Physical Suppliers Need to Step Up Now to Address Real Uncertainty Over 2020: Bomin

Thursday October 12, 2017

With the "IMO 2020" regulations set to come into force in just over two years, the time is now for physical suppliers to step up and start to address some real uncertainties for ship owners and operators over compliance with the new rules, Jan Christensen, Global Head of Bunker Operations, Bomin Group, has told Ship & Bunker.

"At a macro level, the reality is that distillates, and distillate-based products will be the most widely used solution. Physical suppliers therefore need to ensure that their global infrastructure and operations are calibrated to meet the demands of their customers. This includes reconfiguring tanks to hold clean products rather than fuel oil; ensuring that they have the right products and a presence in the right markets; and delivering the highest levels of service standards on a global basis," said Christensen.

"However at an individual level there is real uncertainty amongst ship owners and operators in deciding which compliance solution they should adopt. Suppliers that have the knowledge, detailed insight, and understanding of the bunkering market need to take a more consultative, and partnership-based role with the shipping community to help owners and operators develop a solution that is right for the specific demands of their fleets, on a vessel-by-vessel basis; one that drives operational efficiencies, is cost effective and ensures compliance.

"As we enter this new era for shipping, owners and operators really need our energy and knowhow to help them navigate this fundamental transition within the industry. Now is the time for physical suppliers to really step up to the mark."

The new regulations mean that from 2020 ships must burn a fuel with a maximum sulfur content of 0.50%, or use an equivalent method of compliance such as fitting a scrubber so they can continue to use otherwise noncompliant HFO.

And while scrubbers, or using distillates and other boutique blends, are expected to be the main methods of compliance come 2020, Bomin has been notably active in early exploration of some of the alternative options that are available to owners and operators.

This includes Liquefied Natural Gas (LNG), which is currently leading the pack in terms of alternative bunkers. Bomin was active in this area as early as 2014, although cooling interest amid falling global oil and bunker prices saw them exit the Bomin Linde LNG JV at the end of 2016.

Desulfurization technologies have also been touted as a possible solution that would allow the production of compliant HFO products. In 2017 Bomin signed an MoU with one such specialist in this area, Genoil Inc. (Genoil), for the development of IMO 2020 compliant low sulfur fuel products.

However, Christensen told Ship & Bunker that this MoU has now come to an end as, while a "number of potential synergies and benefits were recognised", it became clear that Bomin would not be able to agree on a way forward that would be acceptable to all stakeholders.

"We have been considering a number of technologies and innovations as compliance solutions," he said.

"We will continue to actively pursue investments that create value for our customers and partners, and will look at all options and opportunities that enable us to drive compliance and efficiencies within their businesses."