IMO Fuel Availability Study "Flawed," Says BIMCO

Lars Robert Pedersen, Deputy Secretary General at BIMCO, says IMO's fuel availability study is "flawed."

Lars Robert Pedersen, Deputy Secretary General at BIMCO, says the International Maritime Organization's (IMO's) fuel availability study is "flawed" and not sufficient to determine adequate availability of low sulfur fuel should a 0.50 percent global sulfur cap be implemented in 2020.

As Ship & Bunker has previously reported, the study, conducted on behalf of IMO, found that there are no major barriers to producing enough compliant bunkers for 2020.

Pedersen's comments came as part of a statement by BIMCO on Monday in which the organisation pointed out that "a significant amount" of the fuel oil that the IMO study suggests will be available for use is unsafe to store and use onboard ships.

BIMCO also says that the study fails to address how a shortage of sulfur removal capacity in refineries will be resolved in time for 2020, and fails to model the disruption that an overnight introduction of the global cap would cause.

"It is clear that the IMO study is flawed, meaning it is not possible to determine from the study that there would be sufficient fuel available in 2020," said Lars Robert Pedersen, Deputy Secretary General at BIMCO.

"On that basis, our opinion is that it would be irresponsible for IMO to make the decision to go for 2020 at MEPC 70 in October."

BIMCO stresses that other sectors could could also face major disruption if adequate analysis to ensure sufficient fuel availability beforehand.

"This is not about the cost of low sulfur fuel for ships – that has long been known. We know that the shipping industry will buy the fuel they need. But if it is in short supply, the cost will rise not just for shipping but for all users of the fuel. This will price those in poorer economies out of the market," said Pedersen.

"It's a complex issue – but the difficulties in ensuring sufficient refinery capacity and the disruption caused by an overnight introduction have to be thoroughly taken into account."

As Ship & Bunker reported in August, an independent study, submitted to IMO by BIMCO and global oil and gas industry association IPIESA, found that refiners could have "extreme difficulty" in meeting demand for low sulfur fuels should a 0.5 percent global sulfur cap on marine fuels be implemented in 2020.