SGS INSPIRE Newsletter July 2024

In June, the SGS Worldwide Fuel Survey team launched the . The Survey will collect 700 gasoline and 440 diesel samples from 89 countries and territories worldwide. Samples will undergo a detailed analysis in SGS Germany laboratories and produce datasets to compare conventional fuel versus advanced fuels such as HVO, GTL, and e-fuels, available at petrol stations. Please contact us at sgs-inspire@sgs.com to participate in the survey or buy the results from selected countries and/or specific analytical parameters. The results will be available in October 2024.

SGS INSPIRE published an overview of the global use of fuel markers to fight fuel fraud. prevent fuel fraud and theft in Europe, and increasingly globally. Fuel markers are part of many governments' existing programs or plans to prevent fuel fraud and theft in Africa, Asia-Pacific and Latin America. SGS provides Fuel Integrity Programs to implement the use of fuel markers.

Also in June, SGS INSPIRE published the global map of Adblue/.

In July, SGS INSPIRE released the of its Energy Talks podcast on ‘The promise of marine oil phaseout in waterborne transport: which challenges ahead?’ This episode featured Professor Andrei Belyi, CEO of consulting energy firm Balesene and Adjunct Professor in Law and Policy at the University of Eastern Finland. Professor Belyi explained that very low sulfur fuels, namely cryogenic fuels like hydrogen or natural gas, are still expensive. He further said that the use of liquefied biomethane in the shipping industry will increase, primarily driven by the EU Fuel Maritime legislation in Europe.

The of SGS INSPIRE Energy Talks podcast on ‘Road Transport decarbonization in LATAM: the case of Brazil’ was also released in July. It is an interview with Daniel Amaral, the Director of Economic and Regulatory Affairs at ABIOVE, the Brazilian Association of Vegetable Oil Industries. He emphasized that transport decarbonization policies in Latin America should leverage biofuels to substitute fossil fuels, which can create growth for the countries involved. In addition, Amaral regretted that soybean oil and palm oil are being excluded by regulation from European and American markets and called for a global vision for these fuels.

Global report on e-fuels

Global maps on diesel and gasoline sulfur limit

SGS INSPIRE continues to provide a comprehensive overview of fuel standards all over the world with published in May and June 2024. They concerned 29 different countries, including Europe: Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Luxembourg, Lithuania, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden; Latin America: Brazil, Bolivia and Chile; Africa: Burundi, Kenya, Rwanda, Tanzania and Uganda; and Canada. Moreover, in May 2024 we added the new ISO 8217:2024, 17:2024, Products from petroleum, synthetic and renewable sources — Fuels (class F) — Specifications of marine fuels (seventh edition). This voluntary standard includes 21 marine fuels, incorporating the following fuels with an agreed FAME content:

At the end of May 2024, Serbia's government signed a framework agreement with for the construction of a plant processing oil and oil derivatives in Smederevo.

In May 2024, the was finally adopted by the Council of the EU, followed by the official publication of the regulation on June 6, 2024. The updated standards set new targets for 2030 (45%), 2035 (65%) and 2040 (90%).

In May 2024, the EC approved a EUR 1.4 billion (USD 1.51 billion) under the 'Hy2Move' IPCEI to support hydrogen technology in mobility and transport. This complements previous IPCEIs: 'Hy2Tech' (end-user technologies), 'Hy2Use' (industrial applications), and 'Hy2Infra' (infrastructure).

Also in May, EU countries that the EU strengthens anti-fraud investigations into imported biofuels and reinforces the governance systems. The request emphasized that biofuel producers who deny inspection by Member States' authorities will lose the certification of the renewable source of their biofuels.

In May, the for fuel producers until June 30, 2024. However, restrictions remain in place from July 1 to August 31.

The government of Uzbekistan announced it was planning to . The Ministry of Ecology, Environmental Protection, and Climate Change has developed a draft document according to which the commissioning of new RON 80 production capacity will be banned.

In June 2024, the final version of the EU was adopted. The exact methodology for assessing emissions for low-carbon fuels will be developed through a Delegated Act and presented by the end of 2024.

A consortium of six companies led by Airbus embarked on a study for establishing . The study aims to develop the Spanish hydrogen aviation ecosystem in Spain, addressing not only hydrogen supply and infrastructure issues, but also the specific needs of airport ground operations.

On June 12, 2024, the EC announced the introduction of on battery electric vehicles (BEVs) imported from China starting July 4, 2024. This decision followed an anti-subsidy investigation initiated in October last year, to address concerns that the Chinese EVs industry benefits from state aid, leading to unfair competition. The EU and China agreed to restart tariff discussions.

In June 2024, the use of B30 biodiesel, HVO100 and Superethanol (E85) to be offered at the pump. HVO 100 and B30 fuels can be sold for all types of engines, not only for captive fleet as it was before the new Order.

Romania's took the final investment decision to convert its Petrobrazi refinery to produce SAF and HVO. The facility will cost EUR 560 million and is expected to produce 250,000 tonnes of SAF and HVO annually.

In June, SGS INSPIRE published the , describing the policy driving renewable hydrogen projects, the hydrogen market and the projection for Europe.

SGS INSPIRE published the chapter on on ammonia as an alternative fuel – policy and market updates, reflecting the latest development of “Fit-for-55" regulations related to the maritime transport.

On June 20, 2024, KazMunayGas (KMG), LanzaJet and Mitsui met to discuss the possibility of starting a in Kazakhstan.

The was published in June, reporting about the quality specifications, market information and actual quality of gasoline in Kyrgyzstan.

In June 2024, an agreement was signed between the municipality of the Nenets Autonomous District (NAD) of Russia and Zarubezhneft for the .

The was published in June, followed by the , with updates on advanced biofuels production capacities.

In the UK, the was announced following a second consultation. The mandate will be set at least 2% of the total jet fuel supplied from January 1, 2025, increasing to 10% in 2030.

In July 2024, the Spanish government published the , which develops the mechanism for promoting biofuels and other renewable fuels for transport purposes. Among several improvements, the order allows SAF and maritime fuels to be counted towards the renewable energy targets from 2024, while biogas, biomethane, hydrogen and RFNBO to be counted from 2025.

Re-elected European Commission (EC) President Ursula von der Leyen has outlined the future of internal combustion engines (ICEs) in her political guidelines for the . The guidelines suggest that the CO2 emission regulations would be updated to introduce flexibility to the ICE ban and allow for a more significant role for e-fuels. Earlier this month, the European People's Party, the largest political group in the new European Parliament, issued its for 2024-2029, proposing a revision of the ban on ICEs in the adopted CO2 emission standards for cars and vans regulation.

Gazprom Neft and Ecovey are developing certification, standardization and introduction into .

In July, we reported about the dedicated to the production of green hydrogen being constructed in Yuzhno-Sakhalinsk on the island of Sakhalin. The first hydrogen generation is scheduled for July 13, 2024.

Also in the Russian Federation, for extra cold conditions in October 2024.

Overview of diesel quality in the Netherlands

Overview of gasoline quality in Spain

Overview of bio-based gasoline in Spain

Overview of diesel quality in Spain

Overview of diesel in Kyrgyzstan

Overview of vehicles in Kyrgyzstan

Overview of diesel in Uzbekistan

On May 14, 2024, the U.S. administration announced significant . This decision was driven by concerns that an influx of subsidized Chinese vehicles could flood the U.S. market.

On May 25, 2024, was introduced in the state of Michigan to accelerate biodiesel production and increase its availability within the state by offering tax incentives for fuel producers and retailers.

On June 7, 2024, the U.S. Department of Transportation's National Highway Traffic Safety Administration (NHTSA) issued for model years 2027-2031.

Environment and Climate Change Canada (ECCC) presented concerning the use of used cooking oil (UCO) as feedstock on June 11, 2024. The update addresses significant concerns and investigations regarding recent fraud in the UCO industry.

The Michigan legislature passed legislation on June 27, 2024, providing a (gasoline blended with 15% ethanol). The Michigan government aims to encourage fuel station owners to install more fuel pumps offering E15 gasoline.

American Airlines (AA) announced on July 2, 2024, that it had entered into a conditional purchase agreement with the aviation startup ZeroAvia to acquire intended to power aircraft on its regional routes.

In July 2024, the U.S. Department of Energy (DOE) announced a substantial USD 1.7 billion investment, part of the Inflation Reduction Act, to transform 11 automotive assembly plants across eight U.S. states into .

In 2023, from 17.9 million barrels in 2022 to 18.25 million barrels daily. This recovery is attributed to a reduction in the number of idle refineries, boosting overall refining capacity. Reduced domestic demand, combined with consistently higher supply levels, has positioned the U.S. as a significant , with Mexico receiving the largest share, accounting for 11.5% of all U.S. gasoline exports.

The SGS INSPIRE report showed that has consistently been the dominant source of RINs, though its share has steadily declined, from 95% in 2010 to approximately 60% in 2024. The report also indicates that have collapsed by approximately 52%, dropping from around USD 1.55 per RIN in 2021 to about USD 0.75 per RIN in 2024. This drop was primarily due to an oversupply of renewable diesel, driven by favorable conditions under the California Low Carbon Fuel Standard.

SGS INSPIRE Market Analyst for North America, Jorge Sierra, will be speaking at the E-fuel Summit in Conroe, Texas, US on 26-27 August 2024

“The promising panorama for renewable diesel in the U.S.” is the title of the SGS INSPIRE Webinar with expert George Hoekstra that will be held on 17 September 2024

Overview of the HVO/renewable diesel market in U.S.

Overview of gasoline quality in Canada

Overview of biobased gasoline in California

Overview of hydrogen as transportation fuel in U.S.

In July 2024, Brazil's National Agency for Petroleum, Natural Gas and Biofuels authorized Petrobras to commercialize with biodiesel. Producers do not foresee changes in fuels. The blend from the bunker and biodiesel fuels will be prepared at the terminal following the current specifications for each one.

Argentina's percentage of biodiesel blending in diesel increased to its highest level since 2019. For this part, the in gasoline has increased to the highest level since 2017. This is despite Argentina's drop in diesel and gasoline demand due to adverse economic conditions.

2024 diesel imports to Brazil from Russia continued to set new records and Russia replaced the U.S. as the country's . The changes in the origin of diesel imports associated with the modifications in international trade flow during the Russia-Ukraine conflict could impact Brazil´s diesel quality. In addition, Russia has positioned as the lead supplier of non-petrochemical naphtha to Brazil.

in 2024, reaching historical highs. All liquid fuels consumed in Guatemala are imported, mainly from the U.S. This growth trend in energy demand has also been reflected in an increase in jet fuel consumption, bunker fuel consumption, and aviation gasoline consumption in 2024.

and demand are forecast to increase in 2024. To meet domestic demand, , most of which come from North America, followed by Asia.

Overview of gasoline quality in Ecuador

Overview of biobased gasoline in Ecuador

Overview of diesel quality in Ecuador

Overview of gasoline quality in Uruguay

Overview of diesel quality in Uruguay

Overview of gasoline quality in Paraguay

In May 2024, the was successfully carried out in Singapore. The government and a local research institute supported the process, during which 1,340 tonnes of bio-methanol were refueled into a container vessel.

Early May, the Thai government from the market. In June 2024, the Thai government released a draft renewable and alternative energy action plan, considering the .

At the end of May 2024, the Japanese government, in cooperation with Japanese oil producers and car manufacturers, signed an agreement to in the country by 2030, which include e-fuels.

In June 2024, SGS INSPIRE updated the . The Chinese government is focusing more on developing NEVs in rural areas.

The Indian government published the in June 2024, which further reducing carbon emissions from the vehicles.

In June 2024, SGS INSPIRE updated the . The country is now upgrading the refinery. In July 2024, the Pakistan government is contemplating to amid the possibility of ethanol export reduction.

In July 2024, SGS INSPIRE established a new , showing that the country has improved its fuel quality since 2019.

At the same time, SGS INSPIRE updated the . The country's refinery was recently upgraded and is now able to produce ultra-low sulfur fuels. This report provides more information about the actual quality of Kuwait’s diesel.

The Philippines government plans to in October 2024 and allow all downstream oil industries to sell E20 gasoline voluntarily in the market.

Recently, the South Korean government implemented a 4% v/v mandate for biodiesel and permitted the use of non-petroleum feedstock. Further details can be found in the report, .

Hydrogen production and deployment prospects for the transportation sector in China

Renewable diesel (HVO) policy and market in China

Overview of diesel quality in Bahrain

Overview of vehicles in India

Overview of vehicles in Iran

Overview of diesel quality in Myanmar

Overview of vehicles in Myanmar

Overview of diesel quality in Taiwan, province of China

The Renewable Energy and Energy Efficiency Commission (CEREFE) of Algeria outlined the for renewable hydrogen production and development goals in Algeria, by 2050.

The Tunisian Department of Industry, Mines and Energy (MIME) published its . About 75% of the renewable hydrogen produced by 2050 will be exported to EU, whilst the remaining amount will be supplied in the country.

In May 2024, BP South Africa (bpSA) and Shell Downstream South Africa (SDSA) owned assets had been sold to the South African Central Energy Fund SOC Ltd (CEF). Out of six refineries, three are not functional, leading to the country’s increased reliance on imports of refined oil products.

The also highlighted the closure of refineries in South Africa. However, as petroleum demand is still expected to grow by 2040, there is optimism with new refineries in Nigeria (Dangote refinery), Ghana, Gabon and Angola. More investment to modernize and upgrade liquid fuel infrastructure, and the future of cleaner fuels in Africa were also discussed.

In July, SGS INSPIRE updated its taking into account the latest developments, namely the entering into force of the the gasoline specification NIS 116: 2017 - Standard for Premium Motor Spirit (PMS) from January 1, 2024.

Overview of diesel in Nigeria

Overview of gasoline in Zimbabwe

Overview of diesel in Zimbabwe

Overview of gasoline in Tunisia

Overview of diesel in Tunisia