Marine insurer Skuld has reported a range of operational challenges linked to the use of certain biofuel blends, including cases of engine damage associated with cashew nutshell liquid (CNSL) contamination in conventional marine fuels.

The insurer said it has been receiving enquiries from members regarding biofuel use since the fourth quarter of 2019, reflecting the shipping industry’s growing interest in alternative fuels as it responds to tightening decarbonisation regulations.

According to Skuld, several vessels reported operational issues during the fourth quarter of 2024 and the first quarter of 2025, primarily affecting fuel systems. Reported problems included injector failures, clogged filters and heaters, fuel sludging and deposit accumulation caused by contaminated fuels.

Extended gas chromatography–mass spectrometry (GC-MS) testing of heavy fuel oil (HFO) and very-low-sulphur fuel oil (VLSFO) samples identified significant concentrations of phenolic compounds such as cardol, cardanol and anacardic acid, which are indicators of CNSL.

CNSL is a byproduct of cashew nut processing that has been explored as a low-cost renewable fuel component. Skuld noted that although CNSL can improve lubricity and increase the energy content of fuel blends, it is highly acidic and exhibits poor combustion characteristics. The insurer warned that its corrosive properties and instability can lead to accelerated wear in fuel pumps, cracks in fuel systems and reduced engine performance.

By contrast, Skuld said fatty acid methyl esters (FAME) have generally demonstrated reliable performance in trials and operational use among insured vessels. FAME-based fuels can function as drop-in fuels for existing ship engines, provided they are approved by engine manufacturers.

However, the insurer highlighted several stability concerns associated with FAME. The fuel can degrade over time due to oxygen content and unsaturated compounds, and its stability may worsen if alcohol or water is present. Thermal exposure or light can further accelerate degradation, while oxidation increases fuel acidity and viscosity, potentially leading to deposits that block filters and fuel lines.

Skuld said it has also received enquiries about used cooking oil methyl ester (UCOME), a lower-cost biofuel derived from waste oils, used cooking oil and animal fats. UCOME is typically blended with conventional fuels, such as B24 or B30 blends, and is considered compatible with existing marine engines as a drop-in fuel.

Nevertheless, Skuld noted that UCOME has operational limitations, including limited supply and stability concerns. The fuel can absorb water, which may encourage microbiological growth and cause filter blockages, and it can pose storage challenges similar to those of other biofuels. The insurer added that it has not yet recorded any claims related to engine damage from UCOME-blended fuels.

Skuld also pointed to the regulatory environment driving interest in alternative fuels, noting that authorities in the EU and the European Economic Area are increasingly focusing on greenhouse gas emissions from vessels operating in EU/EEA waters and on the greenhouse gas intensity of fuels used on board.

The insurer emphasised the importance of fuel quality management and recommended using the ISO 8217:2024 specification for bio-residual marine fuels when testing bunkered fuel. Skuld advised operators to conduct fuel analysis before use, avoid untested biofuel products and carry out thorough vetting of bunker suppliers.