• 2016 November 8 09:19

    IBIA says global sulphur cap could create bunker market ‘winners and losers’

    IBIA says global sulphur cap could create bunker market ‘winners and losers’.

    Even if, in theory, globally there is refining capacity to produce sufficient fuels to meet the 0.50% sulphur cap in 2020, if you take a more detailed look the picture is very different.

    In fact, several countries told the 70th session of the Marine Environment Protection Committee (MEPC 70) that they would not have sufficient refining capacity to offer compliant fuels to ships in 2020. Some of these countries are major bunker markets today, providing large quantities of residual fuel oil to ships calling at their ports, and some are also major providers of residual fuels to bunker markets in other countries.

    IBIA has also spoken to representatives for other countries and refineries who have said that, without a doubt, they will not be able to replace current supply volumes of high sulphur marine fuels with compliant fuels by 2020. Some will even struggle with 2025 due to dated refineries with limited scope for investments in upgrades.

    The reality, then, is that bunker markets in several ports and countries that currently provide significant bunkering volumes will not have similar volumes of compliant fuels available in 2020.

    If these ports and countries want to maintain current bunkering volumes, they would rely on imports. Some bunker markets, in particular the world’s major bunkering hubs, already rely on imports to meet bunker demand and perhaps for these the transition to a new low sulphur regime will be less painful. For those that have long relied solely on local refineries, it will be more challenging.

    One consequence pointed out by a member state during MEPC 70 is that there are regional imbalances in availability of compliant fuels. It is presumed that these imbalances will be addressed by transporting fuel cargoes around the globe, ironically causing greater demand for shipping and therefore increasing CO2 emissions and pushing up transport cost as a consequence.

    It has also been suggested that bunkering patterns may change as ships gravitate toward ports that can most readily provide compliant fuels.

    If this is the case, these regional imbalances in availability of compliant fuels could create bunker market “winners and losers”. The losers would be those countries, ports and companies that are unable to maintain supply of competitively priced compliant fuels, thereby losing sales volumes.

    The winners would be those countries, ports and companies that either have compliant fuel readily available from local sources, or that are able to adapt their cargo imports and infrastructure to maintain or even gain sales volumes.

    For those playing their cards right, the 0.50% marine fuel sulphur cap coming in 2020 could present great opportunities and give them a winning hand, especially if they are able to provide compliant fuels at competitive prices relative to other bunkering ports.

    There is, however, a joker or two in the pack.

    MARPOL Annex VI has a fuel oil non-availability clause, stating a ship “shall not be required to deviate from its intended voyage or to delay unduly the voyage” in order to obtain compliant fuels. This is a situation that may occur quite frequently in 2020 and possibly beyond.

    The question is whether ship operators are happy to use this clause and lift non-compliant fuels in ports with frequent shortages or even no availability of compliant fuels, or if they will do their utmost to take most of their bunkers in ports with reliable availability of compliant fuels. There’s also doubt as to whether all ships will comply at all times when operating on the high seas if there is no risk of getting caught or penalised.

    These jokers in the pack could impact the balance between bunker market winners and losers, at least in the short term.




2019 February 22

18:08 Pacific Fleet AS-34 underwater vehicle practises maneuvering in Kola Bay
17:50 Krasnoye Sormovo launches first ship in new RSD59 series of four ships ordered by STLC
17:35 CMA CGM announces FAK rates from Asia to the Middle East Gulf
17:05 Bilfinger expands in international maritime scrubber market
16:35 Aker Solutions to develop digital twin for Wintershall’s Nova field
16:12 Chiquita's new container ship pays its first visit to Kloosterboer in North Sea Port
15:31 DOF awarded contracts for three ROV Support Vessels in Brazil
15:12 Biggest wellboat in the world’s hull arrives at Havyard yard in Leirvik
14:55 Zaliv shipyard (Kerch) launched search-and-rescue ship of Project А163
14:12 Tideway completes installation of longest AC offshore wind export cable at Hornsea One in the UK
13:48 32 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 21-22
13:30 GTT creates a Digital Hub of Excellence in Singapore
13:04 The Spectrum of the Seas leaves the MEYER WERFT's dock
12:49 Sea Port of Saint-Petersburg upgrades its cane equipment
12:30 Port of Rotterdam bunker figures down to 9.5 million m3 in 2018
12:03 Algoma announces purchase of additional product tanker
11:30 Van Oord is one of the founding partners and main sponsor of PortXL
11:02 Fincantieri and Abu Dhabi Shipbuilding reach an agreement to cooperate in the UAE shipbuilding segment
10:30 Mitsubishi Shipbuilding holds christening ceremony for next-generation LNG carrier "MARVEL CRANE"
10:20 Port of Yeisk handled 159,000 tonnes of cargo year-to-date
10:00 CMA CGM implements Port Congestion Surcharge from Med and North Europe to Canada East Coast
09:58 The Netherlands ratifies ship recycling convention
09:35 Brent Crude futures price is down 0.24% to $66.91, Light Sweet Crude – down 0.16% to $56.87
09:17 Baltic Dry Index is up to 630 points

2019 February 21

18:33 AML’s MVP200 selected for new Swedish “RV Svea”
18:16 ​Shearwater GeoServices and TGS partner for major Brazil survey
18:03 NYK selected as a White 500 company for third consecutive year
17:55 Rosmorport to dredge 12.1 million cbm of material in 2019
17:34 Boskalis expands market position in marine survey through acquisition Horizon
17:29 GE to supply LM2500 gas turbine auxiliary equipment for Indian Navy’s P17A frigates
17:11 Hydrographic Company to get 15 new vessels by 2024
17:05 Rotterdam port innovation programme PortXL participants announced
17:03 H.H. Sheikh Theyab updated on ADNOC L&S strategy to become a global shipping champion
16:14 SCHOTTEL presents new shallow-water thruster SPJ 30 up to 150 kW
15:35 Forth Ports Group receives planning consent for new terminal at the Port of Tilbury
15:16 Algoma announces the Algoma Conveyor is headed for Canada
14:32 A.P. Moller - Maersk accelerates transformation and grows revenue in 2018
14:11 Teekay Tankers reports fourth quarter and annual 2018 results
13:46 Santos posts it 2018 net profit of $630 million
13:15 Gazprom Neft demonstrates solid growth across all key financial indicators in 2018
13:13 A.P. Moller - Maersk initiates demerger and separate listing of Maersk Drilling
12:49 ESPS Relampago’s crew carried out maritime training exercises with the Seychelles Coastguard
11:57 First meeting of Eastern Partnership LNG Network takes place in Warsaw
11:28 42 vessels escorted by icebreakers in eastern part of Gulf of Finland during 24 hours on February 20-21
11:03 The UK publishes draft UK MRV legislation following Brexit
10:39 Taganrog Sea Commercial Port spent USD 60,500 under its social programme in 2018
10:16 IMO treaties ratified by Guyana
09:54 Allocations of Taganrog Sea Commercial Port for its environmental programme in 2018 totaled USD 96,400
09:31 Brent Crude futures price is up 0.18% to $67.2, Light Sweet Crude – up 0.51% to $57.45
09:15 Baltic Dry Index is down to 622 points

2019 February 20

18:13 Klaipėdos nafta carried out the 10th operation of reloading LNG from a gas carrier to ground storage tanks
17:52 VNIIR-Progress St. Petersburg supplies electrical equipment for Atomflot icebreaker
17:28 Documents on concession model for Taman dry cargo area project to be submitted to RF Govt in March 2019
17:04 Cammell Laird stages ‘float-off’ for new £10m ferry for Red Funnel
16:46 VTMS, AIS and Pilotage Service on the Northern Sea Route to remain under Rosmorport’s control
16:25 NOVATEK eyes arranging LNG bunkering in Sabetta
16:04 Maersk enhances Asia-Europe network to further improve schedule reliability
15:43 Decision made on transfer of FSUE Hydrographic Company to Rosatom Corporation
15:21 Euronav sells LR1 Genmar Сompatriot
14:54 SIA Extron Baltic receives award for rapid growth in the Port of Riga