XFuel's EIC Accelerator Turns Ship Sludge Into Marine Diesel

Shipping and aviation cannot switch fuels without switching engines, which is why a drop-in fuel that meets the existing standard is worth more than a better one that does not. XFuel, whose Spanish entity Global Ecofuel Solutions holds this EIC grant, refines impure waste hydrocarbon liquids, fossil or biological, into fuels that meet the marine gas oil standard ISO 8217 DMA and the road diesel standard EN590, with certified greenhouse gas savings the project puts above 80%. Its research base is in Bunyola, Mallorca; the group company is in Dublin.

The EIC Accelerator selected the project, ROW2FUEL, at its October 2024 cut-off for blended finance, and CORDIS records a grant of €2,499,999 from March 2025 to February 2027. The project's claim is economic as much as environmental: the process is cheap enough to sell low-carbon fuel at fossil fuel market prices, into a marine and aviation fuel market it puts at $380 billion today and $900 billion by 2030, with fuel sales starting in 2027.

Shipping companies buying into their own waste

On 27 January 2026 XFuel announced the completion of a $20 million Series A, including a recent extension, backed by the Japanese shipping line NYK and Stolt Ventures, the venture arm of the tanker and logistics group, alongside Wagner Carbon, Audacy, Future Planet Capital, Light Ray Ventures, Overlap Holdings and existing investors Union Square Ventures, AENU and SOSV, as Ship & Bunker reported.

The strategic logic is circular in the literal sense. Ships generate oily sludge, regulated under MARPOL Annex I, which has to be landed and disposed of. XFuel's immediate focus is converting that sludge into marine gas oil grade fuel, with savings reported at up to 85% under EU renewable energy rules. A shipping line that invests is a potential feedstock supplier and a potential customer at the same time. The partners are to explore long-term offtake arrangements, pilot programmes and joint ventures at strategic ports; none of those is signed.

A pilot plant measured in litres per hour

The gap between the ambition and the plant is wide. The existing facility in Spain has a capacity of 150 litres an hour and serves as a research and feedstock analysis hub for future commercial projects, according to the same trade coverage. Marine fuel is sold in thousands of tonnes. The EIC project is the step between those two, and the company's own plan has fuel sales beginning in 2027 and a return on investment four years after the project started.

XFuel also publishes a second technology, Mechanical Carbon Conversion, which processes waste solid biomass and waste oils into fuel and biochar, giving both avoided and removed carbon. Neither technology has a published independent performance test, and CORDIS shows no periodic report.

1. Fuel meeting existing standardsClaimedISO 8217 DMA and EN590 cited by the company; no third-party test published.
2. Strategic investors from shippingSecuredNYK Line and Stolt Ventures in the January 2026 round.
3. Commercial-scale plantNot builtPilot capacity of 150 litres an hour.
4. Offtake contractsExploratoryDescribed as potential offtakes and talks.

Grant, round, and a plant still to pay for

The €2.5 million grant is small against the cost of a refinery, which is the point of the business model: decentralised plants built in joint ventures with whoever owns the feedstock, so XFuel supplies the technology rather than the capital. One trade report describes the EIC award as a blended-finance package of about $9 million, which would imply EIC Fund equity on top of the grant; no such investment has been announced, and CORDIS records only the grant. The Spanish company's accounts were not obtained for this article.

Rules, not taste, create this market

Shipping is now inside the EU emissions trading system and FuelEU Maritime requires the greenhouse gas intensity of marine fuel to fall, which gives a drop-in fuel with certified savings a buyer whether or not it is cheaper. The same applies to aviation blending mandates, which is why the company lists sustainable aviation fuel as in development. The EIC grant backs the European end of a company whose holding entity is Irish, whose laboratory is Spanish and whose Series A backers include the Japanese shipping line NYK and Stolt Ventures.