EMEA News
Mediterranean Bunker Market in Wait-and-Watch Mode as ECA Nears
With the Mediterranean Sea set to become a Sulfur Emissions Control Area (Med SECA) on May 1, 2025 - requiring ships transiting the region to use bunker fuels with a maximum sulfur content of 0.10% - many bunker suppliers remain cautious and hesitant to expand their LSMGO supply capacity.
Instead, they are adopting a wait-and-watch approach, preferring to assess actual demand once the regulations take effect.
Market Readiness and HSFO Demand from Scrubber-Fitted Ships
Most Greek suppliers are holding off on increasing onshore LSMGO storage and barge capacity until demand patterns become clearer, one Greek trader told Ship & Bunker.
There are concerns over whether sufficient LSMGO will be available as the region transitions to stricter sulfur regulations.
"Refineries, product traders, and suppliers must be prepared for this transition," the Greek trader noted.
"Of course, everyone expects some initial supply issues, such as product shortages and logistical challenges."
Some suppliers in the Mediterranean anticipate increased HSFO demand from scrubber-fitted ships, but are uncertain about the extent of the rise in percentage terms, the trader added.
A scrubber is an exhaust gas cleaning system (EGCS) used on ships to reduce sulfur emissions from HSFO. This allows ships fitted with scrubber systems to burn cheaper HSFO while meeting IMO sulfur limits, such as the 0.50% global cap or stricter 0.10% sulfur rules in designated regions.
The global scrubber-equipped fleet currently consists of 6,032 vessels, according to data from classification society DNV.
This marks a significant increase from 3,140 in 2019, but growth has since stagnated, with DNV projecting the number to reach only 6,291 by 2027.
Scrubber Systems
Finnish marine engineering firm Wärtsilä told Ship & Bunker that their scrubber systems can seamlessly cut HSFO's 3.5% sulfur content down to 0.10%, even if previously configured to scrub to 0.50%.
"For the majority of customers, installed Wärtsilä scrubber systems will be capable of achieving the required 0.10% levels," a Wärtsilä representative said.
"A small number of vessels are designed to meet the 0.50% emission target only. Mostly, these are vessels where the owner's strategy has been to use 0.10% sulphur fuels within the Emission Control Areas.
"For these vessels, some minor modifications might be needed in order to be able to reach the 0.10% level."
The reduction of sulfur to 0.10% depends on the scrubber system's design, efficiency, and the vessel's operational profile.
"Depending on the scrubber and vessel this [sulfur reduction] would be achieved by either increasing the amount of washwater, using addition of an alkali, or reducing the engine load," Wärtsilä said.
Shipowners using Wärtsilä's scrubber systems can switch to 0.10% mode with just as little as a click of a button.
"For most systems, the process to switch the scrubber into 0.10% mode is a simple one, Wärtsilä mentioned.
"Depending on the specifications of the customer at the time of order this can either be done at the push of a button, which is often the case, or with one of our service engineers adding the functionality.
"Where the vessel has remote capabilities, our service engineers can do this remotely."
According to DNV data, almost 630 vessels are equipped with Wärtsilä's scrubber systems.
Regional Supplier Perspectives
One trader stated that suppliers in Gibraltar Strait are still considering their options but have yet to make any changes to their supply chains.
"Everyone seems to be waiting and watching," the trader told Ship & Bunker.
Gibraltar, the largest bunkering hub in the Mediterranean, has long been a key refuelling stop for vessels transiting between the Atlantic and the Mediterranean. Its response to the new regulations may influence supplier strategies across the region.
In Italy, no significant changes have been made to the supply chain so far, a local source said.
A Portugal-based trader told Ship & Bunker that they will continue offering HSFO, VLSFO, and LSMGO without making any immediate changes to their supply capacity.
"Depending on demand, we can explore increasing MGO capacity onboard barges, the trader said.
"No need to change onshore tank capacity, as we always adjust barge tank segregation to increase MGO capacity when necessary."
The trader added that they do not foresee any product availability constraints in Portugal because of the new regulations.
Projected Impact on MGO and Fuel Oil Demand
Last year, consultancy 2050 Marine Energy and global bunker supplier Minerva projected a 20-30% increase in global MGO demand as a result of the Mediterranean SECA.
At the IBIA Annual Convention in Athens 2024, 2050 Marine Energy owner Adrian Tolson estimated that the new ECA would increase global MGO demand by 20.2% while reducing global fuel oil bunker demand by 3.1%.
He also forecasted a major shift in Mediterranean bunker fuel demand between 2024 and 2026, with VLSFO's share falling from 55% to 21%, HSFO rising from 26% to 30%, ULSFO increasing from 1% to 9%, MGO climbing from 17% to 35%, and LNG and other fuels growing from 2% to 4%.
Similarly, at the Sibcon event in Singapore, Minerva CEO Tyler Baron told Ship & Bunker that the company expects a 30% increase in global MGO demand and a 5% drop in fuel oil consumption due to the regulation.
Unlike the introduction of the Northwest European 0.10% sulfur ECA in 2015, the Med SECA is not expected to drive significant ULSFO demand. ULSFO, a 0.10% sulfur fuel oil blend designed as a cheaper alternative to MGO for ECA compliance, is unlikely to see widespread uptake this time.
Ships with unpredictable schedules are unlikely to want to keep a fuel tank spare for ULSFO in the Mediterranean, Baron argued.
"So we think there'll be limited demand for ULSFO."
Most market sources also indicate that ULSFO is unlikely to be offered widely in the Mediterranean, with LSMGO expected to be the dominant ECA-compliant fuel for non-scrubber-fitted ships.
