Industry divided on low sulphur fuel availability in 2020

Industry divided on low sulphur fuel availability in 2020

The shipping industry is undecided whether or not there will be enough low sulphur fuel available when new environmental regulations come into force in 2020.

MarPoll, this site’s quarterly survey, has seen more than 500 votes on nine topical questions with the poll set to close later today. As it stands 46% of Splash readers believe there will not be enough low sulphur fuel come January 1, 2020 when the new IMO regulations kick in, with a slim majority, 54%, believing there will be enough to go around.

The IMO stipulated two years ago that marine fuel will have a 0.50% sulphur cap come 2020, down from the current 3.5%. Bunker costs across the world could jump by 25%, or $24bn, when the new regulations come into force, according to a report from consultants Wood Mackenzie last month.

Despite ongoing concerns that refineries and bunker suppliers might not be in a position to supply the global merchant fleet with the fuel it needs in 19 months’ time the IMO has repeatedly made clear it will not row back on the sulphur cap regulation. IMO secretary-general Kitack Lim stressed in February this year, “There is no turning back.”

“Supply constraints will like start to effect the market as early as Q4 2019. Expect the price of MGO to double or triple in cost until the market can stabilise,” one Splash voter commented.

After a tough time in the press recently, manufacturers of scrubbers will be pleased to read the thoughts of another reader who commented: “As the price gap between the two main fuels will increase owners will have to turn to scrubbers for now. Simply the price for HFO will drop and the price for MGO increase so the payback time for scrubbers will reduce. But it will be first come, first served so a huge drive will increase the initial price for installation.”

Other questions in our topical survey look at the markets, which nationalities predict shipping cycles best, and the future skillsets of seafarers. To vote takes just two minutes and there is no registration. Results will be carried in the next issue of Maritime CEO magazine, due for distribution at Posidonia in Athens next month. To vote, click here.

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