Oil Refineries Unprepared Provide Low-Sulphur Fuels by 2020

Recent study shows only 15% have strategy for incoming sulphur cap legislation

News ID: 75078

Date: 21 July 2017 - 14:40

According to MANA, ONLY 15% of the world’s fuel oil refineries have a strategy in place to meet the global 2020 0.5% sulphur cap, according to a recent survey of refineries by technology-focused consulting company KBC.

Part of this unpreparedness in providing low-sulphur bunker fuels may come from a lack of clarity from the shipowners’ side as to the extent of their need and subsequent demand for these fuels ahead of the cap.

“While the shipping industry expects the refiners to meet their supply requirements, the refining industry is still waiting to know to what extent the shipping industry will install emission scrubbers on board,” KBC chief economist Stephen George said.

The survey comes on the heels of an IMO decision to not even consider a potential transitional period for the implementation of the sulphur cap depending on availability of compatible fuel.

During the Marine Environment Protection Committee 71 in early July, the IMO environment pollution body that took the decision, proponents of a contingent transition period were vocal in their concerns that refineries around the globe will not be ready to service the demand for low-sulphur fuels by 2020 as well as the regional imbalances in fuel availability.

“This is a wake-up call. Failure of refiners to study, agree and implement a robust strategy will leave many of the ‘less complex’ refineries severely economically disadvantaged,” Mr George said.

At the same time, the introduction of the sulphur cap could lead refineries to adopt innovative technologies that would enable them to increase profit margins and prepare for future regulations on emissions restrictions, he added.

The IMO has its eyes set on introducing a greenhouse gas emissions reduction measure in 2023.