From Residue to Resource (Bio-residue)

These crops could otherwise be used to feed people or livestock.  Waste or bi-products from agricultural, forestry, food-processing and other biological industries can be converted into marine fuels. This prevents competition with food production.

Present and expected regulations such as Fuel EU Maritime and IMO Net Zero Framework (NZF) financially incentivise the use of bio-residue because the surplus created can be sold to ship operators in deficit to avoid compliance penalties.

A proposed revision to the EU ETS is to introduce a technology neutral framework called SMAP (Sustainable Maritime Alternative Propulsion) to help close the cost gap between fossil and low-carbon fuels.

*AI-generated image produced by Adobe Firefly on 7 August 2026

Furthermore, the Renewable Energy Directive (RED III) encourages the production of biofuel created from residues.

These include:

• Used cooking oil (UCO)

• Animal fat- (where eligible)

• Palm Oil Mill Effluent (POME)

• Tall oil (a by-product of wood pulp from pine trees)

• Lignocellulosic residues (from non-food plant parts)

• Forestry residues

• Agricultural residues

• Certain industrial residues

As demand grows, it is likely that suppliers will increasingly look beyond conventional feedstocks towards more complex bio-residue.

Potential unintended consequences

As RED III applies to all industries, there will be competition from the airline and heavy transport industries in the use of bio-residues, and we suspect that the consequences of this high demand will create further risks in the maritime sector. These may include, but not limited to:

• Use of lower-quality residues

• Chemically variable feedstocks

• Blending of multiple residue streams

• Pressure on traceability systems

• Higher fraud risk (misclassification of the sustainability value in the proof of compliance documentation)

• Challenging fuel quality management

Ship operator concerns

For ship operators, this may translate into greater variability in:

• Oxidation stability

• Acidity

• Contamination

• Cold flow properties

• Storage stability

• Compatibility with conventional marine fuels

• Injector fouling and fuel pump wear

• Firefighting requirements

Click here to enlarge image *AI-generated image produced by Adobe Firefly on 7 August 2026

Potential impacts are:

• Inconsistent fuel composition between batches

• Higher risk of sediment formation and blockages in purifiers and filters

• Increased risk of microbial growth where residual contaminants or water are present

• Uncertainty over long-term engine performance

•  Disputes over sustainability documentation and the chain of custody

• Compatibility issues with seals, gaskets, coatings and certain alloy metals

Loss Prevention general guidance:

The below should help to mitigate some of the identified risks:

• Stringent tank cleaning requirements prior to use

• Consult fuel testing agencies for enhanced testing specific for biofuels, where standard fuel testing may not include parameters such as microbial growth, chemical contamination or other contaminants

• Require detailed fuel specifications and quality declarations

• Avoid blending with other fuels unless compatibility testing confirms suitability

• Use reliable suppliers

• Minimise storage duration

• Additional monitoring including temperature and water drainage

• Closely monitor purification, filtration, sludge production and fuel transfer system for abnormalities

• Consider enhanced monitoring of fuel pumps, injectors and cylinder condition

• Ensure transfer procedures, spill contingency plans, Shipboard Oil Pollution Emergency Plan (SOPEP) and crew training are all suitable for bio-residue

• Obtain and retain available documentation regarding fuel composition, and blend information as this will help with potential pollution clean-up actions for any properties that may disperse differently

• Ensure certification such as the widely used International Sustainability & Carbon Certification ISSC EU is in place for following reasons and more:

  • Proof that fuel is made from waste or residue as opposed to crops

  • To track throughout supply chain to prevent uncertified products

  • To document life cycle GHGs

  • To arrange 3^rd party compliance audits

• Report any spills promptly to the relevant authorities and closest coastguard or port State.

• NorthStandard members can use VPS fuel insights to check:

  • Suppliers with most ISO 8217 off specs at barge level

  • ISO Grade – categorised data

  • Ports with most off-spec fuels

  • Most common off-spec parameters

  • Typical tested wax appearance and disappearance temperatures (WAT & WDT)

  • GCMS warnings