IBIA: Switch to 0.50% Global Sulfur Cap Represents "Not Step Changes but Brutal Changes"

Unni Einemo, IBIA's IMO representative and media & communications manager

The International Bunker Industry Association (IBIA) has warned that shifting to a 0.50 percent global sulfur cap for marine fuel represents "not step changes but brutal changes," that will require "paradigm shifts on ship engines," Seatrade Maritime reports.

"We are looking at a virtually overnight shift from [max] 3.5 percent fuel sulfur content to 0.5 percent. There is a real risk that the change would cause a period of severe product shortages and inflated prices," Unni Einemo, IBIA's International Maritime Organization (IMO) representative and media & communications manager, said at SMM earlier this month.

IMO is set to decide next month on whether the new cap comes into force from 2020 or 2025, and as already discussed in detail by Ship & Bunker, for most the new limit will mean a shift from using fuel oil to only distillate fuels. 

The official fuel availability study undertaken by CE Delft has found that there are no major barriers to producing enough compliant bunkers to meet such a cap by 2020, while an independent fuel availability analysis found that if the new requirement comes into effect in 2020, refiners could have "extreme difficulty" in meeting demand for low sulfur fuels.

The EU has already committed to enforcing the cap from 2020 regardless, meaning the potential for further complexity if IMO decides to go with 2025.

Einemo explained that if the 2020 date is chosen, a fuel switch volume of approximately 4 million barrels per day (bpd) would be required from that date onwards.

However, leading up to that day current spec maximum 3.5 percent bunkers would still have to be produced and supplied, meaning there would be a dramatic shift in the supply and demand picture, literally overnight.

"The transition from 3.5 percent to 0.5 percent is not as easy as flicking a switch," said Einemo.

IBIA has previously warned on the complexities of such a transition, and has proposed several strategies to ease the changeover process, including a phasing in of the 0.5 percent requirement for ships sailing in Exclusive Economic Zones (EZZ), region by region, and over an extended period of time, rather than all at once.

As Ship & Bunker has previously reported, speaking at a Connecticut Maritime Association (CMA) event in late June, John Mahon, director at Kinder Morgan Terminals, said that so far refiners have expressed "little interest" in addressing the so-called fuel oil problem, or making a compliant bunker fuel.