Meech, Tolson to Collaborate on New Global Sulfur Regulations Impact Study

MECL and 20|20 Marine Energy will work together on a study of the impact of global sulfur regulations on shipping.

Marine Energy Consulting Ltd. (MECL) and 20|20 Marine Energy (20|20) Wednesday announced they will work together on a comprehensive evaluation of the impact of MARPOL Annex VI global sulfur regulations on the shipping industry, which mandate the use of bunkers with a sulphur content of less than 0.5 percent on a global basis.

As Ship & Bunker has previously reported, the International Maritime Organization (IMO) is set to decide next month on whether the 0.50 percent global sulfur cap for marine fuel comes into force from 2020 or 2025.

"The majority of people currently expect that the global sulfur cap will be implemented in 2020, which leaves just over three years to prepare in an increasingly complex market, fraught with questions and risk," said Adrian Tolson, Senior Partner at 20|20.

"This is coupled with a huge uncertainty in the shipping industry on how the regulation will impact supply, demand and availability, product compatibility and specifications, future pricing, global infrastructure, as well as the choice of compliance solutions available, and how they can be financed."

The consultancies say the study will include a detailed impact assessment of the regulations, and will provide insights into compliance solutions in order to assist those looking to make informed decisions in the development of strategies managing the transition and operations in the future regulatory context.

"Will there be enough distillates to meet demand? What will happen to residual fuel? How rapidly will the global LNG infrastructure be developed? How can scrubbers be financed? These are just a few of the questions that need to be answered," explained Robin Meech, Managing Director of MECL.

"This joint MECL - 20|20 study will bring all this information together to comprehensively address and provide insight and greater clarity for stakeholders in the marine fuel supply chain, which will be an essential input to better strategic decision-making."

The study is expected to be available in early 2017 as a multi-client report, with the option for a seminar to interpret the study's findings, tailored to each client's specific need.

The consultancies note that the study will be of value to all stakeholders in the marine fuel supply chain, including refiners, fuel suppliers, port authorities, operators, and ship owners.

In September, the International Bunker Industry Association (IBIA) 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."