The International Bunker Industry Association (IBIA) has outlined how new European regulations are creating significant challenges for the bunkering industry in the Amsterdam-Rotterdam-Antwerp (ARA) region, with compliance costs and operational complexities driving volumes away from Rotterdam.

During a recent IBIA Europe webinar, industry representatives detailed the impact of the Renewable Energy Directive III (RED III), new mass flow meter (MFM) requirements, and ADN safety regulations on bunkering operations.

Sofia Fürstenberg, partner at Fürstenberg Maritime Advisory, explained that RED III regulates fuel suppliers through member states to meet renewable energy and greenhouse gas reduction targets. The directive requires a 14.5% greenhouse gas reduction by 2030 at a fuel portfolio level, with specific targets including a 5.5% share of advanced biofuels and renewable fuels of non-biological origin.

The Dutch implementation of RED III, known as the Fuel Transition Obligation, requires fuel suppliers to reduce CO2 equivalents in fuel portfolios by 2.9% on a year-by-year basis, increasing to 8.2% for shipping by 2030. However, the regulation's design has created market distortions, according to industry participants.

Tyler Baron, representing Minerva Bunkering, said compliance costs for RED III are estimated at $35-$45 per tonne, significantly higher than current trading prices of around $20-$25 per tonne. He observed that regulation is effectively taxing the point of distribution rather than the point of consumption, which is creating a distortion in the market.

Jan Christensen, senior director of global fuel purchasing at Hapag-Lloyd, explained that the company has already seen an additional premium of around $20 per tonne in Rotterdam. Hapag-Lloyd purchases approximately 5 million tonnes of fuel annually, with 1 million tonnes in the ARA region.

Industry estimates suggest between 15% and 20%, and as much as two-thirds, of Dutch bunker volumes are expected to shift to other locations, primarily Belgium, due to the cost differential created by RED III compliance requirements.

The implementation of mandatory MFM systems from 1 January 2026, has created additional operational challenges. The regulation requires every vessel calling at the Netherlands to be equipped with a continuous drip sampler, with joint sampling from vessels' manifolds becoming mandatory.

However, inspection agencies report widespread non-compliance issues. Common problems include non-compliant bunker metering tickets, systems showing batch errors exceeding 500%, missing totalizer locks, and incorrect backflow calculations. Some bunker tankers reportedly do not have totalizers or prevent access to them.

The ADN regulation, which requires closed measurements for UN 3082, has eliminated manual measurements as a fallback option for some fuels, including conventional bunker fuel and high-sulphur fuel oil. This change has raised concerns among buyers who will be forced to rely on MFM data even when discrepancies appear.

Christensen noted that under ADN, buyers will be forced to rely on MFM data even when things don't look right, which can be uncomfortable due to the MFM system's imperfections.

Despite the challenges, Christensen said he has become more positive about MFMs over the past two months, as they are narrowing the price gap between high-quality and low-quality suppliers and improving transparency. However, he questioned whether factory certification alone is sufficient to ensure accuracy, citing Singapore's enforcement model as a more robust approach.

Port authorities in Rotterdam have issued letters reminding license holders of the details that should be available for inspection during bunker deliveries, including certificates, tank measurements, and totalizer readings. The letter also describes consequences for acting in breach of the bunker licence if surveyors do not receive the necessary information.

Baron emphasized that while the objectives of the regulations are positive, the design and implementation have shortcomings. He said the evidence suggests regulations are not working as intended, with suppliers still fixing prices at premium levels.

The Bunker Services Initiative, representing around 20% of the ARA market initially, has been formed by industry participants including Minerva to establish new standards for transparency and operational efficiency.

Implementation of RED III varies across countries. Germany and Belgium are considering acceptance of grid-injected biomethane and terminal mass balance, while the Netherlands uses a molecule-based system that only accepts physically produced, liquefied, and delivered biomethane.

The Dutch regulation remains in draft form and has not been implemented into law, adding to industry uncertainty. Ship operators face potential penalties of up to €1.1m or 10% of company turnover for non-compliance under category 6 penalties.

IBIA, which has members in approximately 70 countries, said it continues to engage with regulators through its European regional board and working groups to address these challenges. The organization's working groups cover future fuels, technical and operational parameters, MFM bunker licensing, and digitalisation.

Constantinos Capetanakis, representing IBIA, said the association works to persuade authorities that problems affect the entire system, not just one side, and uses its expertise to push for sound, logical, and enforceable regulations.

The enforcement approach appears to be reactive rather than proactive, with inspection teams investigating after complaints are made by surveyors, fuel buyers, or suppliers, rather than conducting routine inspections.