At the company’s recent annual Bunker Oil and Energy seminar, participants discussed issues associated with the requirement to burn low sulphur fuels and the challenges shipowners face to comply with new regulations. From 2015, the allowable sulphur content of the fuel in emission control areas (ECA’s) will be reduced further from 1% to 0.1%.
The low sulphur grades will provide a challenge. DNV Petroleum Services’ Bjørn Odland highlighted how the refinery process to produce low sulphur fuel will result in a decrease in fuel quality. Unstable fuels, reduced ignition and combustion quality are some of the many side effects resulting from the new regulations. In addition to the poor quality, shipowners also run the risk of receiving non compliant fuel. Availability of compliant fuel worldwide could also be an issue, resulting in a more segregated freight market.
As Bunker broker and analyst for WPMF, Oivind Munthe-Kaas summarized, “Business as usual is not possible. Compliance with the low sulphur regulations will be costly for owners in the weaker markets as they will have to bear the cost themselves.”
Changes in fuel quality will mean a substantial increase in costs for shipowners trying to manage the potential consequences eg. lubrication concerns, or fuel compatibility issues when switching from one fuel grade to another.
Alternative fuels such as marine gas oil or liquid natural gas (LNG) are a possibility. However, costly conversions for older engines as well as storage of LNG onboard will provide a challenge. Another option will be to install scrubbers or other abatement technologies. “Whatever option is chosen, the result will be higher costs,” concludes Munthe-Kaas.
To view the presentations from the seminar, see under Related information.