An Interview with Renewable Energy Group Robert Wolf

Biofuels are a straightforward solution for shipping companies to reduce their emissions immediately, without waiting for new technologies or equipment. The Global Centre for Maritime Decarbonisation notes that a blend of 30 percent biofuel with 70 percent marine gas oil can reduce carbon emissions by about 20 percent. Many major ports now offer formulations suitable for marine diesel engines, and the demand for these biofuels is climbing among ship operators and charterers eager to cut emissions instantly.

For deeper insights, TME spoke with Robert Wolf, Senior Manager Strategic Initiatives at Chevron's Renewable Energy Group, a top biofuel bunkers producer and distributor. In 2022, Chevron Corporation made a significant stride in bolstering its renewable energy portfolio by acquiring Renewable Energy Group (REG), a move that underlined the oil giant's commitment to a lower carbon future. REG, a leading biofuels producer, had established a robust footprint in the industry with its biodiesel and renewable diesel production capabilities. This acquisition allowed Chevron to not only expand its production of renewable fuels but also to integrate REG's substantial expertise and operational facilities into its energy transition strategy. The $3.15 billion deal signified a substantial shift in the energy landscape, as Chevron aimed to increase its renewable fuels production to 100,000 barrels per day by 2030. This strategic move was a clear indication of the growing importance of biofuels in the global energy mix and the industry's pivot towards sustainability and reduced carbon emissions. With this acquisition, Chevron positioned itself to be a formidable player in the renewable energy sector, anticipating the increasing demand for cleaner fuels in response to global climate change initiatives.

Assessing the maritime industry's current biofuel adoption, Wolf believes that the phase of trialing biofuels for technology's sake is over. The focus now is on pricing and shipowners' willingness to commit. Operational costs weigh heavily on shipowners, and decisions are often driven by customer demands, regulatory compliance, or internal carbon reduction goals. However, the cost remains a central concern, with few willing to pay a premium for 100 percent biofuel blends.

The market generally sees usage of B20 to B50 blends, influenced by various incentive structures. For instance, Dutch incentives have led to the prevalence of B30 and B50 blends, whereas B24 is common in Singapore.

Renewable Energy Group operates 11 biofuel production sites, primarily located in the Midwest: 10 are biodiesel facilities, and one produces renewable diesel. The U.S. anticipates significant growth in renewable diesel production soon, mirroring recent European investments also targeting sustainable aviation fuel (SAF), which requires stricter quality standards.

Looking forward, a major challenge is efficiently distributing the global supply of biofuel feedstocks, balancing energy production and environmental impact. As a renewable fuel producer, Renewable Energy Group is advocating for government policies that recognize the unique use of each feedstock molecule, ensuring equitable distribution among various low-carbon fuel solutions that the world urgently needs.

Read the full interview here