Asia/Pacific News
2020 Global Sulfur Cap: Market is "Psychologically" Ready, Refining is Not
While the market is "psychologically" ready for a potential 2020 implementation of a global 0.5 percent global sulfur cap for bunkers, refiners do not have enough time to prepare for it should the International Maritime Organization (IMO) go ahead with the move, global head of Maersk Oil Trading, Joshua Low, told the Asian Refinery Summit in Singapore this week.
Low's point was that it will take years to convert and build necessary infrastructure to satisfy the new regulations, but the IMO is only expected to make a final decision on the implementation date by 2018.
Building the necessary desulfurisation unit at a refinery, for example, would take four years, noted Low.
In general the industry needs more time to make "wise decisions," he said, such as making sure the cost of compliance was not higher than non-compliance.
Another issue was the fact that at the moment there was no uniform policies on enforcement or fines.
Low is certainly not the first to make such comments, which serve as a reminder that these have been persistent issues for a considerable time now.
The alternative date for the 0.5 percent global sulfur cap is 2025, but even this has been dismissed by some industry experts, who have argued that the amount of time it would take to repurpose HFO used by marine, even in nine years the refining picture would look effectively the same as today.
"2025 doesn't make a lot of sense to me because if you really want to wait until the day there is no longer any high sulfur fuel, I would say change that from 2025 to 2075. Maybe you have a shot," Oil and bunker industry veteran Dr Rudy Kassinger told delegates at last year's Connecticut Maritime Association (CMA) Shipping 2015 event.
In March of 2015 Ship & Bunker reported that the low sulfur emission regulations coming in 2020 could add $100 billion to shipping's total annual bunker bill.
