IMO 2020: Supply Uncertainty Means MGO is Tramp Trader's Only Compliance Choice for Now

by Ship & Bunker News Team
Monday June 25, 2018

Tramp trader Ardmore Shipping says uncertainly over the availability of both HSFO bunkers and the new breed of 0.50% products expected to hit the market in time for 2020 means, at least for now, buying compliant distillate fuel is its only real choice for IMO 2020 compliance.

The company operates a fleet of modern products and chemical tankers.

"At this point I would probably say we'll have an initial MGO/MDO strategy until we understand things better," COO Mark Cameron told Platts.

"We're very interested in the 0.50% and we believe that will definitely be an option.

"What we're currently saying is that, because we're tramp-trading, we need to know the availability of the 0.50% on a worldwide basis."

The impact of supply uncertainty has been a common industry talking point ever since the new sulfur cap was announced, with IMO's official fuel availability study conducted by CE Delft arriving at a different conclusion to an alternative study conducted by EnSys Energy & Systems Inc. and submitted to the IMO by BIMCO and IPIESA.

Interest in scrubbers, that will let ships continue to burn otherwise non-compliant HSFO bunkers, has been gaining momentum in recent months. But those backing the technology tend to be players with a firm idea of where they will bunker, such as offering ferry, cruise, and liner services.

NSI's Paul Hardy and Olivier Jouny, Managing Director of Total Marine Fuels Global Solutions (TMFGS) are among those who have told Ship & Bunker that there will inevitably be a rationalization of the HSFO supply chain, with a recent Ship & Bunker highlighting that even the relative pricing of HSFO bunkers in 2020 is unclear.

Cameron has now added his voice to those concerned over the long term supply viability of HSFO.

Similarly, while there is a slowly emerging picture of where the 0.50% blends will be available, understanding important factors such as what the available quantities of such fuels will be, what their quality and composition profile will look like, and what the compatibility will be between such fuels - if any - will all take some time.

EnSys has even reiterated its concern over the availability of sufficient quantities of any kind of compliant bunker fuel.

The new global 0.50% sulfur cap on marine fuel comes into force from January 1, 2020.