"Urgent Preparation Needed" for 2015 Sulfur Regulations

by Ship & Bunker News Team
Tuesday July 1, 2014

With stricter sulfur regulations set to come into force on January 1, 2014, Singapore based bunker and lubes trader Dynamic Oil Trading today has called for urgent preparation by operators to ensure they have the necessary supply of compliant bunkers.

Writing in an emailed statement, Dynamic Oil Trading CEO Lars Møller said that although there were a number of compliance options available, most owners and operators will look to distillates as the most viable solution, but the implications of the new low sulfur rules on fuel availability were unclear.
 
"It is therefore vital that every operator with vessels travelling through ECAs prepares now in order to find the optimal fuel procurement strategy that ensures access to high-quality, on-spec fuel products and that also keeps their fuel bill down.  Waiting until the last minute risks compromising on availability, quality and price," said Møller.

"We are encouraging our customers to be proactive in mapping out the precise fuel requirements of their ECA operations, in order to secure the fuel they need on the best possible terms and in a way that meets their specific operational needs."

Møller said that there was no guarantee that all physical suppliers will be able to supply the compliant products that are needed, in the right place, and at the right time, and that availability in some ports could be "patchy".

"The only way to avoid the risk of an impact on operations or the risk of non-compliance with the 2015 ECA standards is to prepare now," he said.

Møller also encouraged all owners and operators to look at price hedging tools in order to limit their exposure to bunker price fluctuations and to lock-in costs ahead of time, saying it not only helps to keep fuel bills as low as possible, but also provides greater certainty over costs.

"There is uncertainty across the entire industry over the impact of the new sulphur regulations, but this can be managed and the costs can be mitigated through a proactive approach to planning ahead and by working with fuel supplies in order to adapt fuel procurement strategies for ECA voyages," he said.

Vessels operating within Emission Control Areas (ECAs) are currently required to use a marine fuel with a sulfur content not exceeding 1.0 percent by weight, or where permitted use an equivalent method of compliance.

On January 1, 2015 that limit will drop to 0.10 percent by weight.

Earlier this year a survey of shipping companies revealed that the vast majority will chose MGO for compliance.