IMO likely to set global sulfur cap on bunker fuel from 2020


The International Maritime Organization will likely set a global sulfur cap of 0.5% on bunker fuel from 2020, senior partner Adrian Tolson at 20|20 Marine Energy consultancy told S&P Global Platts Wednesday.

“If it’s implemented in 2020, it will be more for political reasons than anything else as the world is moving to cleaner fuels,” he said.

The IMO’s Marine Environment Protection Committee is due to meet later this month to decide whether to introduce a global sulfur cap from 2020 or from 2025.

In the meantime, questions remain over whether there will be adequate supply of low sulfur fuel oil to meet demand, he said.

While major bunker centers like Singapore and Fujairah will be able to supply 0.5% and even 3.5% sulfur fuel oil, smaller ports may not have the infrastructure and blending components to follow suit, he said.

“The [US] West Coast has a lot of high sulfur fuel oil because of Mexico; you could blend this down to 0.5% but not in large quantities, but in the US East Coast, there’s a lot of LSFO components. It’s hard, without some detailed analysis, to predict the availability of LSFO on a port or region basis 2020 onwards,” he said.

Another issue is that ships which have fitted scrubbers on board could have problems getting 3.5% sulfur fuel oil if refineries produce and blend 0.5% sulfur marine fuel oil.

“No one has yet committed to having supply of high sulfur bunker available. Ships that install scrubbers need to know if they can source the product. It is likely that non-upgraded refineries in Russia, Latin America and Iran will be massive producers of this product in a post-2020 world and ship owners will have to find locations where they can get his product,” he said.

Then, there is the question of global compliance, he added.

“Compliance [at Emission Control Areas] is estimated at around 75% right now, but the world is moving towards cleaner fuels and some compliance is better than none, though it will be interesting to speculate on how enforcement is carried out on a global basis,” he said.

“There will be people who won’t comply in the high seas — and those who do won’t be happy,” he added.

While Tolson said the global desulfurizing capacity was not yet able to meet the expected standard, the maritime industry would adjust to a 0.5% global cap should the IMO make that decision later this month.
Source: Platts



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