IMO 2020: Refining Can't Produce Enough Fuel for 100% Compliance, Says EnSys

Ensys says refining can't meet the demand for IMO 2020. File Image / Pixabay

The refining industry will not be able to produce enough fuel for the Marine Shipping industry to achieve 100% compliance with the upcoming "IMO 2020" global 0.50% sulfur cap on marine fuel, Martin Tallett, president of EnSys Energy & Systems Inc., has warned.

In 2016, an International Maritime Organization (IMO) official study undertaken by CE Delft found no major barriers to producing enough compliant bunkers for the January 1, 2020 start date.

But Tallett's firm was behind an alternative study submitted to the IMO in 2016 by BIMCO and global oil and gas industry association IPIESA, in which it was warned refiners could have "extreme difficulty" in meeting demand for low sulfur fuels.

Today, Tallett says it is even less likely refiners will be able to meet demand.

"We don't believe the refining industry can produce all of the fuels that would be needed to achieve 100 percent compliance. It's going to be potentially rather chaotic and stressed," he told Bloomberg.

The main difference since 2016 is that the global demand level has gone up, he says, but the uptake of scrubbers that would allow vessels to continue to burn HSFO is also lacking.

By Tallett's numbers, the industry will need to replace about 4 million barrels per day (bpd) of HSFO with lower-sulfur equivalents. Refiners can meet about 3 million bpd of that, he estimates.

Tallett is also not alone in his view: "We still expect a shortage of low-sulfur bunker," Bloomberg quoted IEA's Kristine Petrosyan as saying.

For the record, CE Delft still believes that fundamentally, there should still not be a shortage of compliant fuel.