Benjamin P. Cowart, Chairman and CEO, Vertex Energy, Inc., says ECA fuel requirements fit well with the company's existing processing capabilities
Houston-based Vertex Energy, Inc. [NASDAQ:VTNR] (Vertex Energy), who describes itself as "an environmental services company that recycles industrial waste streams and off-specification commercial chemical products," is looking to enter the bunker fuels market, Chairman and Chief Executive Officer Benjamin P. Cowart told shareholders in a letter released last week.
In the letter, Cowart acknowledged the negative impact that the significant drop in crude oil and related prices had had on the business in 2015, and said he was expecting a difficult 2016 ahead.
One of several areas the company was now considering to improve its fortunes was the development of finished marine fuels.
"The relatively new [Emissions Control Area] ECA fuel requirements fit well with our existing processing capabilities particularly in the Gulf Coast," said Cowart.
Benjamin P. Cowart, Chairman and Chief Executive Officer, Vertex Energy, Inc.
We intend to aggressively pursue this market in 2016
"Our vacuum gas oil (VGO) product can be sold into the marine fuel market at improved pricing relative to traditional VGO markets. We intend to aggressively pursue this market in 2016."
Since January 1, 2015 ECA rules in both North America and Europe have called for a sulfur cap of 0.10 percent on bunkers used within the respective designated zones.
As traditional HFO products cannot be produced with such a low sulfur content, most operators using a fuel switching solution for compliance are burning 0.10 percent sulfur MGO.
However the new rules have prompted a new class of so called "hybrid fuels" to be introduced to the market.
Also know as "heavy distillates," analysis on existing such products - which do not have an ISO 8217 specification - has reveal that they appear to be based on vacuum gas oils.
Last year, Steve Bee, Global Business Director, Intertek (Lintec) ShipCare Services said that initial test investigations of the new generation of hybrid fuels show they appear to burn faster and cleaner than their traditional fuel oil counterparts.