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
Although using scrubbers would be one solution for meeting the requirements of lower sulphur emission standards, at this point in time, only around 500 ships have installed scrubbers. “Fairly disappointing,” says director of scrubber producers’ association EGCSA.
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When do you think will the market for scrubbers take off?
A significant number of carriers are still undecided how best to cope with the IMO’s 2020 global sulphur cap. But there seems to be an increasing number of shipping lines that are coming out against scrubbers; Maersk has optioned not to use them and so has Norwegian, Klaveness, who after testing the technology also believes that scrubbers are too expensive and not a viable option at the present time.
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Do you think other carries will follow Maersk and Klaveness and opt out of using scrubbers as the solution and seek other solutions?
Maersk has stated that they do not see the business case for investing in scrubbers as a long-term solution. Besides the costs, scrubber open-loop systems come with a regulatory risk as they are not designed to cope with all of the environmental regulations likely to be imposed on shipping over the next decade.
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What do you think about scrubbers not being a long-term solution? Would you still consider scrubbers as a solution to ensure compliance with the global sulphur cap?
A sense of anxiety is gripping the shipping industry as it looks toward the imposition of more stringent sulfur restrictions on marine fuel on January 1, 2020. But why?
Many shipowners have yet to make up their minds on what fuel to use: will they pay more for diesel fuel? Burn hi-sulfur fuel and invest in expensive scrubbers? How about LNG? Ultimately it will be a mix of approaches, but with most players likely to choose diesel in the short run. As a result, many foresee a spike in diesel prices as the IMO’s 2020 deadline nears.