HANSA - International Maritime Journal, November 2018

Schiffstechnik | Ship Technology
14 months to go
Photo: Selzer
The IMO’s decision to implement the 0.50 % sulphur limit for marine fuels on ships
operating outside sulphur emissions control areas (ECA-SOx) from 1 January 2020 has the
industry scrambling for solutions. After an initial period of scepticism and doubt, the
debate has firmly turned towards the transition and implementation planning for 2020
Various market surveys indicate that
most shipowners and operators intend
to comply with the MARPOL Annex
VI regulation 14.1.3 by burning 0.50%
Very Low Sulphur Fuel Oils (VLSFOs).
As a member of various industry forums,
LR’s FOBAS (Fuel Oil Bunker Analysis &
Advisory Service) team is actively participating
in these discussions to help guide
the industry by carefully considering operators
requirements and concerns.
Refiners and suppliers
Refineries, storage depots and physical
suppliers will have to contend with over
150 mill. t of high sulphur residual fuel oil
becoming surplus to demand from 1 January
2020, being replaced by the demand
for maximum 0.5% VLSFO.
Refiners are faced with difficult decision
to make multimillion pound longterm
investment for bottom upgrading,
source sweet crude or look for other outlets
of high sulphur residual fuels after
January 2020 when this convenient marine
bunker option is no longer available.
Some refineries have made a decision to
invest in coking plants. However, there
are others who may be playing a waiting
game to see how the exhaust gas scrubber
market evolves. The IMO fuel availability
study predicted that around 3,800 ships
with Exhaust Gas Cleaning systems
(EGCS) will be in use by the implementation
date; however, so far the projected
numbers are more in the region of 1,500-
2,000 units or ships. Considering almost
fifty thousand ocean-going vessels will
be affected, the aforementioned number
appears not significant enough to have a
major impact on global high sulphur fuel
oil (HSFO) demand from 2020.
Nonetheless, in view of expected greater
price differential between HSFO and
0.5% VLSFO by 2020, shipowners and
operators have shown increased interest
in EGCS installations yet there are a
number of operational, logistical, technical,
regulatory and commercial parameters
requiring careful consideration,
making it a complex decision-making
process. LR has developed an options
evaluator to help clients make an informed
decision based on the specific operational
profile of vessels.
To help the supply chain, we also emphasise
to ship operators that they open
dialogue with their charterers and suppliers
and place their interest in the type
of fuel they will need, based on ship operations
and trading pattern, so that
suppliers also get themselves prepared
to meet the demand ahead of 1 January
2020 deadline.
An update from the IMO
MEPC 73 is scheduled in a week’s time
(22-26 October) where S2020 will be a
main discussion point. It is expected that
the final draft on the carriage ban of high
sulphur fuels (unless a ship is fitted with
an EGCS) is expected to be adopted with
the convention, eventually coming into
force on 1 March 2020. It is also expected
that at this meeting, the Ship Implementation
Plan (SIP) for consistent implementation
will be discussed including
the guidelines for Port State Control.
A Joint Industry Project (JIP) working
group has been tasked to develop »Joint
industry guidance on potential safety
and operational issues related to the supply
and use of 0.5% max Sulphur fuels«.
It is expected that a draft of this comprehensive
guidance document will be submitted
to PPR6 (Pollution prevention and
Response – An IMO sub-committee) in
February 2019.
54 HANSA International Maritime Journal – 155. Jahrgang – 2018 – Nr. 11