TECHNICAL • PROPULSION
IMO’s 0.5% global sulphur limit kicks in from 2020, but can the industry be ready in time?
Meeting the future fuels challenge
The IMO’s decision to introduce the planned 0.5% limit for the sulphur level in marine fuels in 2020 rather than the planned later
date of 2025 has far-reaching consequences for the shipping industry, as Bill Thomson reports.
The date is now well under three years away. Three years is a short time in shipping. It’s about the average time it takes to design and build a new ship. So if a vessel is ordered now, the designers, builders and owners need to be confident that it will comply with the regulations in force when it is delivered.
There are several technical routes available to ensure that the sulphur regulations will be met. The problem is, though, which route to take? The oil suppliers have three years to ensure the availability of low sulphur fuels. Up to now residual fuel oils have been allowed to contain up to 3.5% sulphur. Lowering the maximum to 0.5% in one step is a big drop.
US container ship Isla Bella is the first large boxship to use LNG as principal fuel source, emitting negligible sulphur and particulates
Residual fuels, as the name implies, are basically fuels made up of the residue from refineries – i.e. the left- overs after other petroleum products have been extracted at the refinery. The refining process does not normally extract sulphur; there is little use for it, and the amount in the crude depends on where in the world it originates.
Some residuals contain under 0.5% of sulphur without further refining, but these are in the minority. Most will require further processing which means more refinery capacity will be required, and, inevitably, the cost of 0.5% sulphur fuel will rise.
Whether or not the oil suppliers will be able to meet the demand for low sulphur fuel oil is another moot point. Before the IMO’s Marine
Environment Protection Committee (MEPC) met in October 2016 to decide on the date of introduction of the sulphur cap, IMO commissioned a study from Dutch research organisation CE Delft. This looked at three points. First, the likely demand for 0.5% fuel based on forecast growth in sea transport, expected fleet renewal, and the take-up of alternatives such as exhaust gas cleaning and use of gaseous
fuels. Second, global fuel production updated to 2020 taking into account new and expanded refineries and closure of older plant. Thirdly, the study attempted to predict how refineries would produce sufficient low-sulphur marine fuels as well as meet the demand for refined products from other market sectors.
Based on the above points, the CE Delft study concluded that the 2020 date would be feasible, at least from a supply point of view.
However, several bodies had tendered for the IMO study, and one of the unsuccessful applicants, a research group led by consultants Ensys and Navigistics, then received funding from shipping association BIMCO and several oil industry groups to carry out an alternative study.
According to BIMCO, this new study showed up several flaws in the IMO- commissioned research, which had, said BIMCO, failed to address fuel oil quality. The Ensys study suggested that a significant amount of the new low sulphur fuel could be unsafe to store and use onboard ships. Neither had IMO fully established
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Seatrade Maritime Review • Quarterly Issue 2 • June 2017 79
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