WHEN WILL THE DEMAND FOR HSFO DROP OFF?

The global sulphur cap comes with so many side issues – scrubbers, insurance and compliance – that ship owners and operators will need to be on their toes well before the regulations actually come into force on 1 January 2020. The lack of compliant fuel has always been seen as a major stumbling block in the short-term; where will the bunkers be that can offer this fuel and when will it be widely available? We have looked at this issue before: ships being stranded because lack of compliant fuel and concerns that some ships might have to use non-compliant fuel if there is an initial shortage – all these are worries ship owners and operators will face in the early stages of the compliance changeover.

One pressing thought: when will the demand for HSFO drop off? This will happen at some stage in 2019 and then the other question is – when do you start cleaning your tanks ready to accept the new fuel? Bunkering is the issue and so is the refining process. The demand for new fuel will almost certainly be high in the latter part of 2019 and the first month of 2020. The refining process and production of low sulphur fuel is placing demands on both sides of the industry. The trick for ship owners and operators is making the date for transition work in terms of cost and operational supply.

Recent report have suggested African bunker fuel markets could struggle to implement the IMO sulphur cap and the suggestion is this could be down to extensive competition from Mediterranean ports and the question of marine fuel quality. Once again the question of quality of the product rather than the initial price is the issue. Availability and compliance are not always natural bedfellows in any industry but when it comes to the 326 million cubic miles of ocean, the world’s ships are expecting more than a sign saying “No Fuel Today!”

Maersk Line in favour of low sulphur fuel

Maersk Line is planning on opting for low sulphur fuel to comply with the new regulations of the global sulphur cap. Vincent Clerc, chief commercial officer of Maersk Line said that the container line is looking for a solution that will fit the existing fleet and not only the new ships. Moreover, Maersk prefers a proven solution with low sulphur fuel rather than LNG at this stage.

Read more here: TradeWinds

2020 noncompliance may play an important role in the industry’s response to new regs

Whilst much has been said about shifting to buying low sulphur bunker oil, investing in emissions-cleaning technology or alternative fuels – there are several options for shippers to deal with the upcoming regulations of sulphur 2020 cap.

But there is an optioned that isn’t really being addressed and should not be underestimated that is cheating and ignoring the rules entirely, according to a report from the Center of Global Energy Policy. Latter is becoming an urgent issue as there are currently no solutions in place enabling authorities to monitor these ships. The report also indicates that larger companies are less likely to choose noncompliance than smaller operators.

Read more here: Ship & Bunker
Find the full report here: Center of Global Energy Policy

 

Where do you think will be the biggest risk for noncompliance?

Omsk Refinery starts production of low-sulphur marine fuel oil

The Omsk Refinery in Russia has produced its first low-sulphur fuel oil to comply with the regulations of IMO’s global sulphur cap 2020. By developing a catalytic cracking technology in 2016 the refinery is now able to produce marine fuel oil that meet or fall below the 0.5% limit required as well as comply with the Eurasian Economic Community regulations and MARPOL ECA standards. The Omsk Refinery said it plans to ship as much as 50,000 tonnes of the low-sulphur marine fuel by the end of 2017, estimating the total market potential for the product at 158,000 tonnes per year.

Find the whole press release here: Gazprom Neft