Expect Post 2020 Bunker Markets to be More Fragmented and Complex, Conference Hears

Friday December 2, 2016

Bunker markets are expected to become more fragmented and complex following the implementation of a 0.50 percent global sulfur cap on marine fuel in 2020, delegates at this week's S&P Global Platts Mediterranean Bunker Fuel Conference has heard.

The new rules will almost certainly mean a rise in costs, as owners and operators face a choice between investing in technology that will allow them to continue burning the same bunkers they buy today, or switching to one of the alternative, and inevitably more expensive, compliant fuels.

But there are also serious questions over whether there will be a sufficient supply of those compliant bunkers come 2020.

Cockett Marine Oil CEO Cem Saral was among those to comment that the new cap could well lead to supply chain disruption, and called IMO's decision to implement the cap in 2020 "the beginning of an unprecedented transformational stage."

Adding to the uncertainty is the fact that there is no clear plan on how the new rules will be enforced, so the industry expects that in addition to those who are unable to comply due to a lack of product, there will also be non-compliance by choice.

"Will we all be using the same 0.5% sulfur fuel? No, we won't," Marine and Energy Consulting Limited's Robin Meech told delegates Thursday.

"The shipping industry, if it doesn't have a policeman, will do whatever is cheapest."

As for the conference itself, EMEA Conference Producer Chris Willmets-Secker said it was "one of their most successful bunker events to date," with over 140 delegates gathering in Athens.

"We look forward to our European edition taking place in Rotterdam on the 17-18th May next year," he added.