Research firm Woodmac sees a rise in the use on ships of “scrubbers”, the equipment to clean up sulphur emissions, before the International Maritime Organization imposes new rules from Jan. 1 2020 to limit sulphur content in fuel.
Woodmac forecasts that just over 10 percent of marine fuel will be scrubbed in 2020 when the regulations kick in.
The IMO will prohibit ships using fuels with sulphur content above 0.5 percent from Jan. 1, compared with a limit of 3.5 percent now, unless they are equipped with scrubbers.
Woodmac anticipates compliance with the regulation to be at 85 percent in 2020, rising to full compliance by 2025.
Use of liquefied natural gas (LNG) in shipping will increase 70 percent between 2019 and 2020, which will displace 100,000 barrels per day (bpd) of marine fuels in 2020.
Woodmac estimates availability of very low-sulphur fuel oil at 1.4 million bpd in 2020 and 1.7 million bpd in 2024.
Refining margins are expected to rise across the board in 2020, but the big winners will be deep conversion refineries, with units to convert heavy residues to lighter, more valuable products, and refineries that focus on production of distillates, Woodmac said.