Case Study: Replacing MGO with B30 at current market conditions

For many ships operating on European routes, 0.10% marine gas oil remains the most straightforward fuel choice, particularly attractive for ships without scrubbers and for vessels spending most of their operating time in European waters. The Baltic Sea, North Sea and, since 2025, the Mediterranean Sea are sulphur emission control areas in which the sulphur content of fuel used on board is limited to 0.10%.

The current fuel market has further changed the economic weight of that decision. Disruption around the Strait of Hormuz has affected middle-distillate prices particularly strongly. ENGINE reported that low-sulphur gas oil and LSMGO prices reacted more sharply than several other bunker grades (including bio) during the disruption. Therefore, the question is whether the B30 premium still survives once energy content, EU ETS savings and FuelEU surplus value are included.

The current price comparison

For this calculation, we use a current Rotterdam LSMGO price of 1,264 USD/t as published by Integr8 Fuels and noted on 16 August.

For B30-LSMGO, ENGINE reported a price of 1,375 USD/t on 31 July 2026. Its 7 August update showed a further decline of 54 USD/t, resulting in:

• LSMGO: 1,264 USD/t

• B30-LSMGO: 1,321 USD/t

Note, this is not a perfectly synchronous comparison: the B30 price is from 7 August, while the LSMGO figure is the newer indication. Given that subsequent B30 observations reportedly moved lower again, the 1,321 USD/t assumption remains conservative rather than deliberately favourable to B30.

On a simple tonne-for-tonne basis, the difference is already relatively small (57 USD/t). B30 is therefore only around 4.5% more expensive per physical tonne. However, the fuels do not contain the same amount of energy.

The energy-adjusted premium

FuelEU assigns MGO a lower calorific value of 42.7 MJ/kg. For the FAME-type bio-component, an energy content of approximately 37.2 MJ/kg is used. Assuming a B30 containing 70% LSMGO and 30% Bio100 by mass, the approximate energy content is:

70% × 42.7 + 30% × 37.2 = 41.05 MJ/kg

A vessel therefore needs approximately:

42.7 ÷ 40.99 = 1.0401 tonnes of B30

to replace the energy contained in one tonne of MGO.

At 1,321 USD/t, the energy-equivalent B30 cost is:

1.0401 × 1,321 USD = 1,373.97 USD

The correct physical-fuel comparison is consequently:

• LSMGO: 1,264.00 USD/t MGO-equivalent

• B30-LSMGO: 1,373.97 USD/t MGO-equivalent

The energy-adjusted B30 premium is therefore 109.97 USD/t MGO-equivalent. This means that EU ETS alone now absorbs most of the remaining difference.

EU ETS reduces the premium to about 32 USD

From 2026, maritime EU ETS covers CO₂, methane and nitrous oxide, and the phase-in of the surrender obligation is complete. The system generally covers 100% of emissions on intra-EU voyages and in EU ports, and 50% on voyages between an EU and a non-EU port.

Using the current EU ETS default factors, one tonne of MGO represents approximately 3.255 tCO₂e on a Tank-to-Wake basis.

For the biofuel fraction, sustainable biogenic CO₂ can be zero-rated under EU ETS where the applicable sustainability and GHG-saving criteria are fulfilled. Methane and nitrous oxide are still relevant. S&P Global applies a Tank-to-Wake factor of 0.05489 tCO₂e/t fuel to the Bio component to account for those non-CO₂ gases.

Using those assumptions, one tonne of B30 has an illustrative Tank-to-Wake position of:

70% × 3.255 + 30% × 0.05489 = 2.29497 tCO₂e

After adjusting for the 1.0417 tonnes of B30 required to replace one tonne of MGO, the result becomes:

2.29497 × 1.0401 = 2.38700 tCO₂e

The EU ETS reduction is therefore:

3.255 − 2.387 = 0.868 tCO₂e

At a EUA price of 81.79 EUR/tCO₂e as per Trading Economics from 14 August, this creates an ETS saving of:

0.868 × 81.79 EUR = 70.99 EUR

Using an illustrative exchange rate of 1.16 USD per Euro, this equals approximately 82.35 USD. The B30 premium was 109.97 USD/t MGO-equivalent. After EU ETS, the remaining difference is therefore only USD 27.62 USD/t MGO-equivalent. For a fully covered intra-EU voyage, B30 therefore needs comparatively little FuelEU value to reach break-even.

MGO creates a FuelEU deficit

FuelEU Maritime measures greenhouse-gas intensity on a Well-to-Wake basis. For the 2025–2029 period, the maximum permitted intensity is 89.3368 gCO₂e/MJ, representing a 2% reduction from the reference value of 91.16 gCO₂e/MJ.

Using FuelEU’s default MGO values, including 14.4 gCO₂e/MJ of Well-to-Tank emissions and the applicable Tank-to-Wake factors, MGO has an illustrative Well-to-Wake intensity of:

90.76745 gCO₂e/MJ

It therefore remains above the current FuelEU target and results in non-compliance. As previously described, the energy contained in one tonne of MGO is 42,700 MJ. Its corresponding compliance balance is approximately -0.06109 tCO₂e.

B30 turns that deficit into a surplus

The precise FuelEU result for B30 depends on the certified production pathway and sustainability documentation of the delivered biofuel. For a transparent illustration, this calculation assumes a certified Well-to-Wake value of 18.8 gCO₂e/MJ for the bio-component corresponding to a 80% reduction compared to RED. The value should not be treated as an automatic default for every B30-LSMGO stem as the actual delivered fuel’s proof of sustainability remains decisive. Using that assumption, the energy-weighted Well-to-Wake intensity of the B30 blend is approximately:

69.47721 gCO₂e/MJ

For the same 42,700 MJ of energy contained in one tonne of MGO, the B30 position becomes 0.83410 tCO₂e. Replacing the MGO therefore changes the compliance position from -0.06109 to +0.83410 tCO₂e, Resultantly, the total FuelEU improvement is approximately 0.89519 tCO₂e. That is the amount against which a FuelEU surplus price can be applied.

What does the BetterSea FuelEU surplus index imply?

BetterSea’s FuelEU Surplus Index latest published weighted end-of-month price for compliance year 2026 was 114.00 EUR/tCO₂e on 31 July 2026. The corresponding weighted monthly average for July was 106.52 EUR/tCO₂e.

Using the weighted end-of-month price of EUR 114/tCO₂e, the FuelEU improvement created by replacing MGO with B30 is worth approximately:

0.8757 × 114 EUR = 102.05 EUR or 118.38 USD/t MGO-equivalent

The complete intra-EU calculation is therefore:

• Energy-adjusted B30 premium: 109.97 USD/t MGO-equivalent

• EU ETS saving: 82.35 USD/t MGO-equivalent

• FuelEU value: 118.38 USD/t MGO-equivalent

The combined regulatory benefit is therefore 200.73 USD/t MGO-equivalent and after deducting the physical fuel premium, B30 is approximately 90.76 USD/t MGO-equivalent cheaper than MGO on a fully covered intra-EU voyage under the stated assumptions.

Conclusion: Replacing MGO with B30

While bio-blends should intuitively be more expensive than its fossil fuel alternatives, the current geopolitical and market conditions may result in favorable conditions for alternative fuels. It is worthwhile to regularly compare and check relevant fuel prices and assess the option of a fuel switch. The above sample case has shown that using bio-blends can even result in cost savings but it is essential to consider the assessment's intricacies such as reduced energy content of bio-blends and PoS-specific emission factors.

Note, all calculations have been performed using BetterSea's FuelEU Calculator. The assessment represents a snapshot of the market as of 17 August.