The Asia-Pacific region's limited demand for biofuels is discouraging companies from investing billions into regional projects, according to ExxonMobil (NYSE:XOM)'s executive Irtiza Sayyed. Speaking at the Singapore International Energy Week, Sayyed noted that despite global decarbonization efforts, biofuels, which are costly and have limited feedstock options, lack sufficient demand in the region.
ExxonMobil, with a market cap of 433.74B USD according to InvestingPro, has been closely monitoring the biofuels market. The company, known for consistently increasing earnings per share and raising its dividend for 40 consecutive years, according to InvestingPro Tips, sees the potential but also the challenges in the biofuels sector.
Shell (LON:SHEL) recently put a biofuels project on hold in Singapore due to these challenges. Conversely, Finnish firm Neste has increased its local plant's sustainable aviation fuel capacity by up to 1 million metric tons annually, demonstrating a contrasting approach to the market's conditions.
Sayyed emphasized the need for more dialogue between the aviation and shipping sectors to spur growth in biofuel supply. He argued that enhanced communication could help align these industries with the rising global usage of biofuels. This comes as ExxonMobil's revenue growth has been slowing down recently, according to InvestingPro Tips, indicating the need for innovative strategies to boost growth.
However, analysts from BMI Research noted that this global increase is primarily concentrated in key agricultural markets such as the United States, Brazil, India, and Thailand. This concentration has led to a surplus of biofuel feedstocks.
In related news, Evergreen is working towards achieving net-zero emissions by 2050, in line with the International Maritime Organization's GHG strategy. The company has partnered with Copenhagen Infrastructure Partners to explore hydrogen-based marine fuels.
Additionally, DHL Express and World Energy have committed to accelerate aviation logistics decarbonization by purchasing about 668 million liters of Sustainable Aviation Fuel through certificates (SAFc). This initiative aims to reduce around 1.7 million tons of carbon dioxide emissions over the fuel lifecycle.
In other energy news, Shandong Lianmeng Chemical Company contracted Stamicarbon for a grassroots urea melt and prilling plant in China. The plant will employ Stamicarbon's Ultra-Low Energy design that uses high-pressure steam heat thrice, significantly reducing energy consumption.
Lastly, Belarus expects to receive $640 million from Russia in 2024 as compensation for losses incurred by its oil refineries following Moscow's tax policy changes in 2019.
ExxonMobil continues to be a prominent player in the Oil, Gas, and consumable Fuels industry, with analysts predicting the company to remain profitable this year, as per InvestingPro Tips. For more tips and real-time metrics about ExxonMobil and other companies, visit InvestingPro.
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