IMO2020: Exxon, BP See Future for Low Sulfur Residual Fuel

0.5% sulfur residual to become shipping's standard in longer term (file image/pixabay)

Two oil majors have edged closer to making 0.5% sulfur fuel oil the new standard for the bunker market.

Iain White, global marketing manager for Exxonmboil Marine Fuels, told a conference during International Petroleum Week (IPW) that blending would be on the increase in the new era of low sulfur bunker fuel.

"There is going to be a lot of blending in the market," White was quoted as saying by maritime news provider Lloyd's List.

"There is going to be residual fuel used in the marine market in some shape or form," he added.

At the same IPW event, Jason Breslaw, development lead on 0.5% marine fuel at BP, said new 0.5% sulfur fuel oil will be supplying over half the market in the longer term.

It is generally accepted that there will be plenty of high sulfur fuel oil available in the market come 2020. What is less clear is how that product will be used.

Some observers point to power plants taking up some of the slack while the bitumen market may benefit from lower pricing on its base product.

Emissions abatement technology, more commonly referred to as scrubbers, could allow for a decent sized chunk of the HSFO pool to be consumed by shipping. However, many ship owners and operators have yet to make up their minds on the technology.

Contributing to the debate, marine fuels consultant Robin Meech said that probably the best time for shipowners to install scrubber units onboard their vessels would be late next year. Meech argued that the price differential between HSFO and 2020-compliant fuel oil would be at its widest around the start of the 0.5% suflur cap implementation tapering off as the decade progresses.