The International Maritime Organization (IMO) global 0.5 percent sulfur cap is less than two years away from making the issues of fuels, compatibility and treatments something even the most obstinate observer will have to address. Add into this mix the MARPOL .1 percent limit, and the issue of regulation becomes a little more complicated for shipowners, bunker operators and the industry as a whole. But the real issue is the need to be working toward bunkering with compliant fuel well before the end of 2019. In fact, the process should begin and be realized before the middle of next year.
Under the global cap entering into effect on Jan. 1, 2020, ships will need to burn marine fuels with a sulfur content of no more than 0.5 percent — a considerable reduction from the current limit of 3.5 percent — with current Sulfur Emission Control Areas (SECAs) remaining at the 2015 standard of 0.1 percent. The issues will be complex, and shipowners and managers are faced with the choice of continuing to use high-sulfur fuel oil (HSFO) or switching to low-sulfur fuel or alternative fuel sources. To be compliant and still use high-sulfur fuel oil, a vessel must be fitted with an exhaust gas scrubber. At a cost between $4 million to $8 million, depending on whom you talk to, retrofitting a scrubber is an option only for a fraction of the global fleet and some newbuilds. Alternative fuels such as liquefied natural gas (LNG) still have quite a way to go before going mainstream. Most vessels will likely have to operate on 0.5 percent sulfur-compliant fuel oil.
There is a risk that refineries may not have the capacity to produce enough desulfurized fuel to cope with the anticipated demand from the maritime sector, some 320 million metric tons by 2020. Some analysts suggest that additional capacity of between 60 and 75 percent will be required, and new blending techniques also will come into play. In 2015, the introduction of the 0.1 percent sulfur cap under MARPOL resulted in a stir in the marine fuels world, and we can expect the same for the 2020 global cap. It is not unlikely that ships will take on different fuel types at different bunkers and this may well lead to issues, including fuel incompatibility. The extension of blending techniques and new refinery streams available to bunker blenders may well work both ways, i.e. increase the spectrum of ISO 8217-compliant fuels but also introduce new risk factors.
In 2017, the decision to include biodiesel in the revised ISO specification was aimed at increasing the supply of 0.1 percent sulfur fuels in ports where compliant fuels are not always available. But the provision of biodiesel now raises new challenges for shipowners. Industry experts have raised the prospect of a higher probability of bacterial contamination and growth in fuel tanks and fuel lines. In fact, recent studies have shown that 0.1 percent sulfur fuels will raise the issues of increased incompatibility, the presence of catalytic fines and additional sediments, a potential lack of fuel lubricity, wax crystal formation due to a higher pour point and cold filter plugging point (CFPP), and the inevitable specter of greater hazards during fuel changeover procedures.
There is currently a shortage of advanced cracking and desulfurization facilities around the world able to cope with the demand for compliant 0.5 percent sulfur fuel come 2020. The capex and lead times that refineries are confronted with only compound the issue. This squarely puts the focus, at least for the immediate future, on developing blending techniques to meet expected demand for low-sulfur fuel. In reality, this development of new blending techniques is likely to increase the spread of fuel parameters, which up until 2015 were dictated by the ISO 8217 standard.
To cope with demand, it is more than likely that refinery or external streams will be incorporated in the “traditional” atmospheric residuals to produce 0.5 percent sulfur marine fuels, which will include slurry oils, light cycle oils, low-sulfur visbreaking residues and vacuum gas oil, treated and sulfurized kerosene, cracker bottoms and Russian M100 fuel oil.
The new 2020 fuels will range from pure hybrid fuels to a number of different refinery streams mixed into a residual base. The real issue then will be how to ensure smooth operations using a variety of available fuels to meet the demand for compliant 0.5 percent sulfur fuels against a backdrop of potential fuel instability and sedimentation issues. The industry also needs a clear definition of an acceptable range in terms of density, viscosity and a reduced allowance for cat fines below 40 parts per million. The process of coming to terms with the demands of the cap with regard to compliance and financial cost will take time that is running out.
Olivier d’Olne is global technical director at Aderco Marine, a fuel treatment company that originated by supplying the Canadian icebreaker fleet in the early 1980s.
