIOP Acceptable List 2, (acceptable prior cargoes for edible oils which will undergo further
processing), lists fatty acid methyl esters, with the above scientific names as examples, but also
specifies Coconut oil FAME, Palm oil FAME and Palm kernel oil FAME

Petroleum oils such as diesel and gasoline do not appear on the lists, and blends would therefore
not be seen as acceptable prior cargoes.

Carriage of Fatty Acid Methyl Esters under the Revised MARPOL Annex II

Palm oil FAME, Coconut oil FAME and Rapeseed oil FAME were all on the list of products with
missing data, and so they do not appear in the IBC Code as adopted in 2004. Data has since
been submitted on all three products, however, and they will appear in List 1 of the 2006 edition of
the MEPC.2/Circ. as Category Y and Ship Type 2. Since they are not “unmodified” oils, however,
they will not have the footnote (k) allowing them to be shipped in double double Type 3 vessels
under the exemption clause in Regulation 4.1.3.

In the meantime the GESAMP/EHS working group recently considered data provided under the
generic term “Fatty acid methyl esters”. They have assigned a single hazard profile under this
generic name and recommend that in the future any methyl ester derived from vegetable oil(s)
which is not a current entry in the IBC Code could be considered as a synonym of FAME. It is to
be hoped that the ESPH Group will be able to accept this recommendation, since it would simplify
matters from the point of view of the shipping of these substances. If this generic term is accepted
it will appear in List 1 of the MEPC.2/Circ., together with the three individual products that have
already been considered.