oil-refinery

There are a host of surveys doing the rounds and almost all of them refer to the availability of new low sulphur fuels before the IMO global sulphur cap comes into force in January 2020. As we have been saying for many months now, the real issues at this stage are about the availability of the new fuels, the prices to be charged and the bunkering. These were some of the issues raised at meetings at Posidonia 2018 and by a couple of maritime publications over the past month.

Essben Poulson, newly re-elected chairman of the International Chamber of Shipping said in May that serious issues were in danger of impeding the smooth flow of maritime trade. He said it was still far from certain that sufficient quantities of compliant fuels would be available in ports worldwide by the start date of January 1 2020. With ship owners still not sure where and when the new fuels would be available from and importantly, at what prices, there is still more work to be done before the global sulphur cap becomes a smooth reality.

The suggestions of ships having to use non-compliant fuels have been mentioned and these concerns will only add to a sense of confusion until strong decisions and announcements are made. Then there are the costs to be added into this mixture of uncertainty: with scrubbers being touted at between $3-6 million dollars each and their size large enough to worry some ship owners about retrofitting, there have been many choosing to go down less expensive routes.

Ship owners and managers remain to be convinced about scrubbers but what other solutions are viable? According to an article in The Loadstar:  Less than 18 months before the IMO’s 0.5% sulphur cap regulations come into force for merchant shipping, container lines are worried that the estimated $50bn extra cost of the greener fuel could tip them into bankruptcy. “We’re all going to go bust,” MOL’s president and chief executive Junichiro Ikeda told the Financial Times. He expressed his concern that ocean carriers would be unable to recover sufficient amounts from shippers to mitigate the impact of the $300 a tonne extra cost of low-sulphur fuel oil (LSFO).

This idea about severe financial implications have been making the rounds in the past few months and yet the refiners are only now starting to calm some fears with announcements about low sulphur fuel oil (LSFO) and its availability. Whatever the issues they are all viewed as having the potential to negatively impact fuel and machinery systems and this is where alternative solutions such as fuel treatments enter the picture. There is still time for owners to make final decisions before everyone starts with tank cleaning and looks forward to an LSFO future. What there is no time for though is indecision and keeping anyone in the dark.