Sulphur cap to spur innovative new bunker blends

New emissions regulations on the shipping industry are likely to prompt a series of new products, according to the International Bunker Industry Association (IBIA).

Both refiners and blenders, which purchase cargoes of various product streams, are expected to create 0.5pc sulphur content marine fuel products, to meet International Maritime Organisation (IMO) rules that come into force from 2020. Shipowners can meet these rules by using 0.5pc sulphur fuels or by installing abatement technology known as scrubbers.

There is unlikely to be enough capacity from 'traditional' distillates such as marine gasoil (MGO) to meet demand for low-sulphur fuels, meaning refiners will be encouraged to look at using a range of blends.

"We are likely to see innovation to replace traditional distillates with lower cost products," IBIA communications manager Unni Einemo said.

Some new blends will use vacuum gasoil (VGO), while others will use low-sulphur heavy fuel oil (HFO) in regions where this is available, such as South America, with low-sulphur blendstock added in.

Some refiners are looking at ways to create 0.5pc products from existing product streams, while others are examining ways to desulphurise HFO.

IBIA has said previously that the make-up of bunker fuels created to comply with the sulphur regulations is likely to vary according to supplier, and will depend on the type of crude used in each refinery and its configuration. Questions remain about the compatibility of different 0.5pc bunker fuels with each other, with concerns about operational issues if they are mixed in vessels' engines and fuel tanks.

"We have seen a dramatic forecast change for 2020 consumption; HSFO demand seems to be not as bad as it was previously expected, as scrubbers seem to gain field," a major refiner and bunker supplier told Argus. The supplier is in the early stage of developing 0.5pc sulphur blends, and these are not yet at a testing phase.

Most of the industry was in a "wait and see" position, the supplier said, because of uncertainty about demand for their new products.